Saving for retirement and living from your savings are two very different challenges.
If you’ve spent most of your life preparing for retirement, you’ve probably become familiar with a simple financial routine:
- Go to work.
- Earn a paycheck.
- Pay your bills.
- Save what you can.
- Repeat, year after year.
For many of us, that routine becomes second nature.
Then one day, retirement arrives. And almost overnight, one of the biggest questions changes from, “How much should I save?” to “How do I replace the paycheck I’ve depended on my entire working life?”
At first glance, it may seem like the answer is simply taking money out of your retirement accounts. But in my experience, it’s rarely that simple.
Retirement Changes the Conversation
One thing I’ve noticed over the years—whether I’m meeting with someone from Brookfield, Racine, Kenosha, or Milwaukee—is that many people spend decades learning how to accumulate wealth, but very little time learning how to turn those savings into dependable retirement income.
I often refer to this as creating stability in your future retirement income.
Instead of counting on a regular paycheck to pay your bills, support your lifestyle, and save for the future, you’re now relying on the assets you’ve spent a lifetime building—and hopefully doing it in the most efficient and coordinated way possible.
In other words, how do you create the highest sustainable retirement “paycheck” possible while making sure it lasts throughout your lifetime?
Simply put, the rules have changed.
Retirement Income Is About More Than One Account
One of the biggest misconceptions I see is that retirement income comes from just one place – whether that’s a 401(k), a pension, or, sadly, in many cases, Social Security alone.
In reality, retirement income often comes from several different sources working together, including Social Security, retirement accounts such as IRAs or 401(k)s, investment accounts, cash reserves, and for some families, pensions. There are also situations where financial tools designed to help provide dependable lifetime income may have an appropriate role.
Every retirement looks a little different because every family has different goals, resources, and priorities.
That’s why we don’t believe retirement income planning starts with asking, “Which product should I use?”
Instead, I believe the better question is, “What am I trying to accomplish?”
It’s Not Just About What You Have
One thing I often remind clients is that retirement isn’t simply about how much you’ve accumulated. It’s also about how efficiently those assets can work for you.
Two families may have very similar retirement savings yet experience very different retirements because they make different decisions about income, taxes, investments, Social Security, and risk.
Sometimes, it’s just a function of where they live and what the cost of living is in those areas.
A client living in rural Wisconsin, for example, may enjoy a much more comfortable lifestyle because the demands on their retirement income aren’t as great as those of another client living in Chicago or another large metropolitan area.
That’s why retirement income planning isn’t simply about taking withdrawals.
It’s about coordinating all of those factors and decisions so they work together.
Confidence Comes From More Than Just Having Savings
One of the biggest shifts people experience in retirement is realizing that building wealth and living from it require two very different strategies.
Accumulating assets is certainly important, but so is understanding how those assets can work together to provide dependable income throughout retirement.
That’s where confidence begins.
Not because you have all the answers, but because you have a coordinated plan for one of the biggest financial transitions of your life.
A Different Question to Consider
Instead of asking,
“How much can I withdraw from my retirement accounts?”,
you may want to ask:
“Do I have a coordinated income strategy that brings together all of my income sources, when I’ll claim Social Security, which accounts I’ll draw from first, and the tax decisions that can affect my retirement—so I can enjoy the lifestyle I want with confidence that my income can last?”
There’s an important difference.
Continue Your Retirement Journey
If today’s article gave you a different perspective on retirement, we’d love to help you take the next step.
Watch our Complimentary Presentation, “The Retirement Confidence Roadmap”
Discover how retirement income, investments, taxes, healthcare planning, and other important financial decisions work together to help create greater retirement confidence
OR
Schedule Your Complimentary Assessment
If you’d rather begin with a conversation, we’d be happy to answer your questions during a complimentary Introductory Conversation.
