Retirement Income

Retired couple relying on dividends for retirement income

What are the Risks of Relying on Dividends for Retirement Income?

What are the risks of relying on  dividends for retirement income? Like most things used in moderation there isn’t anything wrong with dividends, or the stocks that pay them.  In fact, higher-dividend paying stocks are usually older, established, and strong companies. They can be good components of retirement income plans and help provide some diversification …

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How to protect your portfolio with a variable withdrawal strategy

How to protect your portfolio with a variable withdrawal strategy

One of the key considerations in a retirement income plan is the amount of money that you will withdraw from an investment portfolio. Your decision regarding  how much income to take from your retirement account necessitates that you strike a balance between current consumption and future account value. In simple language, this means that you …

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Man sitting at a table thinking about inflations effect on his portfolio

Inflation’s Effect on Retirement Portfolios

Retirement income is inherently dependent on many different factors. This is true because retirement income planning involves accounting for unpredictable variables over a long time horizon, and weighing them against the comfort level of the individual retiree. Inflation is one of those factors. Even for a given amount of retirement savings, different retirees can have …

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Woman calculating the five year rules

The Five Year Rules of Roth Distributions

Roth IRA’s are one of the most popular retirement accounts. Roth IRAs have many advantages over tax-deferred accounts, namely the ability to provide tax-free growth. The ability to provide tax-free growth is premised on making contributions with after-tax dollars. As I’m sure you are well aware, you must pay taxes on essentially each dollar you …

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morning coffee thinking about a bond ladder

Secure a Minimum Retirement Income with a Bond Ladder

Retirement planning is a comprehensive issue. What I mean by this is that there are a number of sub-components of retirement planning that are pretty distinct from each other. Consider the two broad phases of retirement planning. First is the accumulation phase when the investor sets aside assets as they are earned in order to …

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Required Minimum Distributions

If you save for retirement using tax-deferred accounts then you need to understand the rules surrounding required minimum distributions (RMDs) in order to avoid some pretty steep penalties. For some retirees, the required minimum distribution is less than they would withdraw anyway, and is therefore not much of a planning concern. For others who intend …

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Couple discussing how to maximize retirement income with efficient retirement account withdrawals

Efficient Withdrawals to Maximize Retirement Income

The purpose of accumulating retirement savings with tax-advantaged retirement accounts is to withdraw an income that will last for the duration of your retired lifetime. Considering this could be thirty or forty years, it’s important to get this right. Efficient retirement account withdrawals can help stretch your savings and achieve this goal. Clearly then, you …

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Lady thinking about the 4% rule of retirement income

The 4% Rule of Retirement Income

The most commonly cited method of withdrawing retirement income from an investment portfolio is “the 4% rule”. This rule comes from a very popular study conducted by William Bengen and published in The Journal of Financial Planning in 1994 as Determining Withdrawal Rates Using Historical Data. The short-hand version of the rule, and the basic conclusion …

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sequence of return risk calculation

Sequence of Returns Risk in Retirement

What is sequence of returns risk? We often think of investment return as an average rate over some period, such as 10, 15, or 20 years. This is especially true regarding investment returns within a retirement planning context where the investment horizon is often very long.   Anyone interested enough to be reading this knows that …

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