Running Out of Gas In Retirement

Running out of gas while driving late at night pales in comparison to running out of money while in retirement! Yet, that is likely to happen to most who have not planned properly due to increased lifespan, inflation, ever increasing taxes, increasing costs of health care, stock market volatility/loss and other factors. It is important to remember that guaranteed, sustainable, inflation protected income from other resources, in addition to social security/pension income, is required for most of us who will experience 25 years or more in retirement when we will have transitioned from our accumulation phase of life, during which time we could absorb and accept risk, to the preservation and distribution phase of life when we need guaranteed paychecks and ‘playchecks’ and the elimination of risk!

Additionally, there is the ‘survivor income gap’ that will affect the survivor of most married couples, often resulting in a significant loss of income [reduced social security and reduced or lost pension benefits] after the emotional loss/passing of the first spouse. This survivor income gap is rarely discussed or even recognized, yet it must be discussed and understood as it will affect almost every married couple in retirement. There are solutions to bridge that survivor income gap with proper planning

Most people, approaching or in retirement, are simply not aware nor have they properly planned for their future financial security and for legacy purposes, assuring the passing of assets to the next generations if, indeed, that is their goal. Again, proper planning is required to achieve these objectives.

It is imperative that, as you approach or are in retirement, you must maximize your assets, eliminate risk to principal and absolutely guarantee that you will NEVER run out of income.

Most advisors today, due in large part to market volatility, advocate that you take no more than 3-4% withdrawal/income each year from your assets [adjusted for inflation] so that you do not run the risk of running out of money. Notice, that this strategy does not guarantee running out of income; it merely lessens the risk! With proper planning, there exist strategies that allow for 5-7% or more per year income withdrawals [depending upon age] and a GUARANTEE that you will never run out of income.

So, as you can see, there is no reason to run out of gas…(income) in retirement!  Rather, with proper planning and use of the appropriate strategies, you can be assured and guaranteed that your income security and legacy issues will be fulfilled and you truly can Sleep Well At Night.