10 Part Retirement Planning Series: Part 10
Many Thanks from the Desk of Matt Nelson, CEO of Income for Life
Retirement planning is an often complicated and tricky journey. When you’re in your 20s, you’re told you need to start planning, but aren’t offered many tools in order to really find success. In your 30s, you’re told that if you haven’t started to put money away for retirement, you’re already behind. By the time you’re in your 40s, you may find yourself scrambling to find the income to sustain you in your retirement. At 50, you’re looking towards retirement and wondering if you’ll even be able to retire, let alone stay retired. This is a common problem all throughout the United States and if you’ve ever felt like any of these scenarios at any age, know that you’re not alone.
Here at Income for Life, we are able to provide you with a variety of tools in order to better help you be prepared for your retirement years. We appreciate your interest in our company and your willingness to learn more about retirement planning. Over the course of this 10-part email series, we will cover a variety of topics that have become more important in retirement planning and investing over the last several years. From measured risk with investing to the fear of outliving your retirement income, we will help you not only have a better understanding of these topics, but help empower you to take action concerning your retirement needs.
As we take this journey together, know that your guide, Matt Nelson, is ready and willing to help you with all your retirement questions and concerns.
A Little Bit About Matt Nelson
Matt Nelson is the President and founder of Income For Life, LLC, and the host of Income For Life Radio. He has been featured both nationally and regionally in over 200 publications as one of the industry leaders in retirement income planning and has trained both clients and advisers across the country on how to properly structure their retirement income planning portfolios.
A Premier Retirement Planning Firm
Income for Life is a nationally recognized retirement planning firm that has the knowledge and experience to back up that standing. We focus on providing our clients the retirement solutions that they need, and not ones that they don’t. It’s important to note that we’re an independent retirement planning firm that maintains many relationships with the top insurance companies and have a wide variety of products available in order to find the right fit for you, not us. The best part is that our services are completely free to you, now and moving forward, should you opt to work with us for your retirement planning needs. The many annuity companies that we work with pay us for providing you with the exact services and investments that you need, not you!
As you learn more about how to navigate your retirement income through this 10-part email series, keep us in mind for when you need help or access to top retirement products, because Income for Life is truly a premier retirement planning company. We hope you enjoy this journey with us and would like to personally thank you for your interest in our services and expertise here at Income for Life.
The Retirement Mindset Shift
How you think about retirement is often dictated by your age and stage in life. As a young adult, the general consensus is that you should put aside even a little bit each month for retirement in your later years. An industry peer said it well when he told a young lady over a Memorial Day picnic that it doesn’t matter how much you have, the biggest benefit you can give yourself is time. Even if you just start by putting $50 aside each month from a young age, you have time to accumulate more money than those who start later in life. However, that doesn’t mean that there aren’t a variety of options available for individuals who start saving for retirement at any age.
From whenever you start saving and investing for retirement up until age 50, many individuals fall into a financial phase of life called the Accumulation Phase. This is a phase of life where you try to accrue and save as much money as possible. You may even be aggressive with your money and invest in a wide variety of sources, including the stock market in order to gain as much value from your money as possible.
Conservation of Retirement Income
Around age 50 a mental shift happens in how pre-retirees look at their financial situation and needs. This mental shift takes individuals from the Accumulation Phase and transitions them to the Preservation Phase. This new financial phase of life encourages individuals to be more cautious with their nest egg in order to guarantee an appropriate amount of retirement income. Risky options no longer seem reasonable, as they put this nest egg in jeopardy.
Moving from the Accumulation Phase to the Preservation Phase is completely natural in this stage of life. It helps to guarantee your retirement income. As you look forward towards retirement, it’s time to consider different avenues for your retirement investments and income in order to help preserve the money you’ve earned while still growing it at a reasonable pace.
What Does Guaranteed Mean?
When you shift into the financial Preservation Phase of your life, you need guaranteed income options that will preserve your current nest egg. You can’t afford to lose any of the wealth that you’ve gained, or else you risk having your money run out during your retirement years. Guaranteed means that any money you invest will not be lost. Period. There are many premier annuity products that are genuinely guaranteed income as you move into this new financial phase of life and prepare your investments to support you through every day of your retirement. It’s important to be conservative with your money and your financial choices in order to enjoy your retirement.
Income for Life is the Top Rated National® Retirement Planning company that can help you make important and rational decisions about your retirement nest egg. Let us help you through this new financial phase of life and give us a call as part of your next steps in your retirement income planning journey.
