August 7, 2025 • 27 mins
#SafeMoney #JonHeischmanSr #Distributions #IncomeStream
You have your retirement accounts in place, but in this week's episode host Jon Heischman, Senior talks about how and when to take distributions and your income stream.
Call Jon at (888) 426-0177 with questions, comments or to get a free copy of Top 10 IRA Mistakes and How to Avoid Tax Traps. Visit www.heischmanfs.com/ for additional information
You have your retirement accounts in place, but in this week's episode host Jon Heischman, Senior talks about how and when to take distributions and your income stream.
Call Jon at (888) 426-0177 with questions, comments or to get a free copy of Top 10 IRA Mistakes and How to Avoid Tax Traps. Visit www.heischmanfs.com/ for additional information
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
People really don't know what their expenses will because they
don't know how long that they're going to live.
Speaker 2 (00:06):
The Americans are worried they won't have enough safe for retirement.
Now more than ever, retirement's going to cost for many
folks over a million dollars.
Speaker 3 (00:14):
He is no short thing in investing, but a lot
of people think that annuities may come close to that.
Speaker 2 (00:19):
It's going to more safe, safe, safe, safe things that
they know.
Speaker 1 (00:22):
If they know they're going to need that money to
supplement the retirement, well then you can't play that rest.
Speaker 3 (00:27):
This is the Safe Money and Retirement Show. But John
Heischman Senior, founder and partner of Heisman Financial Services serving
the Columbus and surrounding areas. John specializes in educating pre
retirees and retirees about safe money strategies and ideas. Now
it's the Safe Money and Retirement Show. Here's John Heischman, Senior.
Speaker 2 (00:48):
Good morning, This is John Heischman bringing you the Safe
Money and Retirement Show. I want to talk about distributions
from a qualified plan and probably one of the most important.
The majority of the money could be in a four
to oh one K, but it also includes a four
(01:12):
h three b A TSP plan and pensions, any type
of qualified money that you have with your employer. If
you're getting ready to retire, or if you're fifty nine
and a half years old or older, you need to
know the ins and outs of these distributions. And I
(01:38):
say fifty nine and a half and older. Once you
reach fifty nine and a half, most of the time
you can take distributions from that qualified plan, roll over
the entire amount or a portion to your own IRA.
Now this depends on how the planned documents are written,
(02:03):
but I have had situations where the entire amount can
be rolled over. But on the other hand, recently, a
new client wanted to get as much money out of
his four to oh one K as possible, and he
was able to take out approximately seventy five percent. Personally,
(02:29):
I kind of like that because the account was not
closed out, he can still participate by making contributions and
receiving the match from his employer because he's still employed.
You might be thinking, well, why would someone want to
(02:50):
move as much as possible out of a four to
one K plan? And it depends on the individual. Well,
in this particular case, he wanted to eliminate risk he
also wanted control of his money and felt that it
(03:13):
would be in a safer place by rolling over to
an individual retirement account an IRA. And as I mentioned,
he is still participating in his employer's for A one
K because he's still employed with that twenty five percent
(03:35):
that he left in the four A one K account,
so he was very pleased, felt he had the best
of both worlds, and after reviewing all the options, he
was very pleased with his decision. Just something to think
about if you're still working and you're over age fifty
(04:00):
nine and a half. So actually this is considered a
partial rollover and again in this case, seventy five percent
of what his four to oh one K balance was
and because it was a partial rollover, there were no
(04:21):
tax A full rollover is usually done at retirement. It's
a tax free transferred of the money going from one
retirement plan to another, and it must go into a
(04:41):
plan that has the tax status of an IRA to
keep the money qualified. Now, when considering a rollover, what
I want to do is go over several factors which
each in individual need to consider and compare, such as
(05:06):
examination of fees, services offered investment options. When penalty free
withdrawals are available, and when required, minimum distributions are mds
may be required as well. There's also considerations as to
(05:29):
should you leave the money with your employer if that
option is available. Most people don't like doing that, but
there could be a situation where that might be more
beneficial for you than doing the rollover. That's why it's
(05:50):
very important to me to make sure each client, everyone
I talk to that's in that situation that's doing a rollover,
make sure you review all your options. Where do you
want that money rolled over to? In other words, what
type of plan is best for your risk tolerance and
(06:14):
risk capacity. Getting ready to retire and faced with a rollover,
let me help you review the paperwork you received from
your employer which will show those options, and then determine
(06:35):
where should that money go, In other words, what are
we going to roll it over to. We do a
lot of rollovers each year, so we're more than qualified
to help to make the right decision. Eight eight eight
four two six zero one seven to seven. Now that's
(06:57):
the number it's available, twenty four to seven. Your call
and message will be forwarded to me and I will
follow up. Eight eight eight four two six zero one
seventy seven. One thing comes to my mind that I
(07:17):
think is very important is those of you that are
still working and you have that qualified retirement plan, review
the beneficiary designations for that plan, because chances are some part,
(07:38):
if not all, of your retirement benefits will be distributed
after death occurs. In some cases, the plan participant dies
before retirement and before any distributions can be made, that
beneficiary needs to be intact. If a lump sum distribution
(08:04):
were due to the plan participant, which would be the employer,
it's going to go to that beneficiary as a lump
sum and the importance of naming a beneficiary. In the
absence of a name beneficiary, the distribution is going to
go to the estate. So many plans, including individual IRA
(08:31):
accounts beneficiaries have not been updated because it's something that
most people don't think about that much. And in a
case of a divorce, death of the beneficiary, or any
other situation, that beneficiary probably needs to be changed and updated.
