One of the most important things any retiree can do is establish a retirement income generation plan. At D Bryant Retirement Strategies, we’ve found most retirees are missing an income development plan; they instead rely on a “pile of dollars” that they are supposed to make last the rest of their lives. That causes uncertainty and stress and can keep you from enjoying retirement.
We want to help you approach income planning by first identifying what your income needs and desires are in retirement. After that, we subtract your known incomes and find out what the deficit is, if any.
Our goal is to eliminate any red numbers we see during our retirement X-ray. The easiest way to do that is by approaching your retirement strategies in phases, where known accounts are used to generate concrete incomes at specific times.
We believe you should exit work knowing exactly what your desired income is, where that income will come from, and how many income streams you will be counting on. We’ll also give you insight into market conditions and how to adjust for inflation.
Social Security rules have changed dramatically over the past decade. Some of the strategies available in the past don’t exist anymore. Nonetheless, Social Security planning is an important component of your retirement, and planning involves not only anticipated longevity – the health of the Social Security Administration system itself – but also existing IRAs, which you can use to supplement your income so you can allow your Social Security to grow to its maximum at age 70.
It’s important to allow Social Security to grow as much as it can because Social Security is not taxed as heavily as ordinary income or IRA distributions. By strategizing, D Bryant Retirement Strategies can help plan whether or not it’s advisable for you to draw from IRAs so you can allow Social Security to grow for as long as possible.
If you’re one of the few who still enjoy a pension, planning for it in your retirement income plan is extremely important. Fifteen percent of the population has a pension, but most of that group is made up of baby boomers, who are from an era when pensions existed.
When you’re settling your pension, options may include a lump sum, a single lifetime income, or joint survivor income. That last option means the retiree takes a reduced amount in order to provide some portion to the surviving spouse in the event of his or her death.
Single lifetime income or joint survivor income may seem advisable, but a lump sum option may allow the dollars you’ve accumulated over a lifetime of work to remain in the estate for non-spousal beneficiaries on the passing of both spouses. Therefore, careful examination of pension settlement provisions is an important part of how we serve our clients at D Bryant Retirement Strategies.
The most important part of managing money isn’t making money – it’s avoiding loss. Protection is important at any age, but particularly for those nearing retirement or already there.
Remember the losses incurred back in recessionary periods like 2000-2003 and 2007-2009? At D Bryant Retirement Strategies, we often see retirement investment strategies designed in a way that exposes the near-retiree or post-retiree to a huge amount of risk, especially if a recession should happen again. What’s worse – many of these retirees have asked their previous advisors for moderate, non-aggressive, or safer portfolios.
We advise using a retirement model, such as Wharton’s School of Finance model, which strongly encourages balancing your retirement savings – which represents your entire life’s work – between items that offer some upside potential with full liquidity. By balancing risk with other items that provide some measure of safety, you can help ensure your retirement savings have added protection while still having potential for growth.
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