For a sustainable retirement income, you need these 5 building blocks

Sometimes we have all the elements for a great retirement, but until we put them together the right way, we don’t get the result we want.

I call it the H2O problem. We have a lot of oxygen in the atmosphere. Similarly, hydrogen. It seems simple, but until two hydrogen atoms are combined with one oxygen, we will never obtain water.

When planning for retirement income, it’s risky to wait for the right mix of elements to come together on their own. They don’t just snap into place; you have to know what each can do and put them together in a way that produces a whole greater than the sum of the parts.

You can sit down with financial advisors who can outline all of the elements necessary for a successful retirement, but they may not offer all of those elements in their own retirement planning practice. Perhaps it is due to regulatory or business model considerations. And even when all of these elements are available, the advisor may not know how to assemble them.

Is not easy. Retirement income requires consideration of many more elements than just the two needed to create water (H2O) and many more combinations, such as 50 trillion. Literally.

The requirements of a retirement income plan

As a starting point, your plan should consist of entry: Starting income to meet your current needs, growing income to help offset inflation, lifetime income so you don’t run out of income, and less volatile income so you feel secure.

But most investors have additional concerns, such as a legacy they want to pass on to their children and grandchildren, and the availability of liquid funds in case of unexpected needs or emergencies. They may also want the plan to be convenient and easy to administer, with regular monthly income payments, and flexibility so the plan can adapt to changing circumstances or economic conditions.

And the elements of the plan must be easily understandable, offered by highly qualified, low-cost and tax-efficient companies. Bottom line: Focus on the plan and make the elements as tested as possible.

Identify the elements of a successful plan for retirement income

Just like in chemistry class reviewing the periodic table, go through the list of financial products available to investors like you and select the ones that make sense. Or ask your advisors for their list.

Here’s our list of retirement plan items (including the most likely source of savings):

  • P.S: High-dividend stock portfolio (invested from personal savings)
  • IAN: Income annuity with guaranteed payments from now on (invested from personal savings whenever possible)
  • FP: Fixed Income Bond Portfolio (invested from personal savings)
  • IAF: Income annuity with guaranteed payments from future dates you select (invested from personal savings and IRA rollover)
  • PB: Portfolio balanced between growth stocks and fixed income securities (invested from rollover IRA as a source of withdrawals)

Here is an image of what the elements would look like if you were creating a retirement molecule.

Putting the Elements Together

As a composite, your plan might look something like PD3IAN4PF1IAF2PB4. However, and this is the hard part, unlike this jumble of elements, the compound he has designed must be designed to be able to change shape over time and continue throughout its life.

The bar chart below demonstrates the income these items produce when combined with the Go2Income scheduling algorithm. Consider how each item contributes different amounts at different times in your life. Of course, the portfolios will provide income based on the planning assumptions, while the annuity payments are guaranteed* and serve as the basis for the plan.

A bar chart breaks down the sources of income for a 70- to 100-year-old retiree between a balanced portfolio, a high-dividend portfolio, a fixed-income portfolio, annuities (deferred), and annuities (immediate).

Results of your plan

To evaluate your plan, see if it meets your income requirements: starting income to meet your current needs, growing income to help offset inflation, lifetime income so you don’t run out of income, and less volatile income so you feel comfortable. sure. And also look at your legacy and liquidity goals.

Unlike H2O, there is virtually an infinite set of possible combinations to suit your personal goals and circumstances.

Ultimately, creating a successful plan will allow you to:

  1. Use the basic elements in the most effective and efficient way
  2. Create a plan that combines the right mix of elements
  3. Customize the mix to meet your goals

If you’re interested in working on your own “chemistry” project, visit Revenue Allocation Planning at Go2Income. We’ll ask you a few easy questions so you can design a plan that meets your goals.

* The guarantees are subject to the insurer’s ability to pay claims.

President, Golden Retirement Advisors Inc.

Jerry Golden is the founder and CEO of Golden Retirement Advisors Inc. He specializes in helping consumers create retirement plans that provide income they can’t live without. He learns more at, where consumers can explore all kinds of annuity options, anonymously and at no cost.

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