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Turning Assets Into Retirement Income
The transition into retirement requires a major change in the way people think about and manage their money.
Today´s retirees are less likely to collect a pension, and who knows what will happen with Social Security? Along with longer life expectancies and inflation, there is much to consider when planning for your future.
Planning Starts With Some Important Questions
- How many years might you spend in retirement?
- What´s the right amount of income to withdraw from your portfolio each year?
- How is your money currently invested?
- Is your plan too aggressive or too conservative?
- Does your investment mix suit your risk tolerance?
- Have you thoroughly explored your future income needs?
- How much of your retirement income are you willing to leave unprotected in exchange for potentially higher returns?
- How much of your retirement income do you want to come from guaranteed* sources?
Once you´ve answered these questions, you and your representative can put together a plan to help ensure your retirement income will last as long as you do.
The Three Fundamentals of Retirement Planning
1. Timing Your Retirement
The single most important retirement planning decision you will make is determining when to stop working.
For the vast majority of Americans, a strictly financial evaluation of their retirement readiness will reveal the overwhelming advantages of remaining in the workforce for a few more years.
2. Understanding Withdrawal Rates
Retirees must also determine how much money to take from their investment portfolios as periodic retirement income.
If you plan on withdrawing from your retirement savings for a long period of time, it is important to examine the effects that various withdrawal rates may have on a portfolio.
3. Creating a Portfolio With Guarantees
Most retirees will most likely receive several sources of guaranteed income, such as Social Security benefits, pensions, and IRAs.
However, in order to keep pace with inflation and rising health care costs, you'll probably have to rely on additional supplemental guaranteed retirement income to help plan ahead.
Talk To Your Representative
Take advantage of the expertise of a knowledgeable representative who can show you how to invest your money in products with options that guarantee a steady stream of retirement income over a period of years—and even for life!