Jerry Golden on Retirement

The biggest risk in retirement planning is not what you think

July 10, 2018 By Jerry Golden in Income Allocation

People planning to retire often tell me their greatest fear is running out of money after they stop working. They have a valid concern, but the risk is not really about living too long. Instead, the issue that could bring calamity is the risk of failing to consistently follow a reasonable retirement plan.

Retirement planning must consider a couple of main points: You might live a long and healthy life, in which case you need money to continue so you can pay your normal bills. That’s called “longevity risk.” Or you might incur large and perhaps unreimbursed medical and caregiver expenses.

Keep on track

You can prepare for both, but once you create your plan, the tough part for many is to stay the course. That’s true particularly when investment returns are volatile and negative. Studies show that investors lose 1% or more on their returns when they are not in the market. This could mean five or more years in lost income.

However, unlike the risk of market returns, which no amount of diversification can fully allay, you can control the “stay the course” risk. All it takes is a little adjustment in your retirement planning, based on a simple premise: Reduce the amount of your income that is subject to the market – or what we call “income volatility.”

With preparation, you can reduce your income volatility during retirement by 50% or more. And, with the proper investment, you can get a 20% increase in income that lasts a lifetime.

You can achieve these results with an Income Allocation plan.

How immigration policy is intertwined with Social Security

June 27, 2018 By Jerry Golden in Social Security Tags: immigration, Social Security

As usual, the country is dealing with many controversies, most of which tend to be debated as standalone issues. The fact is, they are often intertwined with one another.

Take the case of immigration and Social Security. No matter what opinion you hold about immigration, many political liberals and conservatives agree that the future of Social Security will be much worse without an inflow of immigrant workers.

A Bipartisan Policy Center white paper states that immigrants “can help boost economic growth and mitigate some of the demographic challenges created by an aging population and declining domestic birth rates.”

And N.Y. Post columnist John Crudele agreed earlier this year, writing that “the only answer to keep the Social Security pyramid functioning is to allow people from other countries to come here to work, pay taxes and contribute to Social Security.”

I have written about potential solutions in the design and financing of Social Security here, here and here. The longer we wait to address the issues, the more difficult it will be to solve them.

Share your thoughts about Social Security. Write to me at Ask Jerry.

Earn up to 20% more in retirement with income allocation

June 19, 2018 By Jerry Golden in Annuity Tags: Annuities, Dependable spendable income, Guaranteed Income, Income allocation, retirement income

Income will determine whether your retirement is financially successful.

When you have enough income, you feel more secure. You worry less. You can spend more time doing what you want with people whose company you enjoy.

And from an investment perspective, you’re more likely to “stay the course” and not jump out of the market.

A new study shows how an income allocation strategy beats the traditional strategy of asset allocation, and delivers that additional income with less risk. Here’s a good description of the income allocation strategy.

The study examines different risk profiles for a 70-year-old male or female who, over the rest of their lives, will generate more income, lower volatility and a higher economic return when an income allocation strategy is implemented. Implementation for your age and risk profile will need to be customized, of course, to your personal circumstances.

For a free, no-obligation copy of my income allocation study, send a request to Ask Jerry.

Increase Retirement Income by 3% or more by Managing Your Risks

June 6, 2018 By Jerry Golden in Annuity

The financial press regularly reports that investors can increase income by investing in longer-term securities or by taking on more risk.

This advice usually appeals to retirees who, particularly in this low-income environment, are always looking for ways to generate more cash.

Markets are generally efficient and there are few, if any, ways to get that income without taking more risk. To quote a familiar trope, there is no free lunch. But such articles do help consumers if they are prompted to understand the nature of risks.

A risk primer

Here are the ways I think about risk when it comes to generating income.

Duration risk More

Choose the right advisor for the center of your retirement plan

May 9, 2018 By Jerry Golden in Two-stage retirement Tags: Annuities, Estate planning, Guaranteed Income, retirement advisors, Social Security

Who is at the center of your retirement income plan? Do you decide randomly how to build your retirement, or do you choose the best options after careful thought and research?

Most people would say they are thoughtful and decisive, but the facts often prove otherwise.

In reality, among the several advisors we need — for money management, tax, insurance, real estate and more — the one we are most friendly with rightly or wrongly influences our decision-making.

There are plenty of reasons to choose one advisor over the others. One may simply strike you as more experienced. Or perhaps your kids attend the same school. Maybe you just click better with them.

It’s good to have friends, but that’s not the best way to plan for the rest of your life.