Income and Retirement Planning during COVID. How You Can Plan For the Future During Challenging Times

Covid was the second major setback for near retirees. The first was the major economic downturn in 2008 attributed to the housing market crash. People who are near retirement may have been significantly impacted by these events and we want to present how to get us back on track. Getting on track means to move forward with the right steps to build income and secure a confident retirement. To start, we will discuss individual’s retirement priorities. We will have general information on what concerns most people (medical costs, outliving one’s money). We would like for people to email us ahead if they like to ask either anonymously, or with their name, questions about retirement planning. Outside of living comfortably, there are many goals that people still want to accomplish in these non-working years. We will review the five retirement planning mistakes during Covid and share our thoughts about navigating this difficult time in addition to how to keep oneself financially organized. In looking at strategies for creating income, we will discuss the 4 Box Strategy. This strategy creates a visual for where funds should be invested and diversified in order to pay for necessary and fixed expenses. We will review how to predict if there will be a surplus or deficit after necessary expenses have been paid. We will discuss which different assets to withdraw income from first, and how to fund discretionary spending. Taxation and legacy planning are many times considerations in how funds are spent. We will illustrate the concepts we discuss by utilizing a popular retirement calculator. The retirement calculator is interactive. We provide data about the pre-retiree, date of birth, salary and current savings to measure how much the person will live on during retirement. Different projections will be shared as we change date of death, savings rate, and retirement year. Portfolio withdrawals are one of the most relied upon ways, in addition to pensions and social security, to fund retirement. The income from these sources must last throughout one’s entire life. In our work as financial planners, we typically project people living to age 95. We will address how to maintain income through retirement by proper diversification and appropriate withdrawal rates. The likelihood of having money left at the end of one’s retirement will depend significantly on rates of returns, investments choices, and withdrawal rates. As the market has much volatility, and there could be many bear years in our future, it may not be best to withdraw significant amounts from investable assets (it takes that much more return to offset the loss and withdrawal). We will discuss other strategies that will give guarantees. Using a hybrid approach of a guaranteed and non-guaranteed (market driven) investments, one can secure a confident retirement. As a summary, we will share a worksheet tool that attendees can use to itemize how they will fund necessary expenses and discretionary expenses. We will talk through the 4 Box Strategy again. Attendees will be asked for questions and feedback at the conclusion. We will be open to complimentary conversations with attendees.


Please email Chris Kessler ckessler@fortislux.com for more information.