If You Want To Retire, You Need To Put Your Money To Work!

Paul Durso Academy, Finance 101, Income Planning, Income Planning, Insight Investing Articles, Investing, Investing & Planning, Retirement, Retirement Planning

No Retirement Income Planning

There is a major concern in America today and that is the fear that you will not be able to retire. Nearly half of Americans believe they do not have enough money to retire without the fear of running out of money. That is a huge concern and I believe it boils down to one simple solution. Proper retirement income planning. Now don't be like most when you hear the term "income planning" and tune me out. Rather hear me out and you might find yourself in the minority that has the confidence to actually retire without the fear of running out of money. 

Too Focused on Growth

Wall Street is all too focused on growth and for the most part, so are most investors. Who doesn't want to grow their investments, right? Seems logical if you want to retire, then you will need a lot of growth on your investments. On the surface, growth is important. The issues with a growth only focus is when you need to generate income. 

Most people need to generate income off of their investments when they retire. Most American's will not have enough income from pensions and Social Security to satify their retirement income needs. This is the very reason why I believe we need to be just as focused on retirement income planning as we are on growth on investments.

The reason so many American's are afraid they are going to run out of money when they retire is they do not know how to turn their retirement nest egg into retirement income. 

Putting Your Money to Work

So how do you put your money to work?

First, let's look at what happens when you work. You find a job, you work and then you get paid! Some make more than others, but the concept is the same. We work and we get paid. 

Now, let's look at your investments in the same manner. You find an investment you like, or your financial planner recommends you buy an investment and you do just that. Now what? You are left to watch that investment go up and down with the stock market with nothing to show for it until you sell it. Now, how frustrating is that. Can you imagine going to work and not getting paid until you quit or retire? That would never happen, and yet it happens all of the time when it comes to your money!

That needs to change if you want to retire.

When I say, "you need to put your money to work", I mean just that. Put your money to work so you can get paid! The easiest example I can give you is a buying a stock that pays a dividend. Stocks pay on how many stock shares an investor owns, not the value of the stock itself. That means that a stock can go down in value and you can still get the same dividend you did when the stock was higher in price. That is not how most people understand stock dividends to work, yet that is exactly how they work!

Do you want your retirement income to fluctuate with market ups and downs or do you want a steady retirement income stream? Most would say they want a steady retirement income. If that's you, then you may need to stop looking for so much growth and start looking for investments that produce income. 

This material was prepared for informational and/or educational purposes only. Neither Insight Folios Inc nor its affiliates offer tax or legal advice. It is always best to consult with a qualified tax or legal professional regarding the best options for your particular circumstances.