If Step 1 of retirement planning is to calculate current spending levels in order to decide future retirement savings needs, Step 2 is planning future cash flow. Retirement income sources can be varied, but the three primary channels are Social Security payments, defined benefit pension income, and investment portfolio withdrawals.
- Social Security Income
Social Security income is reliable for retirees, but it’s also fairly limited. The more money you earn before retirement, the less your total wage-replacement percentage will be through Social Security based on government limitations, etc. So, while this is a good source to count on, it shouldn’t be the only source you’re counting on.
- Traditional Pensions
Many companies offer pensions, but they aren’t as prevalent as they use to be. Stay informed about what your company offers before you begin to near retirement, and consider looking into a larger regional pension provider, like the University of Missouri or the state of Missouri.
- Personal Portfolio
If you’re planning on using your personal portfolio as your main income stream during retirement, you should be planning your investments accordingly well in advance.
You can read more about how to plan for retirement cash flow in Tim Sullivan’s article, “Retirees should be planning for future cash flow,” in the Columbia Daily Tribune.
As a financial planner specializing in comprehensive financial planning, Tim enjoys helping clients in Columbia, MO with managing their taxes, financial risks and other financial issues.
If you would like to learn more about this and other personal financial planning topics serviced by Clarity Financial please contact us at 573-447-7007. Clarity Financial, LLC is a fee-only financial advisory firm in Columbia, MO. Appointments are welcome and initial consultations are free.
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This article is the property of Clarity Financial LLC.
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