Retirement Income Strategies


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In “A Tale of Two Cities,” Charles Dickens wrote, “It was the best of times, it was the worst of times.” When it comes to the markets, we believe that kind of describes the past seven years. On one hand, U.S. stocks have experienced a multi-bull run period. On the other, many potential investors were in recovery mode for their careers, real estate and assets, and didn’t participate in it.

Even those who saved up a tidy little nest egg may be concerned about not having enough money for the future. What’s a retiree to do? The following are some retirement income strategies to consider:1

Withdraw 4 Percent
Until recently, the “4% rule” was a widely followed practice for withdrawals. The idea was a retiree with a balanced investment portfolio could pull out 4 percent of his or her assets during each year of retirement, along with a corresponding annual inflation adjustment. However, the 4 percent figure is no longer the most accurate. You must also make adjustments for inflation and perhaps tighten the belt where cost of living increases are concerned.

Be Flexible
Another strategy is to adjust your withdrawal rate each year based on asset performance. For example, if you experience a down year, withdraw an amount closer to 3 percent. Clearly this may be difficult, but if the alternative is running out of money too soon, that should be sufficient motivation.

U-Shape
If you’re a long-term planner, the U-Shape withdrawal strategy may appeal. This strategy assumes you’ll spend more early on in retirement — traveling, splurging and freely enjoying yourself where spending is concerned. But eventually, you set a date when you cut back and settle into a more normal routine. During the later years of retirement, when health and long-term care expenses tend to increase, plan to withdraw more.

Tax Efficient
The tax-efficient strategy is designed to always keep you in the lowest tax bracket possible. This means you might spend down taxable assets first, then 401(k) and conventional IRA assets and finally non-taxable Roth IRA accounts. If longevity tends to run in your family, you may also want to defer taking Social Security for as long as possible to accrue the largest benefit.

Alternatively, consider spreading your tax liability by taking a little out of each type of account each year. If you withdraw as much as you need and still have room in your tax bracket, consider converting small portions of a traditional IRA into a Roth each year.

Growth Strategy
Some retirees decide to begin drawing Social Security benefits earlier rather than later to give their tax-deferred investments more time to potentially grow. Once you turn 70 ½, factor in mandatory withdrawals from conventional IRAs, 401(k) plans, 403(b) plans, etc. In this scenario, Roth IRAs don’t require mandatory withdrawals, so that may be the account you tap last for the greatest growth opportunity.

If we can help you with any of your retirement strategies please give us a call at 801-990-5055.


Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing investment and insurance products. Advisory services offered through B.O.S.S. Retirement Advisors, a Registered Investment Advisory firm.. Insurance products and services offered through B.O.S.S. Retirement Solutions. To see a list of services please visit us at bossretirement.com/services.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.We are not affiliated with any government agency including the Social Security Administration.

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