What is Your Retirement Income Plan?
Don’t Make This Common Retirement Mistake
Unfortunately, many people make the mistake of depending on unreliable investments to fund their needs and wants. But if those investments decline 40%, as they did during the 2008 recession, how will you cover your non-negotiable expenses while you wait for the market to recover? What if those investments never fully recover their losses?
The planning process focuses on your lifestyle goals - how and where you want to live and how much it will cost to fund your ideal lifestyle. We divide the predicted expenses into three categories: lifestyle needs, wants, and would-like-to-haves.
Needs are not discretionary and include shelter, food, and insurance, to name a few. Wants are negotiable and involve dining out, travel, hobbies, or club memberships. Finally, the would-like-to-have category could include major family vacations, a boat, or a second home. The items that fall into lifestyle needs versus wants and would-like-to-haves will vary based on what is important to maintain each person’s desired lifestyle.
Setting Up Income Streams
Each category discussed above will have different income streams to fund the expenses generated.
Your next step is to set up your monthly income streams to fund your lifestyle needs. While potential total return on investments is important to the plan, I find it beneficial to think in terms of monthly income or regular cash flow. Your income source for your needs is non-negotiable and must come in on a monthly basis.
There are two strict criteria for this part of your retirement income portfolio:
- The investment option must generate an income stream, either now or in the future.
- The income must be predictable or guaranteed.
Some examples of sources that fit these criteria are Social Security, pensions, CDs, treasury or municipal bond income, and annuity income.
To fund the wants part of your lifestyle, examples of possible investments include hybrid, non-guaranteed investments. These could potentially generate your anticipated return fairly reliably, but they would not be guaranteed and would be less safe than the sources of income that will be funding your lifestyle needs.
Learn how The Stanton Group WP can help you!
Schedule a call with our founder, John Stanton, to review our retirement income planning process, review what our retired clients have experienced over the past 17 years, and share 2 worksheets you can use to structure your personalized plan.
John Stanton is the founder of The Stanton Group WP. With more than three decades of experience in the financial services industry, he serves as an advisor for clients, focusing on financial planning and the investment strategies to support their financial plan. Based in Naperville, Illinois, John serves clients in Naperville, Plainfield, Darien, Aurora, Geneva, St Charles, and throughout the United States. Learn more about John’s services by visiting www.stantongwp.com or connecting with him on LinkedIn. You may reach John Stanton at 630-445-2380 or email JStanton@seacrestwm.com.
The Stanton Group WP provides investment advisory services through SeaCrest Wealth Management LLC, (the “Advisor”) a Registered Investment Advisor. Information in this message is for the intended recipient[s] only. Please visit our website www.stantongwp.com for important disclosures.
SeaCrest Wealth Management, LLC (CRD 147092) is a Registered Investment Advisor with the U.S. Securities and Exchange Commission, headquartered at 3010 Westchester Avenue Purchase, NY 10577.