For the last decade, we have heard about the ten thousand people each day heading into retirement. Still, there are those of us who continue to work hard and accumulate assets for the future. Regardless of how great of a saver you might be, its wise to understand how to one day turn your assets into income.

Some believe this involves only your stock and bond portfolio across your 401k plan, IRAs, bank accounts, and personal investments. In reality, your income strategy may also incorporate real estate, healthcare, private equity, tax deferral, insurance, and advanced estate planning, just to name a few.

In Part 1, I want to share frequently asked questions and concerns I often receive from clients and other professionals:

“We are in a low return environment.”

“My legacy will be strained by my longevity.”

“Will lower interest rates generate less income?”

“One of my greatest fears is managing my finances.”

“How much monthly income will we need in retirement?”

“We don’t know how much we spend.”

“We can’t handle another stock market crash or recession.”

“How will I pay for healthcare in the future?”

“What is the best way to sell my business?”

“What happens if I am faced with a major health issue?”

We know questions may vary a little bit for each person’s situation. Below is a short list of key considerations and additional thoughts that provides ideas for some of these. You can also download our short Case Study on Tax Efficient Retirement Distributions as it highlights several of these points.

Provides a starting point and an early roadmap as you plan for the future.

Helps dictate the financial resources you may need, by when, and perhaps where you will live when the time comes to withdraw income from your savings.

Identifies the actual living expenses you cannot live without as well as your flexibility which can help improve your retirement outcome. This may also determine the type of solutions that would be appropriate for you.

If you retire before age 65 (medicare enrollment age), its likely you will have an additional expense to plan for which may come as a shock to some. This includes not only normal healthcare, but also disability and long-term care. There may even be some tricky tax implications you want to be aware of too.

Helps structure assets now across different types of accounts. It will determine if other solutions are appropriate (individual bonds, private equity, annuities, etc.) beyond traditional investment vehicles. The earlier this is established, generally the better.

Determines how to position assets just before you begin retirement and start withdrawing from your nest egg. Given today's market environment and valuation it is a timely discussion since this strategy is often best to structure in advance.

You don't have to be ultra wealthy to achieve this. Many incorporate certain types life insurance, advanced estate planning strategies, and charitable gifting in a very effective manner.

Something all investors of all ages need to better understand. This should not wait until retirement because by then its often difficult to implement favorable advanced planning strategies. Our Case Study above provides some nice visuals on this subject.

Worth optimizing to maximize your benefit and to also be aware of tax implications, spousal income, and survivior benefits.

Something we hear all the time. For those of you in this situation, I would argue a lot of personal financial planning is needed as well as guidance in order to maximize cash flow and future income needs.

Its likely at least two or three items on this list relates to most of us. As a result, you may want to explore the areas you are not confident in or have yet to address. In Part 2, we will dive into some examples of actual solutions that you may find of interest.

As always, we are here to help.


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