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.
(Click the featured times below to jump forward in the episode)
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.
Check out some other recent episodes
When you work with a financial advisor, you aren’t just talking about money. Saving for your retirement also includes thinking about what kind of retirement lifestyle you want to have and what you need to keep in mind for the long-run. Do you want to work, by choice? What kinds of expenses will you have and how are they different in retirement? Is your money going to last for 30 years of retirement? Eric has seen his clients through all of these decisions and shares what to keep in mind about retirement.Read More
What kind of personality do you have when it comes to money? Before you put together a financial plan, it’s important to understand the way you think and approach money. We talk through a few different personalities Eric commonly sees and how he advises them. Whether you are spending whenever you get a good excuse to or more of an intentional spender, it’s good to be cognizant of how you handle it and what possible downfalls you may face.Read More
From teachers to engineers, there are a variety of people who work with Eric and his team to build a solid financial plan. Those in similar professions tend to have similar mindsets when it comes to finances. We discuss what similarities Eric sees across different industries and how he approaches each of them. Do any of these relate to you and your financial mindset? Find out what strategies a financial advisor might suggest pursuing.Read More
While no one really likes to talk about it, life insurance can be an important part of your financial plan. We talk about why people cringe when they hear the term, who most needs it, and why you might want to reconsider your preconceived notions about it. Life insurance sometimes gets a bad rap, but it can be a powerful tool. If you care for someone else and you hate taxes, look at life insurance.Read More