Retirement Weekly: 4 predictable retirement problems — and how to solve them

by | Oct 7, 2022 | Stock Market

​When modeling out retirement, people often apply rules of thumb for income timing. The classic one is the “​4% rule,” which many people now think is a bit optimistic as a “safe” withdrawal rate. ​Beyond rules of thumb, there are also plenty of sophisticated approaches to income timing. These take into account portfolio allocations, taxes, qualified-plan distribution rules, anticipated cash flows and more. The modeling process lays an important foundation for preretirees and those newly retired. It helps them sleep at night, knowing there’s a plan for delivering the income they’ll need.

​Read: The 4% retirement spending rule may be too high. Could you get by on 1.9%? But plans change. Whether the model was a rule of thumb or something more involved, real-life income needs end up lumpier than expected. A client calls an advis​e​r and says something like, “I need $10,000 to help my son buy a house. Where can we get it?” Or the client might say, “I know we said we didn’t want expensive travel. But we’ve gotten involved in our homeowner’s association and think we want to join a group going on an African safari. Can we make it work?” Whatever the reason for the client’s call, the advis​e​r ends up helping to facilitate adjustments to meet clients’ needs on that day. From a planning perspective, clients are usually untroubled by devi …

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