Retirement Income Thoughts

 

As an Estate Planner and licensed Life and Health Insurance Agent, the topic of retirement income often comes up.  The idea of having a single dollar amount retirement "nest egg" started bothering me.  I couldn't figure out why.

Then I realized, looking at retirement funding in a single dollar amount is a bit backward.

We spend most of our working lives looking at our month to month and year to year streams of income.  Why do we view retirement any different?  Why do we think we need some massive amount of money out there to feel "secure" when we simply don't. 

What we need are "streams of income".  Just like in our working lives, we need streams of income in our retirement years. So, stop stressing out about the overall value of your retirement account.  Figure out what streams of income suit you best. 

So, here are some ideas:

• Rental Property - I'm a huge fan of rental property.  If you are in an area that is not dying, this will always be in demand.  I like my rental property all within one area.  I once met a man who got up every morning and drove his tractor to his rental properties down the street.  He could look over them daily, make sure they were in good repair, and that everyone was behaving appropriately.  When it came to taxes and zoning, he dealt with the same people, as opposed to the properties being spread out and his having to deal with different counties, different zoning, etc.  That was a good plan. Also, this can either be professionally managed or self-managed.  It's up to you. 
• Annuities - These are effectively the opposite of Life Insurance.  You feed in a certain amount of money and then they create streams of income over a lifetime.  They can be guaranteed over a lifetime.  They come with guarantees that investment accounts simply can't offer. 
• Social Security (US) - While living solely off Social Security is not the goal, it's nice to know that so long as you have worked a certain amount of time in your life, there's something out there for you.  I do not have any concern that Social Security is going away.  It will have to change, but I don't see it going away.
• Employment - Stop gasping at the idea of employment in your Senior Years.  While the idea of taking a vacation for the remainder of your life is appealing while you work, many retirees start getting "stir crazy" after an extended period of leisure time.  Employment during your Senior Years can help you stay active and give you a sense of worth.  Also, you can find yourself able to take on tasks that are fulfilling, not just profitable.  The one word of caution is to talk with someone, either a tax professional or well equipped financial adviser as to the tax implications.
• Investment Accounts - managed well, these can be helpful.  However, they can also be like a trip to the casino.  I do not believe they should be the basket in which all your eggs are found. You may wake up one day and find a hole in the bottom of it. 

So, take a deep breath and relax.  If your "retirement" is not where you want it to be, maybe that's because your perspective was off a bit.  Find your streams and enjoy your retirement.