The number one fear in retirement planning is running out of money. Once you have a handle on your income sources and expenses, you can determine if there’s an income gap – a shortfall between your living expenses and your guaranteed income sources. For example, if you have a retirement budget of $5000/month and Social Security/Pension Income of $4000/month, your income gap is $1000/month.
If there is a gap, there are many questions to consider. Do you need to reduce expenses, increase income or a combination of both? Lowering expenses might include refinancing your mortgage if interest rates have dropped, reducing your housing costs by moving to a less expensive home, consolidating your credit card debt, and more. Increasing income might mean deciding to stay in the workforce longer than you had planned – or, if you’re covered by a pension plan at work, retiring and then seeking employment elsewhere, allowing you to receive a salary and your pension benefit at the same time.
Other questions to ask might include: Which investments or assets should you draw on, and in what order? How much can you withdraw from your portfolio without running out of money? Can your income keep up with inflation? What happens to income with the death of a spouse?
We’ll call on our expertise in income gap planning to find the right solutions to your unique income gap challenges … and help you plan the most effective way to ensure a brighter retirement outlook.