A Snapshot of a Pre-Retiree
When you think about individuals in retirement, you probably think of individuals in their 70s or 80s. While this would be a correct assumption, it’s not the full story. Demographics for both retirees and pre-retirees are quickly changing, as are the ways that individuals prepare financially for their retirement years. With that in mind, what do we know about pre-retirees and how they’re currently planning for their retirement?
Pre-Retirees…have roughly $163,577 saved for retirement on average.
Sometimes having $163,577 tucked away can feel like a lot. In fact, it’s a substantial amount for anyone to have in savings, however, for Baby Boomers heading towards retirement, it’s simply not enough. $163,577 is the average amount of money that Baby Boomers have stashed away for their retirement years. Let’s take a minute to break this down. If a person ends up having a 20 year retirement and has $163,577 to cover these 20 years, that means that each Baby Boomer will have only $681.57 to live off of each month. Would that cover your monthly expenses?
Pre-Retirees…are living longer than any generation previously.
When you look at each generation, the next one in the line seems to be living longer on average than the previous one. Statistics prove this to be true. In fact, of current retirees aged 65, one in four of them will live past 90. So you’re no longer planning for a 20 year retirement, but 25 to 30 years instead. Can your money provide you a reasonable standard of living for that long?
Pre-Retirees…who are homeowners are still paying on mortgages.
Not only did previous generations have access to pensions and other work benefits that helped them plan for retirement, they also had to deal with substantially less overall debt. While pre-retirees aren’t facing the massive student loan problems of younger generations, over 30 percent of pre-retirees still have an outstanding mortgage heading towards their retirement years. This can severely hamper the overall retirement income planning process and make your retirement years difficult. Do you have a plan in place to manage your debt and prepare for retirement?
Pre-Retirees…are expecting to retire later than previous generations.
When do you think you’ll retire? At age 62? At age 65? These ages are pretty standard ages of retirement for those who are currently enjoying their retirement years. In fact, Americans can start receiving Social Security benefits as early as 62 years of age. However, pre-retirees are faced with a new dilemma. Over 25 percent of current pre-retirees are not planning to retire until the age of 70. Between the lack of savings and increased life expectancy, many individuals are making the choice to prolong their working years are retiring later. When are you going to be able to retire?
Pre-Retirees…are not financially ready for their retirement years.
What it boils down to is that most individuals in their pre-retirement years simply aren’t financially ready to retire. The current snapshot of America’s pre-retirees paint a grim picture. However, there are still options available for you to get help planning for your financial future. Income for Life is the nationally rated retirement planning company that can show you how.
Are You Going to Outlive Your Retirement Income?
Image this scenario: You spend 40 years working for various companies doing IT work over the years. You finally felt ready to retire at 67 years of age. You thought you were ready, but by the time you are 82 years old, you find that you have completely run out of retirement savings and only have Social Security to fall back on. Would you rather face running out of retirement income at 82 or be dead? The answer may surprise you, or it may not. According to research done by the Allianz Life Insurance group, 77 percent of individuals interviewed between the ages of 44 to 49 fear outliving their retirement income more than they fear death. And this percentage only continues to grow.
Fifteen years may not seem like enough time to burn through your entire retirement savings, but with rising costs in health care and increases in longevity, 15 years is actually a relatively short time. Let’s say you retire at age 62 and live to be 84 years old (which isn’t an unreasonable assumption). That’s 22 years you need to be able to have income put away for to sustain your needs and lifestyle.
Calculating Your Retirement Income
Understanding how much money you need for retirement can often be difficult. When you calculate this income, you’re making your best guess on your longevity and several other factors. However, this will still get you in the ballpark of what you will need to aim for in order to retire without the fear of outliving your retirement savings.
The current rule of thumb, that will help you get into a ballpark range for retirement, is to calculate roughly how much you want to withdraw per year and then multiple that by 25. Here’s why. Let’s say that you currently make $80k per year. Many will tell you that for retirement you will need to have roughly 80 percent of that income per year available in order to sustain your current lifestyle, which would be $64k. Plan on withdrawing four percent from your retirement income savings each year. The inverse of four percent is 25, so multiply $64k by 25. This gives you a result of $1,600,000. While this number is a bit of an overestimate because it doesn’t take into account your investment’s annual growth, this will get you in the right range you will need set aside before you retire.
