Let’s consider Joe Walker, a 55-year-old engineer who has worked 30 years in the same industry. Month after month, he received a solid paycheck and supported his family in a comfortable lifestyle. He diligently contributed to a retirement plan year after year but harbors a deep-rooted fear that once his paycheck stops in retirement, will his lifestyle have to change to reflect a much lower cash flow?
Many people worry that once they retire, the stability of their paycheck will not be fully replaced by retirement plan income or savings. If Joe has persisted in contributing to his retirement plan, with or without a generous employer match, his fear is largely unfounded. The real question is, how does he convert his retirement assets into equivalent monthly income?
Maintaining Your Income and Your Lifestyle
At Isakov Planning Group, ensuring this retirement income flow is our number 1 priority. People like Joe may be surprised about the options we can use to reach this goal. The key is being able to discuss this mindset with Joe at the optimal time. Ideally, we’d like to speak to Joe within 5 to 10 years of retirement, and work to design a portfolio that will generate reliable income.
This often involves a rebalancing of investments from a growth priority to an income priority approach, mostly through the use of dependable dividend-bearing equities. That allows investors the choice of cashing in those dividends as income or reinvesting them to enhance growth.
If the principal is large enough by the retirement date, the dividend income it generates can entirely replace the person’s paycheck. From experience, this approach has been very successful for our clients in assuring them of a reliable stream of retirement income that fully replaces their paycheck while employed and allows them to continue living the lifestyle they desire.
Actually achieving this goal is in some ways easier than convincing folks like Joe Walker that this will be the case!
If you know someone who is 5 to 10 years away from retirement age and who is fretting about their ability to replace that monthly cash flow they now receive from their employer, refer them to us at Isakov Planning Group, for a free, no-obligation consultation.