If you’re like most retirement savers, you scour your statements each month or quarter and pay hawk-like attention to the balance of your retirement accounts. Ideally, you want to see that balance increase regularly. In the months that it does, maybe you calmly allow yourself to dream about your ideal retirement. In the months that it doesn’t, maybe you fret a little bit more about the future and spend less money in the present.
The trouble with living this way isn’t just that it’s stressful and unfulfilling, it’s also shortsighted. You see, by focusing only on the way your balance increases, you’re distracting yourself from something much more important: your potential income after retirement.
A savings—no matter how large it’s grown—does not guarantee you any sort of regular income after you stop working. In fact, your savings can be drained quickly by a never-ending stream of costs including: medical expenses, non-medical assistance, home repairs and lifestyle expense increases caused by inflation. It can also be negatively impacted by market downturns if you aren’t careful about where you invest.
Be too careful, however, and your growth will slow so much your savings won’t have a ghost of a chance of keeping up with inflation. It’s a lot to think about it and for many, it’s downright scary.
Think about it this way: let’s say your employer gave you a full year’s salary on January 1st each year. It sounds great—you’d have that money sitting there, ready for any expenses that come your way. But how long do you really think it would last? Do you think you’d stay disciplined and dole out an equal amount each week for 52 weeks leaving the rest untouched? Or do you think it’s possible you might overspend; throwing cash at every situation that arises, and have no money left by August?
Income, on the other hand, is different. If you can create a never-ending income stream during your retirement, you gain the ability to relax while securing your lifestyle, savings principal and property.
With a little knowledge, you can get ahead of the curve and create a future income that covers your expenses while also securing your comfort, peace of mind and wellbeing throughout the rest of your life.
The INCOME MATTERS series will help you understand why setting up a lasting, predictable post-retirement income matters more than accumulating savings. You’ll discover the benefits and drawbacks of many traditional savings and investment vehicles as well as how to protect your assets from risk. Finally, you’ll discover ways to create a reliable income that lasts for life while also maximizing your Social Security.