(08:57):
As I'm discussing qualified plans, another important thing that we
need to address is most clients do not have a
single retirement plan. They have several, meaning iras a profit
(09:20):
sharing plan, a defined benefit plan, and possibly a four
to oh one K FOURH three B. Now let's say
you're at the age where you need to take required
minimum distributions from these qualified plans. A certain amount each
(09:45):
year has to be taken. You don't have a choice.
The IRS says, we want our tax money. You have
to take a distribution from each plan, and each qualified
plan has to be calculated separately, and many times the
(10:05):
more qualified plans you have, the more likelihood you're going
to get in trouble because you're going to miss one.
I like to have my clients have their required minimum
distribution set up systematically to where every year the company
(10:28):
where their money is managed is going to figure what
that RMD is going to be. Therefore, you don't have
the liability of missing one and have to pay the
penalty to the IRS. Now you can take the total
(10:51):
amount that you have to take from all plans. You
can take it from one plan, but the other ones
that you didn't take the RMD from, they need to
know what you're doing. It gets complicated here. So the
bottom line is, let's figure out what all of your
(11:12):
rmds are going to be. Where are you going to
take them from Are you going to take them from
one or are you going to take them from all?
And make sure you get it right and have it
set up right for future rmds. And of course I
can help you with that, show you what the amounts
(11:32):
are going to be, figure out how you want to
receive them in which way are you going to receive them?
Welcome the opportunity to help it any way I can.
That's what I'm here for. You can call me at
aightaight eight four to two six zero one seven seven
(11:53):
triple eight four to two six zero one seventy seven.
Let's take a short break at this time. Stay tuned,
I'll be right back.
Speaker 1 (12:08):
Thanks for listening to The Safe Money and Retirement Show
with John Heischman. For more information, call one eight eight
eight or two six zero one seventy seven. That's one
eight eight eight or two six zero one seven to seven,
or visit their website at heischmanfs dot com. More of
the Safe Money and Retirement Show in a moment. There
(12:34):
are some gains in life that most folks don't mind
losing extra weight gained or credit card debt gain, the
number of miles gained on your car. But Losing your
retirement gains is no one's dream. Would you like to
retain the retirement money you've gained over the years and
at the same time create a paycheck for life in retirement,
(12:56):
then call John Heischman at Heischman Financial Services four eight
six one seven h five to five, or call toll
free at one eight eight eight four two six zero
one seven seven. His clients don't lose their gains due
to market risk. Their gains are locked in with no
exposure to risk. Retain your gains. Losing some of the
(13:18):
candles gained on your birthday cake would be great, or
losing some of the strokes gained in your golf game
would be a dream come true, but losing retirement gains
would be a nightmare. Don't risk it. Retain your gains today.
Cal John Heisman at Heisman Financial Services to find out how.
Call six one four eight six one seven oh five
(13:40):
to five. That's six one four eight six one seven
zero five five, or call toll free at one eight
eight eight four to two six zero one seven seven.
Welcome back to the Save Money and Retirement Show with
(14:03):
John Heisman. To contact John, the number to call is
one eight eight eight or two six zero one seven seven.
