When To Retire, A Logical Approach Show 53

A logical way to determine if we can afford to retire, or if now is the right time, is to figure what your expenses are per month.

Conventional wisdom is you want to be able to replace 70% to 80% of your current income in retirement or as close to 70% as possible. 

So, how do we go about projecting how much income we can draw from our savings? With stock market investments, we can look at reports that indicate what has happened in the past.

However, what the future holds may not be similar to what has happened in the past. We’ve never had $28 trillion in national debt or so many unfunded obligations as a country. We also have a budget that hasn’t been balanced in twenty years. Using past performance of the stock market to indicate what we can expect to earn in the future may be problematic.

Remember, when we are working, we are in an income and accumulation phase. What this means is that we are planning to be invested for a long period and can wait for our money to come back from stock market corrections.

When we are getting ready to retire, or we are retired, we are in an income and distribution phase. The goal becomes figuring out how I can take consistent income off my accounts and make it last for as long as possible an ideally for the rest of my life?

For our stock market positions I believe it’s essential to have active management. How we do this is we have strategic partners actively managing portfolios with varying objectives. For many retirees the goal is to lessen the impact of major market gyrations. We look to match our portfolio managers up based on your goals and objectives.

It’s not a secret in our business that we use annuities as the bond alternative when we construct financial plans. By and large, bonds aren’t effective in today’s interest climate at providing fixed income. The correct annuity can provide bond like returns and have guaranteed principal protection. What that means is that the annuities we use are safer than bonds.

When you are able to use an annuity to provide for basic lifestyle expenses and know that that block money is insured against market losses, you are able to use the equity portion of your portfolio to grow your money. Thereby, allowing yourself a greater opportunity to keep up with our rising inflation environment. 

We’re not a fit for everyone, but we care about protection from both the sun and loss of principle. For many people we’ve been able to be the logical voice in their retirement planning decision. When you’re ready to learn more about how we may able to help you call our office at 864.641.7955. 

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