The number one request people are making now from financial advisors is how to get more retirement income. Regardless of whether they are far from retiring or already retired they want to be sure they will have ENOUGH income to meet their spending needs in retirement. They simply do not want to run out of money before they run out of breath.

There is no magic formula or silver bullet to get the retirement income you need. There are, however, several strategies that can help make your success much more probable. During difficult times such as we are undergoing now, it is necessary to be creative and seek retirement solutions from a broader range of strategies than required in the past. As retirement experts for many years we have learned how to adapt retirement income strategies to the times. We do offer a Free Retirement Screening to help you to see where you stand.

The first thing you need to understand is that in retirement the single most important factor is how much money you need or want to spend. It is also the only factor that is totally under your own control. The second thing you need to understand is the difference between income and spendable cash. “Income” is essentially an accounting or taxation concept. For example, if you receive a gift of $1,000 it is not technically income, but it is spendable cash. If you earn $1,000, it is income and only the take-home pay is spendable cash. Similarly if you have dividends reinvested, that is still taxable income, but it is not spendable cash until you liquidate shares.

So it is important to understand that the only thing you can spend is cold hard cash. Whether you get it from earnings, investments, pensions, gifts, sale of property or borrowing, you can only spend the net amount. The retirement picture becomes much clearer when you think in terms of cash to spend to meet your needs and quit thinking about “yield”. In today’s markets, yield simply will not make it for most people. It takes an open mind and the willingness to think strategically to develop a workable retirement income strategy:

• The first step is to get out of debt! The only good debt is debt that produces profit. So, owing on a profitable rental property is fine. The only other acceptable debt is a mortgage on your principal home and then only if it is not a burdensome load on your retirement cash flow. Other debt is an indication of overspending and it will sap the life out of your retirement.
• The second step is to get your retirement spending defined and under control. While we do not subscribe to the theory that there is such a thing as a “safe” withdrawal rate from retirement funds, we know there are unsafe rates. If you need to take 8% annually from your retirement accounts to meet you spending needs, the probabilities are extremely high that you will deplete them during your lifetime. If you do not know where your money goes, you will never know where it went when it is gone.
• Once you have clearly determined how much you will need to spend, the third step is to assemble an accurate picture of all the resources you have that might help you obtain the cash you will need over the coming years.
• The fourth step is to evaluate all the viable strategies to deploy your resources in the most effective way to obtain as much of the desired cash flow as possible without assuming undue risk.
  A few examples:
  • Converting unproductive assets into productive assets
  • Utilizing total return investment strategies
  • Employing tax efficient distribution strategies
• The final step is to review all the alternatives strategies to help meet a shortfall or to adapt to changing circumstances.
  A few examples:
  • Adjusting discretionary spending
  • Making lifestyle changes
  • Sale of assets

If this sounds like a lot of work, it is. Retirement is not just a plan, a program, a project or a process. It is how you will spend the rest of your life and how your family will live as well. It deserves a lot of your time effort and commitment to succeed. In retirement, failure is just not an acceptable option.