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Retirement Income Planning

Client Centered

Two phases - one strategy.

When it comes to retirement planning, people often spend a lot of time thinking about the best way to increase their savings—but less time thinking about the best way to withdraw those savings when the time comes. 

The reality is that there are two phases to our financial lives – the accumulation phase and the distribution phase. While it is important to accumulate retirement savings, the distribution phase often presents the biggest challenge in the retirement planning process. Having an appropriate withdrawal strategy is a critical part of making sure those savings cover one's income and spending expectations.

  • Navigating Retirement Income Withdrawals

    While many focus on accumulating savings for retirement, the strategy for withdrawing those funds is equally crucial. A well-defined withdrawal strategy can help to ensure your savings last throughout your retirement years, aligning with your income and spending expectations.

  • Tailored Retirement Income Strategies for Individual Needs

    Every retirement journey is unique, and retirement income strategies should reflect these differences. Market Street Wealth Management works closely with each client to develop a personalized plan that aligns with their specific needs and goals. We utilize an approach known as the Asset-Cycle Portfolio System®.

  • Crafting a Retirement Income Plan: The Foundation

    Creating a retirement income plan begins with establishing a comprehensive budget. This involves understanding your anticipated spending and income needs. By carefully considering these factors, you can determine how much you need to save and how much you can safely withdraw each year.

  • Utilizing Predictable Income Sources for Essential Expenses

    During retirement, income streams may differ from traditional employment earnings. However, various sources can provide consistent income, including investments, Social Security, pension payments, annuities, and other potential sources. On the expenses side, some expenditures, such as housing, car loans, food, and utilities, are essential, while others, like vacations, charitable donations, or gifts, are discretionary.

  • Prioritizing Essential Expenses with Predictable Income

    Market Street Wealth Management recommends covering essential expenses with predictable income sources. These include Social Security, pension payments, annuities, interest income from bonds, and cash or short-term bonds held in reserve. We will frequently recommend having two to four years of essential expenses readily available in cash or short-term bonds. The Asset-Cycle® approach that we use carefully spells out time segments and job descriptions for your assets, providing clarity and purpose for your assets. This is an important part of the portfolio construction process.

  • Addressing Discretionary Expenses with Growth Assets

    Each situation is unique. While some clients prefer to construct a plan where all of their income is derived from predictable sources, it’s not uncommon for us to utilize a slightly different approach when it comes to discretionary expenses. Discretionary expenses can be funded by tapping growth assets or less predictable income sources within your portfolio. Stock dividends, distributions from mutual or exchange-traded funds, and proceeds from selling investments can provide consistent income, but they may fluctuate compared to guaranteed sources like Social Security, pensions, annuities, or bond coupon payments. No two plans are ever the same.

  • The Benefits of a Strategic Distribution Approach

    By allocating predictable income sources for essential expenses and using growth assets for discretionary spending, you can protect your portfolio from unnecessary volatility. If predictable expenses are known in advance, relying on volatile assets that could decline in value at the time of withdrawal is less desirable. Selling more assets to cover expenses may hinder your portfolio's ability to recover during market upswings.

  • Securing Your Retirement with a Strategic Distribution Plan

    Remember these key points when structuring your retirement portfolio and creating your distribution plan:

    • Regularly review your spending and income patterns to ensure your plan remains aligned with your expectations.
    • In prolonged market downturns, consider reducing or delaying discretionary spending to avoid excessive portfolio withdrawals.
Client Centered

Creating Retirement Income: A Simplified Approach

While retirement income planning may seem daunting, a simple three-step process can make it manageable:

  1. Establish a personalized plan tailored to your unique circumstances.
  2. Invest in a balanced portfolio that aligns with your risk tolerance and timeframe
  3. Distribute income from a variety of sources to enhance stability and predictability.

By following these steps, you can lay the groundwork for a fulfilling retirement that meets your financial goals and aspirations.

Market Street Wealth Management is a financial planning firm that specializes in helping people plan for retirement. We'll work with you to create a personalized retirement income plan that pursues your individual needs and goals.