3 Reasons Why 40% of Your Retirement Money Should NOT Be Used For Fixed Income

(don’t forget to checkout the video too)

I talk frequently about leveraging an insurance company for guaranteed income in retirement.

And typically, if you take approximately 60% of your retirement portfolio you can generate the same amount of income you could leaving 100% in the market (plus leave yourself almost 40% more liquidity).

Plus you gain a contractual guarantee that ensures you can never outlive that income stream.

But, you do NOT want to use all of your money to created fixed income in retirement.

Fixed income gives you stability, but it limits your flexibility in retirement.

That’s why I often recommend keeping about 40% of your retirement assets flexible and available in retirement.

There are 3 main reasons for this

✅ You don’t need to invest in “preservation mode” anymore

If you’ve used 60% of your assets to create guaranteed income, you no longer need to keep the remaining 40% in “preservation mode”.

This means you now have the freedom to invest as aggressively as you would like, because you are no longer worried about the sequence-of-return risk (or the risk of your retirement income being negatively affected by a downturn in the market).

✅ You have WAY MORE liquidity than you would using the market for income

By using an insurance company for the income portion of your retirement you have freed up almost half of your retirement assets to use however you would like it retirement…

If you want to take $100k out for a dream vacation, you can do it (and it will not negatively affect your retirement income).

✅ Money available for opportunities in retirement

Just because you’re retired, doesn’t mean opportunities won’t popup.

By having almost almost half your retirement assets available, you still have the opportunity to capitalize on investment opportunities in retirement (or other types of opportunities as well).

Maybe a great real estate opportunity presents itself, or you’re able to help fund your daughter’s new start up…

The point is that having guaranteed income through an insurance company not only allows you to leverage your assets for more income it also frees up your other assets for opportunities without risking the security of your retirement plan.

Let’s chat 💬😎