The typical retirement plan devised by a financial advisor will call for you to manage your investments in stocks, bonds and cash so that they last through your projected life span.
I agree that you need to create a plan to manage your investment assets, but I also remind people entering the retirement zone to consider their other assets and resources: Your house, income annuities – and your ability to continue to work.
Maintaining your financial independence throughout your life is dependent on the plans you make to create retirement income.
When you are working, you have to decide how much to put aside for your retirement savings account. You have to plan for your kids’ education, your plans for owning or renting your primary residence, and to take care of your insurance needs, plus a whole lot of other decisions.
Continuing the theme of Financial Literacy Month, I will define terms that will help you create a plan for retirement income, particularly as it relates to taxes and risk management.
The key to a successful retirement income plan is to increase your spendable income (money after taxes paid). So you might want to know a lot more about taxes.
You also want to make it dependable income (money you can count on). You want your income to be predictable and stable, like Social Security or a company pension. It all means that you are going to want to understand risk management. More
Like most Boomers who are either already retired or planning for the day your paycheck stops, you have probably saved some amount of money to be available for the years you are not earning a salary. And you may be quite knowledgeable about retirement savings accounts like the 401(k) or IRA, or investment products like mutual funds, stocks and bonds.
The next stage of your financial life – converting your savings into the maximum amount of dependable, spendable income – is often more complex and confusing. It also comes with a whole new set of terms.
This is the first of a series of retirement planning articles based on the concept of Planning with Certainty. Two of the more troubling issues for individuals, whether related to retirement or not, are lack of control, and uncertainty as to the future. Too much planning today accepts that as normal, and asks those near retirement, and current retirees, to just “live with it.”
When you plan with certainty, it doesn’t have to be that way. More
