Do you have an income plan for retirement?

By Hally M Dunn, MBA

August 19, 2015

If you are age 50 or over, it’s time to take an in-depth look into your financial picture and determine how you can live comfortably during your retirement. There are three important areas I take into consideration when designing a income plan for your retirement:

  1. How much savings there is now?
  2. How will inflation affect those savings?
  3. How long will the income from savings last?

Will you need to defer certain expenditures to ensure you can retire comfortably for the rest of your life?

Finding the right amount of income that needs to be generated from a savings plan is key. I use a retirement income analysis as the ground work in building an income plan for my clients’ retirement years. If there is a need to increase savings, we focus first on where to beef up the plan, such as tax deferred 401(k) and IRA portfolios, and then factor in other savings and investments.

It is also very important to find out if your income will keep up with increasing prices. If you were 20 years old in 1980, how much did you pay for your first car? Costs sure have changed since the 80s. In order to retire securely, we need to factor for greater income over time and account for things costing more.

In my practice, I have seen clients living well into their 90s and even beyond 100 years old! If relying on investments to provide much of your income is just a “general plan", now is the time to work together to make sure your money grows enough to provide income for a comfortable life into your 90s or beyond. And what happens if you do run out of money? None of us want to trade an independent lifestyle for a lifestyle dependent on our children.

Another area to focus on is how much income you want when you retire and how much you’ll need to save to get there. Perhaps many of your expenses have decreased, such as having a mortgage, credit cards and cars paid off. Living on less income than you have, for example at age 60, may be practical. Some factors to consider for your retirement plan are:

  • Current income
  • Living on the same amount of income
  • Decreasing income needs

Start planning when you have a number of years before retirement and I recommend updating the plan over time to take into account various life changes. As part of your planning, keep in mind deadlines as described by this article in US News and World Report. Let’s get together and start planning the lifestyle you would like to lead during your retirement years.

Email Hally if you need guidance.


This article was featured in 4SIGHT. Sign up free to receive 4SIGHT, our monthly newsletter of helpful financial articles, tips, events, and monthly IRS deadlines. 



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