How Can I Afford My Retirement Archetype?

To put it simply: some archetypes are more expensive than others. And while you may have only thought of retirement in terms of the assets you have, now I would challenge you to think about the how retirement income can be an important part of achieving your vision for your retirement.

Guaranteed Income

First things first: when you retire, you’ll still need an income. If you’ve put a plan for retirement in place—and hopefully, that’s what you’re doing now—this will come from your retirement income stream, a combination of retirement income sources. That might be mutual funds, stocks and bonds, Social Security income, a pension, an annuity, or a mix of any of those.

Some of these types of income are guaranteed, meaning they’ll provide a certain minimum amount of income that will never change, for a set number of years or until the end of your life. These include private sources of income like defined-benefit pensions and fixed annuities. It also includes Social Security.

The big advantage of a guaranteed income stream is pretty obvious—you can count on it. You know how much you’re going to get, and when, and for how long.

Non-Guaranteed Income

Non-guaranteed income is income that fluctuates, either due to the amount and frequency of withdrawals or with the market, or is subject to gain and loss. It is also called variable income.

Your Retirement Reality Tip

You’ll want to remember these terms when you’re planning for retirement: fixed (guaranteed) and variable (non-guaranteed).

Stocks, mutual funds, bond portfolios, CDs and money market accounts are all examples of non-guaranteed forms of income. They grow and shrink according to the health of the economy and the type of investments you make. Even a personal savings account doesn’t guarantee an amount and duration of income, because you could conceivably withdraw all the money and spend it on a whim. For the same reason, income from cash isn’t guaranteed either.

Some forms of non-guaranteed income can be very lucrative—if they pay off. It’s your call to decide your comfort level with variability in your retirement income.

If you need help making an informed decision, why not schedule a Retirement Income Checkup with one of our professionals?

Your Retirement Reality Sherpa

Reality Check: It Might Be Time to Revisit Your Retirement Income Plan

Funding your retirement today has changed dramatically from planning a retirement income a few decades ago. Today’s economic circumstances have created a new reality that requires a different approach.
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