4 Reasons to Market-Proof Your Retirement Income

(don’t forget to checkout the video of this blog too)

(Almost) Everybody already has one source of guaranteed, lifetime income that is market-proof…

It’s your Social Security Income.

This income source is incredibly valuable because it is completely unaffected by the ups-and-downs of the market.

Now that doesn’t mean you should avoid the market completely leading into retirement…

You should always have some of your wealth invested in the market (even in retirement) for its long-term growth & inflation-protection abilities.

But, there are 4 reason you should strongly consider market-proofing the majority of your fixed retirement income:

✅ You eliminate sequence-of-return risk

Moving your the bulk of your retirement income out of the market eliminates the risk of “bad luck” forcing your retirement date to be pushed back (a situation nobody wants to be forced to deal with).

If the market drops a few years just before your retirement…

or in the first few years of your retirement…

It can devastate your retirement plan.

If your nest-egg takes a large enough hit you won’t have a large enough balance to generate enough lifetime income to secure your retirement.

This is a huge risk that often goes unaccounted for.

And there’s really no way to predict what the market is going to do; it could simply be bad luck that puts your entire retirement plan in jeopardy!

✅ You can take much higher income withdrawals than 4% per year

The volatility in the market is GREAT for long-term growth potential.

But it becomes VERY inefficient when you start to take income withdrawals.

That’s where The 4% Rule came from.

It takes into account the market volatility, giving you a very low income withdrawal in retirement (to ensure your money lasts).

But, there are better ways to raise your withdrawal rate very significantly (plus provide a stream of income that is contractually guaranteed for life).

✅ You Can Keep More Money in the Market (invested for more aggressive growth)

Taking a large portion of your retirement income out of the market allows for higher income withdrawals (leveraging the actuarial risk-pooling strength of an insurance company).

It also provides an added degree of safety to your overall retirement plan.

This also means that because your income is independent of the market, more of your remaining wealth can STAY INVESTED in the market…

And not only can your money stay invested, but it can stay invested with more growth potential (since you aren’t relying on it as your primary source of retirement income).

✅ The Market Will No Longer Dictate Your Retirement Date

Not only do you have less stress in retirement knowing that your income is contractually guaranteed…

But, you also are not susceptible to the market dictating your retirement date!

You can plan for retirement much easier knowing EXACTLY how much income you will have…

Allowing you to know EXACTLY the date you plan to hang up your hat. 🧢

Let’s Chat 💬😎