| Don’t Let Your Paycheck Stop Once You Retire by Robin Young |
Turning a retirement nest egg into a monthly “paycheck” is one of the biggest challenges facing retirees. Your retirement planning strategy should include
creating a lifetime stream of income that you can’t outlive. This process of creating a paycheck from investments reduces stress and allows you to focus on
enjoying life in retirement.
A recent industry survey showed that retirees with a pension were one third more satisfied with their retirement than those without and felt more in control of their
financial future. This is not a new concept but has become more imperative with recent market declines and volatility.
The first step is to determine your retirement income need. You can predict certain fixed costs, such as housing, taxes and insurance. As for discretionary
spending, perhaps you’d like to travel and buy a new car every five years. Creating a budget helps people focus on priorities.
Another critical factor is whether your portfolio will last your lifetime at that spending level. Many studies show that you can safely withdraw at a rate of 4-5% of the
total investment portfolio each year and there are many retirement calculators online that you can use online but it is strongly recommended that you get a second
opinion. Results vary greatly with assumptions on taxes, investment returns, inflation rates, and life expectancy.
Once you are comfortable with your retirement income amount, the final step is to build a cash reserve of 5-7 years of retirement income into your overall
investment plan. There are volumes written on the subject of asset allocation and it’s strongly suggested that you consult a Certified Financial Planner when
creating one. Your fixed income or income portfolio should be invested in “safe” vehicles such as CD’s, bonds, bond mutual funds and savings accounts. This
reserve will help alleviate the need to sell out of the stock portion of your portfolio at the worst possible time, during a market downturn.
Once you have a plan to turn your portfolio into a retirement “paycheck”, you can relax and enjoy your summer!
Robin Young CFP®, Registered Life Planner and owner of Northstar Financial Planning, Inc. in Londonderry, NH, a Fee-only Financial Life Planning and Wealth
Management firm. Visit www.northstarfp.com or contact Robin at 603.216.9226
creating a lifetime stream of income that you can’t outlive. This process of creating a paycheck from investments reduces stress and allows you to focus on
enjoying life in retirement.
A recent industry survey showed that retirees with a pension were one third more satisfied with their retirement than those without and felt more in control of their
financial future. This is not a new concept but has become more imperative with recent market declines and volatility.
The first step is to determine your retirement income need. You can predict certain fixed costs, such as housing, taxes and insurance. As for discretionary
spending, perhaps you’d like to travel and buy a new car every five years. Creating a budget helps people focus on priorities.
Another critical factor is whether your portfolio will last your lifetime at that spending level. Many studies show that you can safely withdraw at a rate of 4-5% of the
total investment portfolio each year and there are many retirement calculators online that you can use online but it is strongly recommended that you get a second
opinion. Results vary greatly with assumptions on taxes, investment returns, inflation rates, and life expectancy.
Once you are comfortable with your retirement income amount, the final step is to build a cash reserve of 5-7 years of retirement income into your overall
investment plan. There are volumes written on the subject of asset allocation and it’s strongly suggested that you consult a Certified Financial Planner when
creating one. Your fixed income or income portfolio should be invested in “safe” vehicles such as CD’s, bonds, bond mutual funds and savings accounts. This
reserve will help alleviate the need to sell out of the stock portion of your portfolio at the worst possible time, during a market downturn.
Once you have a plan to turn your portfolio into a retirement “paycheck”, you can relax and enjoy your summer!
Robin Young CFP®, Registered Life Planner and owner of Northstar Financial Planning, Inc. in Londonderry, NH, a Fee-only Financial Life Planning and Wealth
Management firm. Visit www.northstarfp.com or contact Robin at 603.216.9226
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applaud local women. The core of the magazine is our inspirational women's articles, most of which feature local women but occasionally we are
able to interview national women who we feel provide a unique inspiration for our readers. Our other articles cover topics of interest such as food
recipes, home, garden, beauty, health, fashion, dating, parenting, seniors, finance, business, hair care, skin care, advice, real estate, insurance,
weddings etc. Each issue has a feature section as well. Many of our articles are written by local business people who provide information
relevant to their business expertise. The Applaud Women website is also a resource center for local women including the most comprehensive
listings of Restaurants, Weddings, Female doctors and Hotels. It also includes a number of informational pages with links, articles and RSS feeds
to both local and national websites of interest to women in NH & n. MA.
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