If looked at closely it is easy to see that retirement in not a product, but rather a strategy!

posted Nov 25, 2012, 5:39 AM by Matthew Wood   [ updated Dec 23, 2013, 11:47 AM ]
In this article, I would like to share some important thoughts, ideas and principles that I have learned as a member of the Wisconsin Financial Group Inc. in regards to Retirement Income planning.  

There are 3 financial phases of life: Accumulation, Distribution and Legacy. There are many people in the accumulation phase of their financial life accumulating dollars for the purpose of retirement income.  This sounds great, however many of them are doing it without any knowledge of how retirement income streams will work once they get to the distribution phase of their financial life. If you ask a person why they are accumulating money, many of them would say “for retirement.”  If you then asked them, “how do retirement income streams work?” very few of them would know, yet this is the reason they are saving the money. How retirement income streams work define how to efficiently allocate retirement savings in pre-retirement to be able to maximize income during retirement.  There are 2 important variables that are unknown during the retirement income distribution phase that need to be considered.

1) How will the market perform during my retirement?

2) How long will I live?

Not knowing these important variables, many people are formulating retirement asset accumulation and distribution strategies that will only work well if the market performs favorably and they do not live very long. Their ability to maximize legacy will also be dependent upon these 2 unknown variables.  My goal is to implement a retirement accumulation and distribution strategy for my clients that will work under all circumstances and allow them the ability to maximize legacy.  I am able to accomplish this by measuring their current strategy and comparing it to others to be able to determine which strategy will be the most efficient allocation of dollars in pre-retirement to be able to create a retirement income stream that is maximized, will work under all circumstances and yet allow for legacy maximization.

Core Economic Principles for Wealth Building

1) Always employ strategies today that will allow you to use both your principal and interest to generate retirement income versus interest only in order to be able to create Retirement Income Maximization.

2) Create multiple uses of money whenever possible rather than using your money for a singular use, use your money in places where it does more than one thing for you at the same time.  The more benefits and money supply created by a single dollar the better.

3) Avoid killing maturity of money. We all only have one 30-40 year maturity cycle to work with. Avoid killing assets to pay for things such as college, as you not only lose the money you have accumulated, but also the potential of the money to accumulate further.  Instead, use vehicles that continue to grow after the money is taken out.

4) Start the most efficient strategies as soon as possible as the clock is ticking. We all only have one maturity cycle to work with for our strategies as well.  The longer the strategy has to work the greater the impact it has.  The longer we wait to implement efficient strategies the more money we lose in the end, as the years come off the back end of the accumulation curve, not the front end. 

I want to invite you to contact me to discuss your current insurance and financial situation and allow me to compare your current strategy to others.  This process will determine what will be the most efficient way for you to allocate your dollars in pre-retirement to be able to create retirement income maximization that will work under all circumstances and also allow for legacy maximization.

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