I have some secrets to share with you today. Over the past 25+ years, I have helped families become comfortable and secure financially in and through retirement.
If I were to ask you what the secret to a happy retirement is, you might say it’s having $40 million, traveling around the world, or sipping wine while you get a foot massage. For most people, there’s one key factor that leads to a happy retirement when it comes to their finances. What would you guess it might be?
I read an article recently that coincides with this topic. The title for this article from the American Alliance for retirement planning reads, “Secure Your Income for Happy Retirement.” The article discusses how many Americans expect a happy ending with retirement after having worked for years and years. Unfortunately, this isn’t always the case. Even a big pile of money does not guarantee a secure retirement. One of the biggest concerns people have about retirement is that they won’t have enough income to sustain their current lifestyle or worse, that they could run out of money altogether. The article explains that the way to improve your chances of achieving a secure and satisfying retirement is through retirement income planning, something we do every day.
Here is the thing that matters. Studies show that people who have a protected lifetime income stream tend to be more financially secure than those who don’t. Additionally, people with a protected income have a higher level of satisfaction in retirement. One survey of over 1000 families between the ages of 55-75 reported that respondents said the greatest benefit of having protected lifetime income was financial peace of mind. A protected income is a highly valuable addition to Social Security.
When my mom and dad retired, they had Social Security and a pension. Both Social Security and a pension last your lifetime. If you retire and have all your base income needs satisfied with your pension and Social Security, that provides peace of mind. It’s the three-legged stool that most people don’t have anymore.
People retiring today don’t have a pension. They have Social Security and their 401K. The big challenge today is effectively transitioning from saving money in a 401K, to turning those savings into a stable, predictable income stream that will last your lifetime. If you have a mechanism to create protected income, between that and Social Security, you’re probably going to be happier in retirement.
I’ll never forget a couple I had one time as a young financial adviser. They had a million dollars and as a young adviser, I was excited by such a large amount of money. When I got there, I learned that their million dollars were with TIAA-CREF. The way the school system worked, they didn’t have a pension, they just had their retirement account. They had taken $900,000 of the million dollars and put it into a guaranteed lifetime income stream. I remember feeling bummed they only had $100,000 for me to invest for them, but they were the happiest, most comfortable people I’ve ever seen in retirement. They had no worries, they had a steady income stream coming in, and they could spend comfortably. That’s where you want to be.
Later we’re going to talk about the best ways to create a protected income so you can enjoy the secret to a happy retirement. If you’re wondering how to transition from savings to generating income and you’re recently retired, or planning on retiring in the next few years, I want you to give us a call and get a free Retire Right report. That Retire Right report looks at all five areas of retirement planning. Right is an acronym: R- Risk, I- Income, G- Growth, H- Healthcare, and T-Taxes. If you’re retired or retiring soon, call us so we can look at where you’re at now, and identify easy steps you can take to secure the best possible retirement for yourself.
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