Rethinking65

Retirement income planning is not a yield-chasing game. I was pleased to write this piece for @rethinking65 on a topic I spend a lot of time discussing with clients approaching or living in retirement. Too often, the retirement-income conversation starts with, “What investment should we buy to generate income?” I think it should start somewhere else: How much income do you actually need, where should it come from, and what return does your financial plan require to make it work? From there, the conversation becomes much broader than yield. It includes taxes, inflation, sequence-of-returns risk, liquidity, Social Security, portfolio growth and longevity. One point I make in the article that I think is particularly important: being too conservative in retirement can create its own risk. At 3% inflation, a lifestyle that costs $10,000 per month today costs more than $24,000 per month 30 years from now. Retirees still need growth. I also discuss our approach to bucketing, creating a “retirement paycheck,” tax-efficient withdrawals and what I call Planning for Retirement the R.I.T.E. Way® — Retirement Income Taxed Efficiently. rethinking65.com/retirement-…