Face Your Fears
There are other factors that go into calculating this income, including Social Security and other income generation sources, but it’s no surprise that so many Americans fear running out of money during retirement when the end financial goal is exceptionally high, with few safety nets if the money runs out. The best way to address your fear of retirement income is to tackle it head on with experienced and knowledgeable help. Making your money work for you is exceptionally important in order to make sure you have enough income to retire without the fear of running out. Turn to the trusted advisors at Income for Life in order to enact a retirement income savings plan now because your future truly depends on it.
Troubled Financial Waters Need Simple Solutions
We’ve spent a lot of time talking about the many pitfalls with retirement income planning and the difficulty you have probably faced or will face when trying to accumulate and maintain your wealth to sustain your though retirement. Often it can feel like a dreary future. But with the right planning and support, you can plan for your retirement needs effectively and rationally.
The team at Income for Life is dedicated to your retirement planning success, and have a variety of options available in order to help you plan for your golden years. When turning on the television and hearing about the current economic climate makes you queasy, or the outcome of elections has you concerned for your nest egg, rest assured that you have an effective plan in place to help you comfortably make it through your retirement years when you work with Income for Life.
Simple, Effective Solutions
There are several different ways to look at retirement income planning and many different tools available that can increase the size of your nest egg. The best solutions are often ones that are simple and low risk, and that’s exactly what we recognize here at Income for Life. We want to provide you with simple and effective solutions for your specific needs.
Savings and 401(k)
The most common ways for individuals to start accumulating money for retirement include standard savings accounts and 401(k) plans offered through work. These are great places to start and a 401(k) is a convenient and easy way to grow your money, however, these options alone aren’t going to help you stay retired.
Annuities are simple, contractual obligations with insurance companies that you pay into in order to receive a guaranteed paycheck later down the line, such as during your retirement years. There are many different types of annuities, because one size never fits all. Let the Income for Life team help you navigate the world of annuities to provide for you during retirement.
Life insurance is an important aspect of your retirement planning because not having it can heavily impact how long your retirement income lasts. Life insurance isn’t just for after you pass, it can also support you due to injury or illness during retirement so that you don’t have to pay out of pocket.
Many Americans rely on Social Security, and while it is an important part of many individual’s retirement income plan, it’s not as reliable as it used to be. This is something to take into account in your retirement strategy. Know how much Social Security will be of benefit, and know how much you will have to come up with.
There are other options for retirement income to consider, and at Income for Life, we can discuss with you all three major ways to keep your money growing and providing you with income throughout retirement. With Income for Life, you will receive knowledgeable services with no strings and no cost to you. Call us to learn more.
4 Easy Steps in Order to Prepare for Retirement
Preparing for retirement doesn’t have to be scarey or cause you anxiety. In fact, if you plan ahead, you’ll probably feel pretty good about reaching retirement age. We know this isn’t always the case for many Americans thinking about their retirement years, however, there are many different approaches in order to reach your retirement years prepared. We’ve broken down the process into four relatively easy steps to help you along your personal retirement income journey. You may not start with the very first step, and you may not go in order, but these common steps will get you where you need to be in order to enjoy retirement without the fear of running out of income.
Talk with a Qualified Financial Advisor
One of the best things you can do, no matter what stage of retirement planning you’re in, is talk to a qualified financial advisor who specializes solely in retirement planning. This is the best way to learn about where you are in the retirement income planning process, what retirement income strategies are best for you, and how to get where you need to be with your current situation. It’s important to make sure that the financial advisor you speak with has experience with retirement planning and the knowledge to back up their approach to helping you meet your goals.
Start Saving Now
The number one thing we hear is that the money simply isn’t there in order to start saving early. But it’s important to make this a priority. It doesn’t matter if you start with just $50 a month when you young, or you dive all in today by putting aside money, you have to save. It’s possible to make even a little money work for you instead of none at all.
Follow Your Plan
It can be tempting to veer away from your retirement income plan in order to spend money on a vacation or to not have to worry about a rigid budget, however, don’t! Stay the course with your plan in order to make sure that you are well prepared for your retirement years. You don’t want to find yourself in a nursing home situation, at the will of others, when your money runs out because you didn’t stick to your plan. If you do need to make changes to your plan, work with your advisor in order to course correct appropriately.
