Uncomfortable Questions About Your Retirement Income and Expenses
If you haven't given it much thought, the questions I'm going to ask about your retirement income and expenses might make you feel uncomfortable!
Do you know how much money you’ll need every month in retirement? Most of the time, clients I meet with don’t know what this figure is. It’s not as simple as calculating your current expenses because there are expense items that change in retirement. For example, the cost of your retiree medical coverage will likely increase, 401k contributions will cease and taxes typically decline. Then, we have to account for inflation and increased expenses in areas such as medical as you age. This is so important because most people want to plan on a long retirement without the fear of running out of money.
Next question and this is the difficult one; Do you know where your guaranteed sources of income are coming from? How about your non-guaranteed sources? What is the rate at which you will draw on those assets and when might those resources deplete. Will your drawdown rate be too high causing you to run out of money in retirement? Will your withdrawal rate be based on a guarantee or will it need to fluctuate to accommodate both growth and losses in the market or even taxes?
If you’ve ever worried about outliving your retirement nest egg, these questions may raise your blood pressure a bit. Not being able to answer these two questions may mean that you have an incomplete financial plan that is based upon guesswork, hoping for the best for the future. Well, have you ever heard the saying “Hope for the best, but plan for the worst?”
I believe in being prepared and planning for the future. One of the most important things that I provide my clients is a detailed financial plan that provides the answers to those two questions, as well as many other questions. With the use of technology, I provide a blue-print that helps my clients understand what their future financial landscape looks like.
If you wish to stop guessing and see what your future might look like, I’d encourage you to click the button below and set up a complimentary meeting with me! The future begins now! I look forward to talking to you!