In the past, many of us relied on three sources of funds when our paycheck from our employer stopped at retirement: a well-funded Social Security system, substantial corporate pensions with retiree health benefits, and a strong personal savings rate.
Unfortunately, times have changed dramatically. Now, the responsibility for providing and planning for retirement income has shifted away from government and employers to individuals. We now have a large number of employer-sponsored defined contribution plans (such as 401K, 403B, 457). These plans are excellent ways to save but we are only now witnessing the first wave of retirees who will live off this type of savings. It remains to be seen whether defined contribution plans will be adequate for an anticipated longer life.
The design of a retirement income portfolio has changed in the 21st century. The design has shifted from an accumulation mindset to a distribution mode. There are many variables involved in creating an income plan for today’s retirees. Factor in the following when partnering with an advisor to design your personal retirement income plan:
- Plan for a long life
- Health care expenses will increase
- You’ll need a housing plan (home values have dropped in some areas)
- Plan for long-term care
- Inflation may matter more in the future
- Transition your financial goals – combine growth opportunities with guarantees
- Decide when to begin receiving Social Security benefits
- Analyze the taxes that may be assessed on your retirement income
- Devise a distribution strategy for your retirement savings
You can request a free 6-page worksheet to help with Retirement Income Planning by calling
903.534.5477 or by simply downloading a copy below!