Invest and Diversify
Once you have a bit of money set aside, it’s important to make sure that money works for you. There are three different approaches to go about this: the bank way, the Wall Street way, and the insurance way. Each style of investment has its own pros and cons. Work with your advisor to figure out which is best for you and how to diversify your portfolio in order to get the best returns with the least amount of risk.
You don’t have to make millions in order to prepare for retirement. You just have to want to make plans for your future retirement income. Let Income for Life be your retirement planning advisors you turn to each and every time! Get started today.
Money: Master What You Don’t Know
In 2014, a new book rocked the financial planning industry. Life coach Tony Robbins addressed many different concepts surrounding how to master your financial future in his book Money: Master the Game. This book outlines many ways you can take control of your own financial future and they not only help you in your present, but also help you when it comes to planning your future retirement income. Here at Income for Life, we utilize many of Robbin’s principles when we help our clients plan for their financial future. Robbin’s brings up seven points in his book that we utilize throughout our entire firm in order to help you be successful with your retirement income.
#1 Commit to Mastery
Just like anything else in life, if you want to be successful at it, you have to commit to becoming a master at it. Robbins discusses how if you want to find financial freedom you have to make a commitment to the steps that will help you succeed. Learn as much as you possibly can, and be rigorous and meticulous in your actions regarding your finances. We strongly believe in being the most knowledgeable retirement planning company and work hard to make sure you have the knowledge to succeed.
#2 Become an Insider
In order to succeed with financial planning for your retirement, you need to become an industry insider. This means that you need to know what your financial advisor knows and be able to utilize your money appropriately. Here at Income for Life, we’ve become the industry insider for you and will work hard to keep you in the know at all times about your investment options.
#3 Define the Price of Your Dreams
Knowing what your final financial goals are can help you define your journey’s path. You need to define the actual dollar amount it will take to achieve your retirement income goals, and we can help you do just that. Because it’s no one’s dream to run out of income in their 80s.
#4 Learn Where to Put Your Money
One of the most difficult aspects of retirement income planning is figuring out where to invest your money. The first thing to remember is to diversify your investments. The second thing is to choose a financial advisor that will give you opportunities that no one else can. Income for Life is a top-rated retirement planning company that has worked hard to foster industry relationships in order to offer exclusive investments.
#5 Gain a Lifetime Supply of Income
Robbins specifically addresses the benefits of annuities in order to guarantee income for yourself for life. Let us show you how.
#6 Invest Like a Billionaire
By learning about different investments, portfolio diversification, and how to find high gain, low risk investment opportunities, you will be able to invest to your fullest potential. We help you to diversify your portfolio, plan for future financial challenges, and grow your money in a low risk manner, because everyone deserves to be able to invest well.
#7 Live a Rich Life
We leave this step up to you. Rich doesn’t have to mean financially rich, but having financial freedom will allow you to live a more secure, fulfilling life, and that’s always our goal for each and every client we work with here at Income for Life.
Don’t Jump Without a Parachute: Risk Vs. Reward
As you work on planning your future retirement income or look towards preserving your current wealth, the question often comes up concerning the need to take risk in order to gain big rewards. It can be hard to balance risk and reward when it comes to your retirement savings as you want the most money you can accumulate by the time your retire, but you don’t want to risk losing any of that money in options like the stock market. So how do you maintain the appropriate balance? Today, in part eight of our retirement planning email series, we’ll explore this conundrum of risk versus reward with your investments.
A very simple way to look at your investments is akin to never jumping out of a plane without a parachute. You would never try skydiving without the appropriate protective equipment and reassurances from your tandem diving partner, so why should you make the same leap with your investments without the appropriate safeties in place. A more sophisticated way to understand risk and reward with investments is to consider a skateboard.
Are You Going to Jump on the Skateboard?
Imagine that you’re in a parking lot and there happens to be a skateboard sitting there. If you were a child, you might run up to it with enthusiasm and hop right on. If you succeed, you gain a sense of jubilance. If you fail, you fall, brush yourself off, and probably try again. A child takes this risk and has a higher chance of recovery if there is failure.
Now imagine you’re a 40 year old faced with the same skateboard. You see it and there is a sense of nostalgia. You’d like to try it, but you fear falling, because it’s much harder to get back up and brush yourself up then it once was. The same can be said about your current retirement savings at this age. You are less likely to take risks with them because you no longer have the time nor ability to easily bounce back.
Let’s say that you’re now 70 years old and you see that same skateboard. If you decided to hop on, the results could be catastrophic. In fact, you’ll probably just steer quite clear of the skateboard all together.
