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Retirement Income Planning

It’s never been harder and more complex to finance a comfortable retirement then it is today. Unlike the past, where many could rely on the services of professionally managed pensions to pay their retirement incomes, these days that is simply not the case. Millions of Americans just like you have to rely on themselves to manage their retirement. This is a desperate situation, because most people don’t understand the complexities of the financial markets well enough to be able to derive a stable income from them. This leads to many mistakes being made and lots of money being lost. The ultimate end result of all of this is that many retirees simply outlive their money. So they either have to go further into debt, rely on family members, or even have to go back to work in order to support themselves.

Here at the SAP Financial Group we understand how daunting planning for your own retirement can be. That’s why we made our number one priority to help people just like you create realistic retirement plans that will provide an income for the rest of your life.

But there are some pitfalls that you need to be aware of that can totally destroy a retirement income plan…

Longevity

One of the biggest mistakes people make when planning their own retirement is that they tend to underestimate their lifespan and minimize their risk of outliving their assets. With today’s current levels of science, nutrition, and medicine is extremely possible that more than half of the population will outlive the “average” life expectancy. Your retirement income plan needs to take this into account. A good retirement income plan will plan out your living expenses well into your 90s or longer. You always need to plan for the possibility that you will live a lot longer than you think.

Inflation

Inflation is a part of our economy whether we like it or not. Simply put, in most cases, tomorrow’s dollar is a lot weaker than today’s dollar. This means that things will cost more than they do now during your retirement. Also your assets won’t be worth as much in the future as they are right now. So instead of hiding our heads under the sand and wishing this problem would go away, it’s much better to make a realistic plan for dealing with inflation. That’s why we like to include investments that have the potential to outpace current inflation within the portfolios of our retirement income planning clients. This way you can live comfortably for 10, 20, or even 30 or more years without worrying about your money running out.

Withdrawal Rate

Using a conservative withdrawal rate throughout your retirement is one of the easiest ways to dramatically decrease the likelihood that you outlive your assets. At SAP Financial Group, we take a long, hard, and honest look at your financial situation to give you a realistic guideline for your withdrawal rate. You will know exactly how much you need to save in order to meet your lifestyle goals, and you’ll be able to rest easy knowing you won’t outlive your money.

Health Care Expense

Healthcare expenses can be one of the biggest outlays that you’ll face during retirement. This is because healthcare is getting ever more expensive by the day, and many Americans have inadequate health insurance coverage. Just one or two serious medical bills can totally derail a great retirement income plan. That’s why it’s important that we address this risk from the beginning and make sure that we set aside assets specifically for healthcare and seriously consider purchasing a long-term healthcare insurance policy.

“Each client is given a custom personal financial statement that comes complete with income and expense analysis. This personal financial statement is created based on your personal financial objectives. We only recommend solutions that maximize your total income in retirement and minimize risk, instead of focusing on products that make us the most commissions.”
Scott Plamondon