Once you're retired and your salary has stopped, what is your plan to cover your expenses? A significant number of retirees withdraw funds from their retirement savings without a strategy. Not having a plan for how you're going to draw from your retirement savings is a major concern.
Early retirement planning is crucial for those concerned with the possibility that they may outlive their assets. To alleviate that concern, folks are encouraged to make efforts to control their expenses, budget more tightly, or take actions to earn more income. When planning for retirement, many sources will tell you to focus on the size of your nest egg as your primary goal. In my opinion, building up a nest egg and hoping that you won't run out of money is not a strategy, it's wishful thinking.
The primary goal for your retirement should focus on earning sufficient income from your savings to cover your expenses. If you have the ability to earn more than you spend, you will have the wonderful 'problem' of extra cash that can be reinvested.
The potential to outlive your assets can cause some headaches. However, teachers don't teach without a lesson plan, coaches don't coach without a game plan, and authors don't write without an outline. Don't rush into retirement spending without having a plan focusing on earning income and monitoring your spending habits.
Ethan Wade, Financial Advisor
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).