You might think I sound presumptuous when I say that a new era in retirement planning has begun.
But I plan to prove it to you.
An innovative difference
A new retirement planning method, available here, demonstrates that by properly allocating the smartest sources of income, you can create more income, with less market risk — for the rest of your life. And you can do most of the research without an advisor.
Retirees and people planning for retirement can follow any number of paths. Most consider – or have been offered – only a fraction of them. Online tools, investment advisors and financial planners supply limited options.
Why? The biggest problem is that most retirement advice is geared toward asset allocation. Most tools can handle only a few strategies based on the allocation of assets, thus ignoring major categories of financial vehicles and leaving retirees with market risks. Advisors often guide customers to products that they are already selling. And many are not educated on all the ways retirees can create income security.
When you instead build your retirement on a foundation of income allocation, a new world opens up.
Sources of income create income security
For most Boomers, the greatest fear in retirement is running out of money. Income Allocation logically focuses on allocations of income among dividends, interest, annuity payments and withdrawals (early in retirement) and between Rollover IRA and taxable accounts (for tax efficiency). The result is lifetime income, and more of it, and actually more liquidity. In the long run, you will also increase the financial legacy you can leave as well.
Three simple charts explain Income Allocation
Go2Income’s Income Allocation tool enables the individual investor/retiree to understand and create a customized income allocation plan in three simple charts. (And makes available specially trained Go2Specialists to review the plan designed from the tool.)
Chart 1 demonstrates the income boost you receive when using income allocation (IA) versus asset allocation (AA). Even with identical assumptions, the advantages to income allocation are significant. In this example, for a female aged 65 with a total of $2 million in savings (half of which is in a rollover IRA account), the income advantage is $17,000 in the first year and a whopping $1.7 million through age 95.
Chart 2 shows how Income Allocation reduces risk as a retiree ages. When you first retire, it makes sense to have market investments as part of your account. As you age and move into the second stage of retirement, you likely don’t want your income to depend on the market. In this same example, 61% of the income in the first year is safe and is not subject to market risk; through age 95, 76% of the income is safe.
Chart 3 illustrates the sources of income and demonstrates the importance of annuity payments in combination with dividends and interest earned from savings, and declining use of withdrawals. It also shows that annuity payments are secure and continue no matter how long you live. In this example, while less than 35% is allocated to income annuities, almost 50% of the income through age 95 is from annuity payments.
The right combination of DIY and specialists
Too many people feel they can’t make their own decisions about retirement. That’s partly because they don’t have all the information they need. It’s also because they haven’t educated themselves.
Now, instead of relying exclusively on your financial advisor to direct your retirement plans, our new tool enables you to adjust inputs and decide how to create a retirement income plan. It gives you solid information – and a range of potential solutions — that you can bring to your advisor for discussion.
Golden Retirement has specialists who can talk to you about the results you get from our tool, but they aren’t the only advisors you should consider. I urge you to examine all your options. Try out other tools and compare the results. Talk to a number of advisors before you choose one to guide you.
Try the Income Allocation tool for free
This Income Allocation tool is an important advance in retirement planning. I want it to help everyone have a chance to create a more secure retirement. Simply go to go2income.com/incomeallocation to explore your retirement income options today.