Retiring Soon?
Accumulation vs. Distribution
There are mainly two phases when saving for your retirement.
Accumulation Phase - goal is to save as much as possible and let the nest egg grow as much as possible; typically ages 25-50
Distribution Phase - goal is to make sure the income from the nest egg will last as long or longer than your retirement; typically ages 50+
The strategies to distribute assets are inherently different from those to accumulate assets.
Retirees are commonly concerned with:
- shrinking defined benefit plans
- shrinking Social Security pensions
- rising health costs
- inflationary risks
They are typically looking for:
- a predictable income stream
- strategies designed to provide upside potential with limited downside
- strategies to lessen the overall risk of the principal amount
Recognize:
- #1 fear for retirees is running out of money
- typical cost for long-term care for a 65 year old couple is approximately $3000/month, $5000/mo in California
- roughly 30 years in retirement
- conservative maximum annual withdraw rate is about 6% to last for retirement
- the timing in which losses/gains occur makes a difference in the maximum annual withdraw rate
Planning for retirees is especially important. If you or someone you know is ready to retire, feel free to give me a call.
