A successful retirement depends on a well-thought-out strategy that helps solve the most challenging problems and find answers to complex questions. It should also reach resolutions to critical decisions and outline the steps necessary to give it the best chances of succeeding through all outcomes. And above all, because no retirement plan is on cruise control, it needs the flexibility to weather the inevitable changes it will face.These are essential components for any retirement plan, but this is only a starting point. A well-rounded plan should (and must) do more to ensure financial security in retirement. Here are ten other things every retirement income plan must accomplish:
Must be Transparent
We are more committed to things we understand. If you don’t grasp the inner workings on a personal level, you won’t have the discipline needed when things don’t go as planned.
Must be Confidence-Building
Lack of confidence in how the plan will support retirement breeds uncertainty, fear and predisposes you to make decisions that are not in your best interest.
Must Define Goals
All plans have goals, and retirement is no different. Without clearly defined goals, you risk falling short of expectations or settling for a subpar retirement lifestyle.
Must Mitigate Timing, Inflation & Longevity Risks
The most well-thought-out goals are at risk unless there is a strategy to protect them from retirement risks.
Must Balance Safe Investments And Equity Exposure
Retirements that rely on exposure to the capital markets to source income must strike a balance between safe and risky investments for stable yet sustainable income.
Must Build a Framework for Investment Discipline
The best investment plan for you is the one you can stick to in the long run. Including strategies that encourage and support discipline is tantamount.
Must Produce Continuous, Safe Monthly Paychecks
It’s income, not wealth, that determines the quality of life in retirement; therefore, a strategy for sourcing a continuous stream of reliable income for as long as required is a must.
Must Achieve a Legacy
Not all spending goals are for day-to-day living or unexpected expenses; passing on assets to future generations is high on many retirees' wish lists.
Must Deliver a Minimally Accepted Lifestyle
A spending strategy must support a baseline monthly income to pay for essentials such as housing, insurance, food, transportation, utilities, and discretionary expenses to maintain a reasonable standard of living.
Must Target Inflation-Adjusted Income
An income stream must account for rising living costs. Otherwise, purchasing power is reduced, savings are depleted, and quality of living is compromised.
There are countless questions to answer and big and small decisions to make to attain a desired retirement lifestyle. While these are undoubtedly important, you cannot drop the ball on some other lesser-known components required for a successful retirement. To ensure you achieve the desired retirement lifestyle, make these ten things a part of your retirement income plan.