Thursday, February 25, 2021

Retirement Planning 101: The Income Trap

What if the biggest risk to your 401k isn’t risk of loss or unknown fees dragging down your returns over time?

What if the biggest risk is you might have to live off of 3 to 4% withdrawals per year in retirement?

If you’re within 10-15 years of retirement and not familiar with the “Safe WIthdrawal Rate”, you should be.  This is the percentage amount Wall Street recommends you withdraw each year to avoid running out of money in retirement.

You’re being told to max out retirement contributions but it’s only half the story.  As you get closer and closer to retirement, the real story is how much income will you generate and how?

Let’s face it, if you’re not retiring with a pension, you need an income plan more than you need a savings plan.  The biggest 401k/IRA asset you accumulate still leaves you stuck surviving off a “safe” 4% withdrawal rate. 

Every $1,000,000 you save would only net you $40,000 a year, and this is before taxes! 

Do the math for your situation.

How much will you need saved to generate the income you need?

Here’s Wall Street’s retirement plan for you.

Save more, work longer, take more risk, or make sacrifices to retire sooner.

Or it's some combination of those options.

Which option do you choose?

None, right?

Hopefully, you’re starting to get the picture.

You see, if you’re within 10 to 15 years of retirement, every dollar you save for your retirement must now be allocated as efficiently as possible to produce as much income as possible.  

Instead of following mainstream financial advice and building the largest 401k or IRA possible in an all market based approach, you should be learning how to create the largest and most predictable income stream for your retirement with the least amount of risk and with as little money as possible.

This means having a retirement plan that is ruthlessly efficient in obtaining the highest and most desired retirement end goal:  Income and as much of it as possible!

Sadly, here’s the reality you'll face when you go to retire unless you get your retirement income conversation started now:  

All your retirement assets in the market is the riskiest retirement strategy you can take unless you know the answers to these 2 questions:

How long will you live?

How much income will you need?

If you don’t know the answers (and who does?), should you really be risking 100% of your retirement on the probability of lasting at least 30 years at a 4% withdrawal rate?

Risk of loss isn’t the biggest threat to your retirement plan.  

The risk of not having enough income each month should be your #1 concern but you’ve been led to believe having the biggest balance sheet is all you’ll need to have a worry free retirement. 


That’s why retirement income planning is on the verge of the biggest changes in over a generation.

Ask any retiree with a pension if they would trade their pension for a 401k.  It’ll never happen!

Fun fact:  people retiring with pensions live longer than those retiring without a pension.

The reason why is simple.  Financial stress and anxiety is eliminated when you know you have more money arriving next month no matter how long you live.

Have you ever noticed the mainstream narrative is to build the biggest asset possible instead of the largest income?  Who benefits from that?  The answer shouldn’t surprise you.

You’ve been told for the longest time to max out your 401k, take the employer match, and you’ll be able to retire with a lot of money.  It’s good advice but only until you realize you still have to figure out how to create the largest income possible which no one ever teaches you how.

Let’s face it, you can’t take your brokerage statements to the grocery store.  Those numbers don’t buy the groceries!  You have to turn it into income first!

So the question that you should be asking yourself is:  How can I generate the largest and most predictable income for ALL years of my life?

Imagine retiring with more income each month and never having to worry about running out of money or that you’ll leave your kids with little to pass on. 

If you’re looking for simplicity, efficiency, levels of guarantees, and leaving a legacy is important to you, we invite you to schedule a strategy session to learn how you can create what we call a “Pension 2.0”.  

We’ll show you how to maximize your retirement nest egg to generate income on average 50% greater than your current retirement plan while still staying invested in the market.

Use the link here to schedule your strategy session:

Thank you,

John Montoya

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