What is Income Planning?
Income planning is a meticulous process that ensures you have a consistent and reliable stream of income throughout your retirement years. As you transition from a regular paycheck to relying on various income sources, such as Social Security, pensions, and withdrawals from investment accounts, it becomes crucial to strategize how and when to access these funds. The goal is to ensure that your retirement savings last, covering both essential and discretionary expenses, while also accounting for the unpredictable nature of market fluctuations and life events.
Why is Income Planning Important?
The shift from wealth accumulation to wealth distribution is a significant one. Without a well-thought-out income plan, there’s a risk of outliving your savings. Moreover, retirement can span decades, and during this time, various factors like inflation, healthcare costs, and market volatilities can erode your purchasing power. By planning your income streams, you can address these challenges head-on, ensuring that you maintain your desired lifestyle throughout retirement.
How Does Great Lakes Benefits and Wealth Management Approach Income Planning?
Our approach to income planning is comprehensive and tailored:
- Assessing Long-Term Income Needs: We begin by understanding your anticipated expenses in retirement, segregating them into essential and discretionary categories. This helps in ensuring that your basic needs are always met, while also allowing for lifestyle enhancements like travel and hobbies.
- Identifying Income Sources: We evaluate all potential income streams, from Social Security to pensions and investment withdrawals. Our focus is on optimizing these sources to ensure tax efficiency and sustainability.
- Portfolio Re-positioning: As you near retirement, the emphasis shifts from wealth accumulation to income generation. We adjust your portfolio to reflect this change, ensuring it’s aligned with your risk tolerance and income needs.
- Establishing a Withdrawal Strategy: We craft a strategic withdrawal plan, ensuring that you access your funds in a manner that maximizes their longevity while meeting your financial needs.