Today’s Prep:
Income planning is an essential part of retirement planning. Learn to examine your income needs in retirement, and join us for a conversation on diversification.
Equipping Points:
00:52 – How Much Income Can Mary Live On?
- Mary has about a million dollars. She wants to know how much she’ll be able to live on each year. Unfortunately, this is a tricky question to answer without knowing how long Mary is going to live. Of Course, there are other ways of going about this predicament.
1:33 – Explaining The Four Percent Rule.
- Years ago, there was this rule of thumb called the “Four Percent Rule.” It basically stated you could withdraw four percent of your assets each year from your retirement accounts and live off of that income. Of course, the idea was as long as you didn’t exceed four percent, you’d never run out of money. While it’s a fine rule of thumb, it hasn’t really kept up with our modern economic environment.
3:15 – Determine How Much You Need To Spend.
- Rather than focusing on how much you CAN spend in retirement, focus on what you NEED. After all, your needs will change throughout retirement. At first, you’ll be more active, and perhaps you’ll do some traveling. As time goes on, perhaps you’ll need more money for doctors visits. Once you know what you’ll need, you can begin the income planning process.
5:00 – Considering Diversification.
- You might think you need multiple IRAs to be diversified. However, it really just depends on what’s inside your IRA. If you’re properly diversified within that IRA, it might not be necessary for you to open a second one. Furthermore, you can have multiple IRAs, but if they’re all invested in the same things, you’re probably not diversified.
Today’s Takeaway:
“Income planning is key to helping you accomplish your goals in retirement. Determine how much income you’ll need, and work with your advisor to help you build an income plan to meet your needs. – Retirement Ready“
Subscribe To The Podcast:
Apple Podcasts - Google Podcasts - Spotify - Stitcher - iHeartRadio - TuneIn
Check out some other recent episodes
Mailbag: Should I Fire My Broker?
Navigating life’s financial crossroads can be tricky, especially when it involves your financial future. In this episode of Retirement Ready, Eric addresses these complex issues head-on. How do you best evaluate your broker and your investment performance against the S&P 500? Eric says a lot of that comes down to setting expectations and understanding the risks. Then, Holly wants to know what to consider before making a midlife career change.
Read More
Putting It Off
We are all guilty of procrastinating from time to time. Financially speaking, though, this can get you into a lot of trouble. Let’s talk about the areas where it might feel better to kick the can down the road.
Read More
Common Scams to Avoid
Americans over 60 have lost more than $3.1 billion in various forms of fraud and scams in the last 12 months! Today we talk through some of the common scams people unfortunately fall for and how you can stay vigilant against it.
Read More
Financial Strategies: Agree or Disagree?
There are a number of financial ideas that people have differing opinions on. Eric shares today which of these he agrees with or disagrees and why.
Read More
Divorce Mistakes
Unfortunately, divorce happens. When it does, no one wants to make costly financial mistakes amidst an already stressful time. Today, we talk about the mistakes that can happen and how to avoid them when it comes to dividing up your assets with a spouse.
Read More
Villains of the Financial World
Just like some of these cinematic villains, some of these financial elements may have a bit of nuance and history that can make it hard to label them all good or all bad.
Read More
Uses for Life Insurance
When you’re younger, life insurance is often thought of as an income replacement as needed. But as you get older and into retirement, you might find other uses for life insurance. When thinking ahead for your estate and how it passes to beneficiaries, life insurance can prove to be a useful tool. Currently, the proceeds from life insurance are tax-free. How does that change how you include it in your financial plan? Eric outlines some of the options and benefits life insurance can provide.
Read More
Understanding Financial Risk
What kind of risks do you take in your financial life? As you get less comfortable with things like climbing up ladders and riding on skateboards, you might also become less financially risky. When you enter retirement, how you view your money in the market changes significantly from your working years. It’s important to look at your portfolio to ensure your investments match your risk tolerance.
Read More
Mailbag: What Financial Advice Should I Share with My Grandchild?
Why is retirement planning different than the “good old days” that our parents and grandparents experienced? Things like pensions, Social Security, and even RMD age have changed. Is your financial plan set up accordingly or is it in need of some changes to match?
Read More
The Good Old Days
Why is retirement planning different than the “good old days” that our parents and grandparents experienced? Things like pensions, Social Security, and even RMD age have changed. Is your financial plan set up accordingly or is it in need of some changes to match?
Read More