Retirement Income Planning

After years of working and diligently saving for retirement you are now faced with the biggest challenge. Turning your savings in to a reliable stream of income that may need to last for more than 30 years.  Let’s look at five possible risks that you may face during your retirement.

Longevity

Who would think living a long life was a risk.  Let’s say your average life expectancy is age 85 and you plan your retirement income based on the average.  If you are in great health at age 86 you may find yourself out of money and living just on social security.

Sequence of returns

After saving for retirement for decades you have most likely seen stocks and bonds have good and bad years.  The order of the good and bad years is the sequence of returns and during your accumulation years the order is not that important.  Now that you are transitioning into the distribution years the sequence of the returns is much more important.  When the down years come early in your retirement it can greatly increase the risk of running out of money during your retirement.

Inflation

Inflation has not been a big factor during the past few years. However over a longer period of time 3% or greater inflation would be a reasonable expectation.  Did you know that your living expenses would double every 24 years at a 3% inflation rate.  

Taxes

Taxes can be major drain on your retirement income. Did you know that you may have to pay taxes on your social security benefits? Depending on your income up to 85% of your social security benefits can be subject to income taxes. There are several strategies that can be used to minimize your taxes and increase spending money during retirement.

Health Care Cost

For most retired couples health care cost will be one of their largest expenses even if they never require long-term care.  Planning for these additional expenses upfront may help you achieve a successful retirement.

During our retirement income planning meetings we will talk with you about how you envision your retirement. Do you plan to travel, volunteer or spend time doing your favorite hobby?  We will gather a lot of information about your expenses, assets and liabilities so that we will have a good understanding where you currently are financially.  With your retirement vision in mind we will develop an income plan for your review.  

Sledge and Company, PLLC is a Certified Public Accountants and Consultants firm / Sledge and Company Wealth Advisors, LLC is affliated with The Wealth Group, LTD, a North Carolina Registered Investment Advisory Firm.  Securities offered through Capital Investment Group, Inc. Member FINRA/SPIC - 100 Six Forks Road, Raleigh, NC 27063 - (919) 831-2370.  


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