Measuring the Risk in Your Investments
Just like with the skateboard or parachute, you want to be able to take risk for rewards when there is more ability to recuperate. But as your finances become more critical to your insured ability to have income through retirement, you will want to be more cautious with your investments. In either scenario, you don’t want to be reckless with your money, but rational and thoughtful in order to continue to grow your income without unacceptable risk. It’s important that you find the right investment strategies for you, and here at Income for Life, we provide a wide variety of retirement income planning options, as well as a wide variety of annuities, all with different levels of risk and reward. Work with us to find the right balance for you.
The Professional Financial Advisor You Can Trust
It can often be difficult to know who to trust when it comes to your money. After all, who else is going to have your best interests at heart when it comes to your money besides yourself? In fact, that’s a question we are often asked here at Income for Life. What makes us qualified to help you plan your retirement income and invest your money?
More often than not the number one thing you will want to look for with a financial advisor is one that experienced, especially in the specific area that you need help with. Experience and a great reputation are key when you are looking for the right financial advisor.
However, take a minute to think about what exists that guarantees a financial advisor or retirement income advisor always act on your behalf. The word fiduciary might come to mind, and with current changes in the Department of Labor, all financial advisors are required to be fiduciary compliant. So, what does this mean for you, and why is it such a great change in the industry?
Department of Labor Fiduciary Rule
As of June 9, 2017, the new expansion of the Department of Labor’s Fiduciary Rule went into effect, even after attempts to postpone it. What this rule does is it expands the definition of an “investment advice fiduciary” to encompass all financial advisors and retirement income planners regardless of certification or licensure. This piece of legislation helps to protect individuals and their hard earned money no matter who they consult as a retirement income planner.
What changes does this rule make?
Previously anyone could be a retirement investment planner and opt to invest your hard earned money in opportunities that had high commissions or fees, even if they weren’t in your best financial interest. Licensed fiduciaries are required to always invest in the best interest of the customer, not their own personal paycheck. The new rule requires that all investment advisors act in the manner of a fiduciary and be transparent with fees and commissions.
Why is this rule a good thing?
This new rule helps to protect everyone’s personal finances when working with an advisor in the industry, no matter their certifications. This way you can opt to work with any advisor that you feel comfortable with and you know has excellent experience. You get to pick truly the best financial advisor and not have to worry if they have your best financial interests at heart, because they are now legally required to.
Impacting Your Choices
This new rule may impact the decisions you make concerning your retirement planning income. It allows you to choose a professional who has the most experience and is best qualified, and you can rest assured that they will be transparent with commissions and fees.
Here at Income for Life, while this rule is a great benefit for the industry, we’ve always worked hard to provide our clients with the best products and services for THEIR needs, not our own. We have always strived to be fiduciary compliant in order to best serve our clients, because you truly deserve the best when it comes to your retirement income. Let us continue to be the retirement planning firm you turn to and trust, because we’ll always be there for you.
What Comes Next?
As we’ve journeyed through this 10-part email series on retirement income planning, we’ve just touched the surface on many topics that can help you be confident that you will have income for the rest of your life. You should never have to worry about your retirement savings running out when you’re well into your golden years, however, we know that it happens time and time again. Our main goal here at Income for Life is to make sure that when you retire, you’re financially prepared to stay retired. Over the course of this retirement income planning journey, we’ve talked about many different topics, including:
- The Retirement Mindset Shift
- A Snapshot of a Pre-Retiree
- Outliving Your Retirement Income
- Mastering What You Don’t Know About Money
- Risk Versus Reward With Investments
After reading all this information over the last 10 days, you may be asking yourself what you need to do next, or you may even feel a bit overwhelmed that you’re behind on your own retirement investments. That’s okay! It’s completely normal to feel these ways. We’d be more than happy to talk to you about any one specific topic or all of them, if that’s what you need. But what’s most important is that you take action now.
You have the ability to act on this information, the ability to ramp up your retirement income planning now, and the ability to get the help you need from Income for Life. Our sole job is to help individuals, just like yourself, make sure you are financially prepared for retirement. Let’s get started today!
Schedule your free appointment with Matt Nelson by clicking on the above banner so you can feel confident about your retirement income plan and your ability to stay retired when that day comes. Because “Retiring is easy, but staying retired is difficult.” When you choose Income for Life, staying retired doesn’t ever have to be difficult.