Retirement Strategies


News flash – when you retire you are going to need cash. And lots of it. Every week, every month, every year you are going to need cash to pay bills

You have probably spent the last few decades building your net worth with investments in property, financial and other assets like artwork or collectables (maybe a vintage car or two?). But here is the thing with assets – you can’t use them to pay bills unless you sell them. And selling them can take time, and incur taxes, and be a stressful process. Especially if the bills are piling up while your bank balance is going down

Funding your retirement can feel overwhelming and confusing. Pension plans, social security, dividends, 401 ks, annuities, IRAs, bonds … these are just a few of the more common income streams.

So what are some retirement strategies?

The honest answer is that it all depends on your unique circumstances. Not just your potential retirement income and investment portfolio. Not just the assets you could potentially liquidate. You also need to consider your personal circumstances and your tolerance for risk.

Here are the two key considerations I always work through with my clients when we start looking at the best income stream mix for them.

Will your pension and social security cover your expenses?

If you have already worked through your expected retirement expenses, the next thing you should do is figure out whether you can cover them with just your pension payments and social security benefits

If you haven’t already figured out what expenses you will need to cover in your retirement, do that first!

Just make sure you keep an eye on those expenses and adjust as needed. You can look at additional income sources as extra cream on top and that signed Peter Max print can stay on the wall for a little longer.

If your pension and social security will not cover your expenses (or you don’t have a pension plan) then you have some choices to make. First, you should revisit your retirement expenses to see if there are changes you can make to reduce them. Then you should think about your tolerance/preference for risk vs safety.

How comfortable are you with risk?

When it comes to finance, most of us understand that higher risk can potentially deliver greater rewards. Not all consumers may think the “safe bet” is less rewarding. Have you ever really considered how comfortable you are with these options?

When you are looking to create additional income streams for retirement outside your pension and social security, there are a wide range of options. And they all carry different levels of risk. In your 20s, 30s and 40s you could afford to take more risks with your investments and potentially benefit Because you had time to absorb a few plays which didn’t pay off. But as you get into your 50s and 60s, a few poor performers in your portfolio is a much bigger deal. So, you may consider finding options that are of less risk

Having said that, if you look at all the retired people in the US there is still a wide range of risk profiles. And your risk profile is going to come back to your level of comfort with risk and the size of the gap between your retirement expenses and your income. Would you be able to manage a fluctuating income that changes month to month? Or do you need a guaranteed amount each month to feel confident?

An experienced financial professional can help you understand your own risk profile, and match that to income streams that are best suited to your retirement needs

You have developed a substantial set of skills and experience throughout your career. And that has helped you create wealth. But as you look towards retirement you need to shift from wealth creation to wealth preservation. Shift from building net wealth to managing cashflow. And that requires a new set of skills and expertise.

For over thirty years, l have been guiding couples and families into retirement. I ask questions to help them understand what they really want from retirement, and then help implement the right strategies and tools to get them there

My passion is helping you turn your retirement ambitions into reality. If you would like to discuss how you can get on the right track with your retirement goals and plans, book in for a Complimentary Retirement Planning Session.

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The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice to meet the particular needs of an individual’s situation. Investing involves risk, including the potential loss of principal. Our firm is not affiliated with or endorsed by the U.S. Government or any government agency.

Investment advisory services offered only by duly registered individuals through AE Wealth Management LLC (AEWM). AEWM and Life Design Financial are not affiliated companies. CA Insurance License #0B075169. 1217977-02/22

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