I’m sure you can come up with a list of things that don’t fit the “set it and forget it” philosophy. Set the cruise control and forget it. Set the room temperature and forget it. Invest in a certain investment that has a particular risk associated with it and forget it. You need to make adjustments as the situation changes and as your needs and priorities change. Retirement income planning works like that.
You won't need that initial level of retirement income, indexed for the rest of your life.
Retirement isn’t one long vacation. It isn’t one period in your life. It represents the longest set of phases in your life. Each phase will have different needs for cash flow. You’ll need more money in your early, active years. You then settle down to a more normal retirement where expenses drop. Then late in life, poor health, the loss of your spouse or partner, losing your driver's license and your attitude and behaviour will cause you to spend even less money. Yes, you may require money for long term care needs, but hopefully you planned for that before your retirement so that those needs aren’t coming out of your regular cash flow late in life. You should review how much money you need and the most efficient way of getting it every year, certainly as you experience life changing events.
Set up an investment and income stream that is flexible and adaptable to changing circumstances. Stress test the plans, strategies and components to make sure they continue to do the job they were designed to do. Life changes and your needs for income will change with them.
© 2020 by Peter a Wouters. Republished with permission by Peter Wouters. For the complete list of articles, please visit here.
Related articles:
Ten retirement myths series: Myth #10
Ten retirement myths series: Myth #9
Ten retirement myths series: Myth #8
Ten retirement myths series: Myth #7
Ten retirement myths series: Myth #5
Ten retirement myths series: Myth #4
Ten retirement myths series: Myth #3
Ten retirement myths series: Myth #2
This material is presented for informational purposes only, and is not a legal, tax or investment opinion. The provision of the information contained herein and any oral or written communication regarding the same should not nor is intended to be construed as such. Interested persons should seek retained independent professional advice before acting or foregoing action in relation to any of the matters mentioned herein reflected as of the date published or updated.
This blog reflects the views of the author as of the date stated. This information should not be considered a recommendation to buy or sell nor should it be relied upon as investment, tax or legal advice. Empire Life and its affiliates does not warrant or make any representations regarding the use or the results of the information contained herein in terms of its correctness, accuracy, timeliness, reliability, or otherwise, and does not accept any responsibility for any loss or damage that results from its use.
March 2020