Do You Have a Retirement Plan or a Lifetime Income Plan?
Do you have a retirement plan, or do you have an income for life plan? The difference between the two plans is significant. You may have a retirement plan, but you might not have a lifetime income plan.
Individual (e.g. IRA, Roth IRA) or employer sponsored retirement plans (e.g.401(k), 403(b)) are designed to help investors save and accumulate funds for their future needs in retirement. Investors can have multiple retirement accounts. Investors can also use non-retirement accounts to save for the future. Retirement accounts typically have tax advantages over non-retirement accounts. Taxes on retirement accounts and other savings vehicles vary, and understanding those implications is essential to maximizing your investments and proactively managing your current and future taxes. *
Income for life planning focuses on creating a sustainable inflation-adjusted income throughout your life. It integrates multiple streams of income using the time segmentation approach. Instead of treating all assets as a single pool, assets are strategically divided into less volatile investments to cover near-term income needs and riskier, growth-oriented investments to generate income much further into the future. Less volatile investments include income annuities. An income annuity is a retirement product designed to create a stream of guaranteed income for a certain period or for a lifetime.
Income for life plans are designed to provide a long-term guaranteed, steady stream of income (or guaranteed multiple streams of income taken strategically over an investor’s life). These plans mitigate risks like market volatility, inflation, and outliving savings, and provide long-term financial security. Income for life plans often allow for growth potential while ensuring steady, sustainable income payments even during market downturns. Guaranteed, multi-stream income strategies involve diversifying assets and creating a "pension-type" cash flow that can last a lifetime.
Life-cycle approach to investing involves adjusting your portfolio to align with your changing financial needs, risk tolerances, and other important factors as you move through different life stages. These plans are dynamic and flexible, and incorporate risk management strategies. They follow your personal and professional growth and your life expansion.
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*This article does not provide financial, insurance, legal, or tax advice and should not be relied upon as a basis for investment decisions. The information contained in this article is not designed to meet the specific needs of individual investors. Consult with your financial or tax advisor concerning your own individual situation. You may also call 310.256.4881 or email info@wmsguide.com to schedule a personalized counseling session.