Congratulations on reaching your retirement! However, the journey doesn’t end here; it’s time to start building income strategies to ensure financial security throughout your golden years. Balancing income, expenses, and portfolio growth is crucial for a sustainable retirement. Here’s a comprehensive guide to help you navigate this phase of life.
Considering income sources
Previously, people may have relied on pensions and a nice Social Security check to get them through retirement. Now, Social Security, part-time work, rental properties, and passive income strategies are all different forms of income sources that can help you to sustain your retirement lifestyle.
People can also use their IRAs and 401(k)s to invest in income-generating assets designed to be withdrawn as income in retirement. Not only that, but many retirement accounts are tax-advantaged, so make sure you know how to use these tools properly.
Assess your income sources using income planning specialists and financial professionals to gauge your financial inflow effectively. This will help you to understand how much money you have coming in every month.
Managing Expenses
Estimate annual expenses. While it doesn’t need to be exact, create a reasonable estimate based on your current spending habits, accounting for potential surprise expenses. Don’t forget about withdrawal strategy planning. Calculate how much you’ll need to withdraw from your retirement accounts to sustain your lifestyle and estimate how long your accounts will last based on this projection.
Optimizing Your Retirement Portfolio
Asset Allocation: Consider the distribution of stocks, bonds, and other investments in your portfolio. While there’s no one-size-fits-all approach, the “120 rule” is a commonly referenced strategy.[1] This rule suggests that the percentage of your money invested in stocks should be 120 minus your age.[1] For instance, if you’re 65 years old, consider having 55% of your portfolio in stocks.[1] However, this is a general rule to start the conversation about what your true allocation should be—remember, this rule doesn’t factor in your unique situation and needs!
Tailoring Your Approach
Personalized Financial Planning: Your retirement needs are unique. Seek personalized advice to tailor your financial strategy to your specific circumstances. Every individual’s retirement plan should be customized to suit their distinct lifestyle and financial requirements.
Seeking Professional Guidance
If you require assistance in setting up your retirement portfolio for long-term sustainability, consider reaching out to financial professionals for a complimentary review of your finances. They can offer tailored guidance that may help you to achieve financial security in your retirement years.
