Will you have enough retirement income to live comfortably? It's a question that eats away at many people, especially as they are living longer and the economy remains in flux. At Geisbauer Wealth Management, we believe retirees are best served by a variety of income sources for two reasons: it may help preserve your savings if one revenue stream dries up, and it can decrease the odds that you will outlive your retirement savings. Managing risk in retirement planning and preserving capital is at the heart of what we offer.
The Importance of Diversifying
Generating cash flow in an unpredictable market is a challenge. But spreading your investments among different classes of assets will help toward ensuring you have retirement income sources. As wealth management specialists, that is what we strive to achieve. There are numerous ways to do this. Every client is treated as an individual with unique goals. We carefully balance your time horizon until retirement, your lifestyle, and how comfortable you are with risk.
Types of Retirement Income
Income streams include a variety of passive and active investments. Some are predictable and some are heavily influenced by the state of the market. Rest assured we work to allay your risk in every possible way, if that is what you desire. We want to put your most cherished goals - living independently, providing for illness or incapacity, or leaving a legacy - within reach.
The Most Common Sources of Retirement Income Include:
Social Security - For now, you can receive monthly SSA payments as early as age 62 at progressive rates. Remember, though, that the longer you wait to sign up, the more generous your payments will be. Social Security alone is not enough for most people.
IRAs and 401(k)s - These can be very solid ways to generate guaranteed retirement income, provided you don't withdraw it beforehand. Contributions offer tax deductions during your working years.
Roth Accounts - Some retirement savings are subject to taxation at the time you are allowed to withdraw them. A good strategy to take the sting out is to invest a portion of your after-tax money into a Roth IRA or Roth 401 (k) in order to pre-pay part of these taxes. Roth earnings are tax-free, and so are withdrawals after the age of 59½. Is it right for you? Give us a call and we'll discuss it in detail.
Pensions and fixed annuities - Not many people receive them anymore, but if you are among the fortunate ones, the government insures them even if your employer fails. You can also create your own pension from your savings by buying a fixed annuity.
*Annuities are not FDIC insured. Annuities are long-term, tax-deferred investment vehicles designed for retirement purposes. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Withdrawals made prior to age 59 ½ are subject to 10% IRS penalty tax. Surrender charges apply. Guarantees are based on the claims-paying ability of the issuing insurance company.
Stocks and bonds - These are flip sides of a coin in retirement planning; one aims for portfolio growth and the other strives for a measure of predictability and limited loss. Yet both have the potential to help you keep up with inflation rates. Let us discuss the advantages and downsides of each when we discuss your retirement income strategy.
*Stock investing involves risk including loss of principal.
*Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
CDs - While interest rates on certificates of deposit have dropped significantly, they are FDIC Insured and offer a fixed rate of return if held to maturity. Some retirees keep a year or more of living expenses stashed away in these accounts.
*CDs are FDIC Insured and offer a fixed rate of return if held to maturity.
Where Will You Live?
Aging inside the home you have come to love has become a popular option. If you still have a hefty mortgage, we can show you possibilities for paying it down sooner, so payments will be one less thing to worry about.
No one likes to think about it, but it is wise to consider long-term health care. The average cost is more than $6,000 a month, according to the U.S. Department of Health and Human Services. How will you pay for it? We can look at your portfolio and make recommendations for vehicles such as long term care insurance and life insurance, fixed annuities, trusts and pensions. Don't let the burden fall to your loved ones; know the advantages and the tax consequences. Discuss it now with our wealth management team.
Retirement income planning is a highly complex process that involves some trade-offs. We are an experienced, independent financial consultant who can provide the trusted guidance you need to enjoy life after work.
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