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5 Pillars of Retirement Planning — Income

The retirement you want takes careful planning. We believe one of the five pillars of a healthy retirement plan is creating multiple streams of income for your retirement.

It’s vital to have multiple streams of income you can rely on when you’re no longer working. If you don’t plan for multiple retirement incomes, you’ll only be depending on one income stream in retirement. What happens if that income stream fails or goes away? How would you survive in retirement if you lost that income?

That’s why we plan for multiple income streams in all of the retirement plans we design. We don’t want you to end up in a bad spot during retirement just because your sole income stream went away.

But even if you do have multiple income streams, some of those streams will be more reliable than others. It’s the nature of how money works. You may have a pension you can depend on throughout the rest of your life (if so, you’re one of the lucky ones). But that pension probably isn’t enough to live on for the rest of your life in light of inflation and rising cost of living. So you’ll want to draw from Social Security.

But what if that’s not enough? Many of our clients find that even with a pension (if they have one) and Social Security income, they won’t be able to keep up the standard of living they’re used to. They might be able to get by in retirement, but it’s very unlikely they’ll be able to thrive.

This is where IRAs, 401(k), and Roth accounts come into play. It’s likely you’re familiar with one or more of these accounts. The key is to diversify your money between these accounts. That way you’ll have some income coming from your pre-tax accounts and your post-tax accounts. Even more importantly, you’ll want to diversify your investments inside each of these accounts as much as possible. That means you’ll have some accounts with higher risk, some with conservative risk, and some with moderate risk.

Best-case scenario, you’ve got income coming from four or five different streams, each with a different level of risk, reward, and dependability. We do retirement planning like this so no matter what happens to one or more of your income streams, you’ll still have other income to depend on.

Striking that balance is hard, which is why our financial professionals can help you analyze your income plan to make sure you’re on track to retire!

If you want to hear about the other four pillars of retirement, click below to schedule an appointment with one of our advisors!

5 Pillars of Retirement

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