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How to Create Your Retirement Paycheck Using a Total-Return Strategy (Instead of Chasing "Income")
By Zack Gutches, CFP®, CPA, True Riches Financial Planning
Approaching retirement is a big change. For decades, money has flowed into your bank account every month, and you're accustomed to adding to your accounts because you've made more money than you've spent for a long time. And if we're being totally honest, inertia is a strong force; it's really difficult to flip the direction after decades of moving one direction (not to mention the "how to" is completely different as we'll unpack!).
The question most soon-to-be-retirees ask themselves is:
“How do we turn our retirement nest egg into a paycheck that is reliable, flexible, optimized for taxes, and sustainable for the long-haul?”
For many pondering this, the default is often to what feels safest — income-producing investments like dividend stocks, bond interest, rental income, and/or income-annuities — anything that sounds like a steady income stream.
And that instinct is totally understandable. But we have to ask the question: "Is building a retirement plan around “income-only investments” actually the best way to create cash flow that is reliable, flexible, optimized for taxes, and sustainable for long-haul?
As I'll make the case for below, the answer is often no to all four of those criteria in the aggregate. And while this post is not intended to be an in-depth nor exhaustive list, these are some of the hidden problems with only chasing income-producing investments in retirement.
I’m Behind on Retirement Savings at 45, 50, or 55. Now What?
By André Small, CFP®, MBA, A Small Investment, LLC
Most retirement advice starts with the same assumption: The sooner you build retirement savings the more time you have to let compounding do the heavy lifting.
Many people reach their mid-40s, 50s, or even 55 and realize their retirement savings aren’t where they should be. And in most cases this is due to other priorities: raising kids, paying off student loans, buying a home, starting a business, or helping parents.
Others simply never had access to a retirement plan or didn’t earn enough early on to save much. Whatever the reason, you’re not alone, and more importantly, you’re not out of time.
This post is for those who feel “behind” but are ready to catch up. Honestly, strategically, and without shame.
Why Do So Many People Fall Behind?
Before we dive into solutions, it’s important to normalize the problem. Falling behind on retirement savings is incredibly common, and it doesn’t mean you’ve failed financially.
According to national data, the median retirement savings for people in their early 50s is well below what most experts recommend for financial security. Yet, this doesn’t reflect the willingness to continue the habit of retirement savings.
When to Claim Social Security: How to Think About 62, FRA, and 70
By Phil Weiss, Apprise Wealth Management
One of the most common Social Security questions is also one of the hardest to answer: when should you claim?
Many people reduce the decision to three ages: 62, full retirement age, or 70. That is a reasonable place to start. But by itself, it is not enough.
A better question is this: Which claiming age best fits your life, your household, and the role Social Security plays in your overall plan?
That is because a good claiming decision is about more than finding the biggest monthly check. Your cash flow needs, work plans, taxes, survivor protection, and, in some families, benefits for dependent children all help shape the decision.
This is the second post in my four-part Social Security series. In Part 1, Social Security for Women: The Basics to Know Before You Claim, I covered the foundation: how you earn benefits, the key claiming ages, and why not to lump retirement, spousal, survivor, and child benefits together.
This week, I want to focus on how to think through the actual decision about when to claim Social Security.
Following along with the blogs of financial advisors is a great way to access valuable, educational information about finance—and it doesn’t cost you a thing! Our financial planners love to share their knowledge and help everyone regardless of age or assets.
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