Broker Check

Retirement Income Planning

Where will your retirement money come from? Most people try to plan by using simple math concepts, such as earning a particular rate of return, or withdrawing a set percentage of their retirement accounts every year. However, the flaw in that strategy is that retirement is much too complex to apply simple math – there are far too many variables involved. If you are like most people, qualified retirement plans, social security, personal savings, and investments are expected to play a role in your retirement. But proper planning shouldn’t stop there.

Once you have estimated the amount of money needed in retirement, a sound approach involves taking a close look at your potential retirement-income sources. Outliving your money in retirement is a risk that many people fail to consider when planning for their financial future. Advances in science and technology contribute to a longer life expectancy. But what have we done to make sure our money lasts?

We understand that you have a specific vision in mind for your retirement, and we want to do what we can to help you reach those goals.

What Is Retirement Income Distribution Planning?

You’ve worked hard to accumulate the wealth you have. Now it’s time to devise a plan to make your assets last through your retirement years. Our retirement planners can help you with income planning strategies designed to stretch every dollar in your retirement account. We can help you compensate for and mitigate market risk, navigate the unknowns, keep up with legislation that affects your retirement, and engage in legacy planning.

Why Lifetime Income Planning Is Important

Having a healthy retirement nest egg is only the first step. You want to be careful not to withdraw funds randomly, hoping you won’t outlive your wealth. We want to make sure you have enough money to cover your living expenses every month while protecting your assets for the future. This means we need to be strategic about when to make withdrawals and which assets we should liquidate for that purpose.

How to Avoid Outliving Your Wealth

The investments in your retirement account will still continue to appreciate or earn interest, even as you withdraw from the account. There’s no need to liquidate your entire retirement savings as soon as the paychecks stop. Instead, we’ll create an income distribution plan that allows you to receive regular income while the rest of your assets continue to work for you.

Annuities are a great option for providing a guaranteed retirement income, much like a paycheck. We can purchase an annuity for the first several years of your retirement, strategically liquidating some of your assets. You’ll have a fixed income source while your portfolio keeps working for you. We can also switch our focus to income-generating investments to provide extra income for you.

What Does Legacy Planning Involve?

During retirement, many people think about the legacy they want to leave for their family. Our firm can help you with legacy planning, too. You may use a permanent life insurance policy to provide a benefit for your heirs. You can also create a will or a trust to distribute income to family members or support your favorite organizations.

Retirement Income Planning Frequently Asked Questions

How Long Will My Retirement Savings Last?
When you partner with our retirement planners, we work with you to answer that burning question. How long your savings will last depends on a variety of factors, including your expected living expenses, your Social Security income, your other income sources, and your tax obligations.

How Much Money Do I Need to Retire?
Most sources say retirees need anywhere from 60% to 80% of their pre-retirement income. We can help you calculate what your expected living expenses will be. The factors that most contribute to the cost include housing, transportation, insurance, out-of-pocket medical expenses, utilities, and food. You may also still have debt payments or dependents to care for.

Are There Any Guarantees Available for My Retirement Income?
Yes, in a way. You can purchase annuities to receive a guaranteed fixed income during retirement. Your Social Security benefits should also be a fixed amount you can depend on. We’re happy to talk to you about your retirement income distributions to provide you with some income security during your retirement years. 

How Is Retirement Money Distributed?
That depends on what strategies we utilize in your retirement plan. You can liquidate assets in your portfolio and make direct withdrawals from your retirement accounts anytime. Ideally, we’ll engage in distribution planning first, so you don’t outlive your wealth. You may also purchase annuities to provide a fixed income stream.

Do Retirement Distributions Count As Income?
It depends on where the distributions come from. Social Security income may be taxable depending on your gross income for the year. Roth distributions are tax free. Traditional retirement account distributions are subject to income tax. We can help you plan for and minimize your taxes during retirement as part of your income distribution plan. 

How Are Retirement Distributions Taxed?
When you receive retirement distributions, they will appear as ordinary income on your tax return unless you’re receiving distributions from a Roth account. How much you have to pay in income taxes depends on your total income for the year. Tax planning is essential during retirement to ensure you don’t slip into a higher tax bracket if possible.

Plan Your Retirement Income with Our Help

The retirement planners with Airey Financial Group focus in optimizing your retirement income distribution strategy, mitigating market risk and taxes on your behalf. Call us today to schedule an appointment with our team to ensure you don’t outlive your money in retirement.

Have a Question?

Thank you!