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    Income Planning

    Outliving Your Savings

    Individuals approaching retirement generally have one thing that keeps them up at night. They wonder, “Do I have enough value in my 401k or IRA to retire” or “What happens if I outlive my retirement by living too long?” These are both very valid concerns for a retiree.

    Do you have an income plan?

    Your life savings becomes much more important to you when you lose your earned income. Consequently, how you draw income from your life savings is crucial to long-term success. It is as critical as how you invest your life savings.

    Most retirees are drawing one or two major sources of income including Social Security. However, if you need additional income, it has to come from your life savings and that puts tremendous pressure on your nest egg.

    United Safeguard Financial Group utilizes a two-bucket system for your retirement plan. The first is safe money you "live-on" and the second is risk money you "leave-alone." Money in the "leave-alone” bucket is invested for a minimum of five years, and you don’t draw income from this bucket.

    With a proper balance of smart risk investments and safe money accounts, you should be able to maintain a certain withdrawal rate from your safe money bucket and not impact principal over time. You should also have the flexibility to increase distributions periodically to offset inflation.

    Setting Income Amounts

    While retirement is a time of life to be enjoyed, it is very important that you not draw too much from your life savings every year. The amount will vary based on your needs, the amount you have saved, and risk tolerance.

    However, the appropriate mix of investing and withdrawing is essential to maintain long-term financial support. Your risk tolerance plays heavily into the amount your financial plan will allocate each year.

    Tax Efficient Income

    It is important for you to recognize that if you draw income from the wrong place, it can have an adverse effect on your tax return. Most retirees have two types of money – 1. IRA’s, 401(k)’s, or other types of retirement account money. 2. The other type of money are funds not in a retirement account.

    When you look at your retirement account balances, remember that you don't really own all that money because most, if not all of it, has never had income tax paid on it. So, once you pay taxes, you actually keep only a portion of it. How you get the money out of that account is what determines how much income or how much money you get to keep. Any dollar you take out of your retirement account is fully taxable.

    Understanding the tax implications of taking money from various accounts is important when we assist you in structuring your income plan. It could impact your federal income tax, the Tennessee Hall tax, and taxes on Social Security income. Remember, money that shows up on your tax return could add to the taxes on your Social Security income.

    Income in down markets

    How you draw income when the market is down impacts long-term security. You do not want to draw monthly income from accounts going up and down in value; in bad markets, you will compound your losses.

    Therefore, it is essential to have safe monies to draw from through difficult markets. This takes us back to the two-bucket system we use to formulate your unique retirement plan. The safe money you "live-on," and the risk money you "leave-alone".

    Call for a complimentary, no obligation consultation: 800-209-1244

    By contacting us, you may be offered information regarding the purchase of insurance and investment products.

    Your investment advisor is not permitted to offer, and no statement contained herein shall constitute tax or legal advice. You should consult a legal or tax professional on any such matters.

    Any guarantees mentioned are backed by the financial strength and claims paying ability of the issuing insurance company and may be subject to caps, restrictions, fees and surrender charges as described in the annuity contract.

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    John Schnorr has over 17 years of experience designing portfolios to help retirees make more informed decisions to build a strong financial future.
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    The content of this website is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy. Investments and/or investment strategies involve risk including the possible loss of principal. There is no assurance that any investment strategy will achieve its objectives.

    Fiduciary duty extends solely to investment advisory advice and does not extend to other activities such as insurance or broker dealer services. Advisory clients are charged a quarterly fee for assets under management while insurance products pay a commission, which may result in a conflict of interest regarding compensation.

    Investment Advisory Services offered through Brookstone Capital Management, LLC, an SEC Registered Investment Advisor

    *Guarantees provided by insurance products are backed by the claims paying ability of the issuing carrier.

    The 10 Things to Know About Planning Your Retirement Income Report is provided for informational purposes only. It is not intended to provide tax or legal advice. By requesting this report you may be provided with information regarding the purchase of insurance and investment products in the future.