In Retirement

Your journey hasn’t ended. You are just starting a new path.

In the accumulation phase of our lives we work and save as much as we can so that we are able to slow down or stop working altogether and do what we want to do, when we want to do it.  In “retirement” which is the distribution phase of our lives, however you choose to define it, our goal is to either partially or fully replace the income we earned while working with other sources of funds that should be reliable and sustainable. 

Many retirees, particularly those that retired in prior decades, believed the most appropriate approach to the retirement income conundrum was to collect their company pension and put their savings in certificates of deposit, or government or corporate bonds so they could live off the interest and never touch their principal.  Pensions are virtually a thing of the past, and that approach with savings and bonds may not work in a low interest rate environment or at a time when inflation is problematic.  Many retirees are instead turning to an approach where they invest according to their risk tolerance and goals, and withdraw a certain percentage of their savings in the form of dividends, interest or principal.   

Depending on your assets, income, goals, time frame, and risk tolerance, it may be prudent to diversify your retirement income sources so that if any one income source falters or fails, you have other sources of income that can continue to work for you.  Your sources of income in retirement may include some combination of Social Security benefits, retirement accounts such as a 401(k) or IRA, savings and investment accounts that you’ve paid taxes on along the way, pensions, annuities, your home equity,  part time employment, real estate rental property, royalties, and inheritance.  Ideally those sources of income will come together to provide you a relatively high level of confidence that you can sustain your spending through your lifetime, manage all of your financial goals, and not outlive your money.  Placer Summit Financial Group’s professionals can help you put together a plan for income in your retirement.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio.  Diversification does not protect against market risk.

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