Today’s Prep:
On this podcast, we love a good analogy. Join us as we discover what we can learn from retirement by observing a water wheel.
(Click the featured times below to jump forward in the episode)
Equipping Points:
1:10 – What Is A Water Wheel?
- A water wheel is a machine used for grinding grain. Water is diverted toward the wheel, and as the water turns the wheel’s paddles, the wheel manually powers the gristmill or sawmill. See the example of George Washington’s gristmill below.
1:48 – How Is Retirement Like A Water Wheel?
- A water wheel requires a consistent stream of water to turn and power the mill. Similarly, you need a consistent stream of income to power your retirement. If your proverbial stream starts flowing, your retirement could be in trouble. As you’re preparing for retirement, you need to develop a predictable income plan.
4:06 – What Income Streams Are Powering Your Water Wheel?
- We take your pension, Social Security, qualified retirement accounts, and brokerage accounts all into account as we calculate the level of income you’ll be able to receive in retirement.
6:04 – What Could Stem Your Flow Of Income In Retirement?
- Market withdrawals, healthcare costs, and rising rates of inflation could all reduce your income in retirement. Your plan needs to prepare you, so that even if there’s a drop in the market, your income will continue to consistently flow into your retirement.
9:53 – Diversify Your Income Streams.
- If all of your income is coming from one place, you could be in trouble should your stream run dry. You need to develop multiple streams of income, and that’s where annuities come into play. Annuities essentially agree to either protect your principal or give you an income. They can be a useful tool for generating income in retirement. Remember, there’s no bad tool when it comes to your retirement. You simply have to determine what tools you’ll need to put your plan together and accomplish your goals.
Today’s Takeaway:
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