What with the relaunch of our Go2Income platform, I haven’t had as much time for reading the past couple of weeks, but here are a few articles that caught my eye. By the way, our QLAC Toolkit on the site was singled out in Kiplinger’s Personal Finance magazine for its features.
4% Rule No More! How to Draw Down Your Savings
I agree with a lot of the sentiments expressed in the article, but not the proposition in the headline about “drawing down your savings.” It’s the wrong mindset to start the retirement income planning and execution process with.
Remember that income is defined as amounts received without any other financial effect. For the high net worth individual, that might be dividends on a stock or interest on a bond. For everyone else, it’s Social Security, any pension and annuity income. Withdrawing from savings today impacts your future withdrawals.
Leisure Inequality: What the Rich-Poor Longevity Gap Will Do to Retirement
This article points out a real issue about “income inequality” continuing into retirement.
While the politicians can deal with the economy or tax code to narrow the pre-retirement gap, there is something else that can help in retirement.
If we use the agreed-upon difference in longevity to price income annuities, then according to our studies there is a huge increase in income for the “poor.” If the annuity industry can’t provide for regulatory reasons, let the shorter expectancy folks buy into Social Security.
Income Growth and Lifestyle Creep
This post points out a phenomenon that we’ve observed at Golden Retirement – Baby Boomers may not be saving enough to continue their lifestyle into retirement.
Accumulating 20 times their pre-retirement income in savings by retirement may be a pipe dream for most mass affluent Baby Boomers.
Besides creating a realistic savings plan, it’s critical that the pre-retirement plan be tied to good retirement income planning. And that retirement income plan may need to include income annuities so that an investor can effectively swap a possible legacy for personal retirement welfare.