The Four Key Retirement Measurements to Assess where You Are in Retirement

Withdrawal Rates: Most advisers no longer use the 4% income, i.e. bond interest and stock dividends currently are generating between 2.5% and 3.0%. And often retirees must spend portfolio principle to meet their monthly expense and discretionary spending. But identifying your monthly spending can help you partition assets dedicated to lifetime income using single premium immediate annuities and deferred income annuities.

Reliability of Income: These types of income annuities are guaranteed income you can’t outlive. And in retirement you need reliable income because your Social Security benefits won’t be enough. You can also add an inflation rider to these annuities as well, to guarantee annual increases throughout retirement, unlike the unpredictability of Social Security benefit increases.

Discretionary Liquidity: You’ll need liquidity in retirement. You may have an opportunity to suddenly go on an exciting trip with friends, or face unforeseen medical bills or have a major home repair or car purchase. You don’t want to be in a position to sell off qualified plans monies that will trigger taxes and taxes on Social Security benefits. You don’t want to sell non-qualified mutual funds or ETFs with significant profits and pay capital gains tax. So you need discretionary income that can be used without the additional transaction of triggering taxes.

Net Worth: Although retirement is for retirees, most seniors desire to be benevolent to their family, friends and charities. Many seniors want to grow their wealth for additional spending goals or big-ticket items. Some seniors want to grow their estate to pay for future long-term care costs. And a growing number of retirees are simply unconcerned about wealth accumulation and are income driven in their money philosophy.

There are several retirement software packages that can monitor these four areas and others of interest. The big news here is that the software is intuitive and user friendly.