Million Dollar Question
Million Dollar Question
Enjoying a spectacular retirement is not about how much money you have but about how much income you have to spend. Being able to enjoy all the things you find necessary, important and enjoyable can only be accomplished by having enough dependable repeating income.
Making your retirement a financial dream come true depends on one thing and one thing only - dependable, guaranteed, repeatable increasing income that lasts for as long as you live. And make no mistake, the most serious risk facing retirees and future retirees today is the 'for as long as you live' part. Longevity is the number one risk to a happy full retirement. If you live long enough, trying to live entirely off of assets that go up and down in the market will eventually result in failure. A plan that includes assets that guarantee income, guarantee inflation protection and provide for health issues in addition to assets such as stocks, bonds and mutual funds is a plan that will leave you comfortable forever.
Don't be fooled by firms and advisors who believe they can provide you with a successful retirement by safely investing your life savings in the market (stocks, bonds, mutual funds) and then have you live off of a withdrawal of 4% of your nest egg a year. While this type of plan has been trotted out over and over again for 20+ years, significant academic research proves clearly that this is most likely a recipe for disaster.
A successful retirement income plan includes first an in depth look at when and more importantly how you choose to take your Social Security as well as any pensions to which you may be entitled. There are literally over 50 different strategies on how to take your Social Security payments. Did you know you that there are two different ways you can receive Social Security benefits at age 66 (full retirement age) and then switch to the your maximum possible benefit when you reach age 70.
Stay away from any so called retirement advisor who wants to talk about investing your money before discussing your Social Security and pension options because they are linked in a way that can never be separated.
Retirement planning isn't just about investing. It's about what your life is going to be like for the next 25, 30 even 40 years. It's about co-ordinating all possible assets, payments and pensions into a never ending stream of increasing income that can provide you with the life you imagined.
In the end, your retirement plan should be all about you.