Personal Finance Personal Finance

Investing

Investing

Back to Investing

Retirement Planning: Take an Inventory of Income and Assets

Making sure that your income in retirement is sufficient to cover your expenses is a critical consideration in deciding whether you can afford to make the big transition. It’s wise to split your expenses into needs and wants, with needs being essentials and wants being adjustable.

As you list your sources of income in retirement, you can think of them as coming from two different categories--those that are relatively reliable and consistent (e.g., monthly Social Security benefits and pension payments) and those that are generated by assets you rely on during retirement.

By working with your financial advisor, you will gain a clear understanding of the income sources you will need to retire comfortably. Your total financial picture involves an inventory of reliable income, retirement assets, needs and wants.

In a perfect world, your reliable income would pay for your needs and your retirement assets would finance your wants. However, it’s more likely that you will have to depend on your retirement assets to supplement your needs. Those assets may include a 401(k), IRAs, annuities, brokerage accounts, checking accounts and CDs.

Whatever your specific situation, you’ll want to work with your financial advisor to quantify your reliable income and compile a complete inventory of your income sources--both known sources of reliable income and assets that can be used to supplement income during retirement.

What can your assets provide?

To determine what your assets can provide, you need to take a close look at your overall financial picture, which includes reliable income, retirement assets, needs and wants. Your advisor can help you evaluate and quantify any gaps, and recommend a sustainable withdrawal rate.

Financial advisors generally say that you can reasonably count on withdrawing 4%--with annual adjustments for inflation--of your retirement assets every year without depleting your overall portfolio. Your financial advisor can help you determine how to best structure your specific asset mix to generate sufficient income for your expenses without jeopardizing your long-term outlook. Bear in mind that every retirement plan should allow for unforeseen expenses and emergencies.

Material prepared by Raymond James.


*Diversification does not ensure a profit or protect against a loss. Investments are subject to market risk, including possible loss of principal.
Asset allocation does not ensure a profit or protect against a loss.
There is no assurance any of the trends mentioned will continue in the future.
The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete. Investing involves risk and investors may incur a profit or loss.

 

Article Search

Client Programs

Client Programs

Social Media and Your Personal Security

Tue, Mar. 24 - 11:30 a.m. - 1 p.m.
Pinnacle - Green Hills

Information Security Awareness and Merchant Card Changes

Tue, Mar. 31 - 11:30 a.m. - 1 p.m.
Pinnacle - Mt. Juliet Road
See All Client Programs

Calculators

Calculator

How much mortgage can you afford? Do you have enough insurance? Get answers with these free calculators.

Case Studies

Case Studies

Learn how we've helped our clients purchase dream homes, build their businesses and become successful.

Pinnacle 5 Podcast Series

Pinnacle Podcast

Arm yourself with knowledge on financial topics from the advisors at Pinnacle.