3 Reasons You Might Want to Rely on the Market First for Early Retirement Income

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

The market may be your first and best source of primary income in retirement.

Here are the 3 reasons you may want to prioritize your market assets as your source of early retirement income:

✅ You Maximize Your Guaranteed Income Sources for Retirement

I often talk about the power of delaying your Social Security Income.

This is a great way to ensure you are maximizing all sources of guaranteed, lifetime income available to you.

This also works well with deferred, income annuities.

Deferral periods often allow you to achieve annual growth rates of 8–11%.

Once these income sources (annuities, pensions, and Social Security) are activated you have essentially locked in that income…

So it’s often best to ensure that you are getting the most retirement income for life (you possibly can).

✅ Take Much Higher Income Withdrawals for Shorter Periods of Time

The 4 percent rules says that you can withdrawal 4% per year in income (if you need it to last for 30 years).

But, if you are only using the market for a short-term income withdrawal you may be able to take in excess of 6–10% per year.

Market or Portfolio income is performance-based with a lot of flexibility (to adjust income withdrawals up or down).

If the market does REALLY well you can consider taking more income that year as a retirement bonus.

This is something to re-assess each year in retirement (which is what I do with clients in my Retirement Income Analysis process).

This ensures you are not only managing the risk of over-withdrawing from your portfolio, while maintain a high degree of flexibility to actually spend the money you worked so hard to accumulate. 🙌

✅ You Can Always Activate Guaranteed Income Early

If the market does much worse than expected you can always activate your lifetime income sources.

This means that you don’t have to withdraw ANY income from the market if you don’t need to (or at least you only have to withdrawal what’s needed to sustain your retirement income target).

Even if you are relying on the market as your primary income source…

You have the flexibility to review the market conditions and decide how much (if any) income to withdraw each year.

But, you also have the freedom to allow your fixed income to continue growing until you are ready to lock in that growth (for the rest of your life).

Even in a worst-case-scenario… Let’s say you spend all of your market assets in the early years of retirement.

You have still protected yourself from ever running out of money by simply turning on all of your income sources.

Let’s Chat 💬😎