That's one eight eight eight or two six zero one
seven seven. Once again, here's John Heisman.
Speaker 2 (14:18):
This is John Heischman, and I'm back for the second
part of our show this morning. I'm going to talk
about creating sustainable income streams starting at end in retirement.
Most all individuals, they understand the basic strategy of saving
(14:43):
money for retirement, save early, and save often. How to
turn a retirement savings accumulation into a sustainable income stream
is much less understood, So there needs to be a
(15:04):
disciplined distribution plan when we get into designing that retirement
income plan. I'm going to touch on several different strategies
that I use depending on the individual client. And there
(15:28):
has to be a strategy because it's not a situation
where a retiree starts drawing income from the retirement accounts
at a set amount. For example, let's say you have
four hundred thousand in retirement accounts. You're thinking, I'm going
(15:53):
to withdraw two thousand dollars per month. It sounds good,
it sounds reasonable, but when you do the computation and
depending on other factors, you're going to run out of
money during retirement. So there has to be a plan.
(16:17):
I have to put together some guidelines to follow because,
regardless of the income withdrawal strategy, the retirement income has
to last the rest of your life. One of the
most important ways to take income in retirement is what
(16:38):
we call the systematic withdrawal and the four percent rule.
This approach will generate ongoing cash flows by liquidating from
a regular, rebalance diversified portfolio. Now, the key to systematic
(16:59):
withdrawal is to identify the withdrawal rate that's going to
allow you to receive regular streams of income without running
out of money before the end of your retirement. You
may be thinking why four percent. Well, years ago, an
(17:23):
individual by the name of William Bengins developed this so
called four percent rule. How he figured that out was
very detailed, which I won't go into during my show.
But the bottom line is, if we can operate at
(17:43):
this four percent withdrawal rate, especially early in retirement, you
should not run out of money. Your rate of return
on the funds left in your retirement account you're paying
you an income of four percent should be four percent
(18:05):
or greater, and if not, you're going to need to
make some adjustments on your retirement accounts. Now, as the
retiree gets older, this rate can be adjusted up to
help offset inflation, especially when we see growth in those
(18:26):
retirement accounts that are generating income. That's the perfect scenario.
You may be thinking. See four percent is awful low
as far as the amount of income it's going to generate.
But keep in mind most individuals will have Social Security,
(18:47):
some are fortunate enough to have a pension to help
offset that low withdrawal rate, and especially over the last
fifteen years, one of the best ways to off set
that low withdrawal rate is to make sure some or
(19:08):
all of your retirement accounts have what we call the
guaranteed lifetime income benefit, where that income is set and
it's one hundred percent guaranteed for life. So if you
haven't looked into that, or if you have some accounts
(19:28):
that don't have that benefit, you really need to find
out more about how that can be added. So give
me a call and we'll talk about that. We can
schedule a five to ten minute, even fifteen minute telephone call.
It's up to you, and we can discuss it over
(19:50):
the phone. Eight eight eight four two six zero one
seven seven. That number again is triple eight four, six zero,
one seventy seven. What about the bucket strategy. It is
an alternative to the systematic withdrawal approach, which actually became
(20:17):
very popular back in two thousand and seven to two
thousand and nine because of the financial crisis. The bucket
approach is meant to mitigate the sequence of returns risk
by creating a bucket of cash or money market instruments
(20:38):
similar for your immediate cash flow needs, while also maintaining
a diversified portfolio of more volatile assets with higher potential
return for future needs and income. This approach is going
to recognize that retirees face different risk as they move
(21:05):
through retirement. The three bucket approach is based on specific
times when the money will be needed in retirement. So
we have the first bucket comprised of short term, low
yielding liquid investments. The second bucket is structured to cover
(21:29):
income needs that is going to occur five to fifteen years.
In Bucket three can be used later in life for
legacy purposes, and typically this is going to be your
higher risk, potentially higher rate to return. Here's another strategy
(21:50):
called floor and upside strategies. Here the focuses on safety
overgrowth potential locks in some secure system of retirement income
before investing in any remaining retirement assets in a riskier portfolio.
(22:13):
A so called income floor is a level of income
below which a retiree will not fall. It is a
fixed amount that is typically enough to cover your fixed expenses.
Keep in mind this income plan should be flexible and
(22:37):
adaptable for adjustment as time goes on because of several
different factors. Another strategy is the use of annuities, which
is most favored by economists, particularly for retirees who aren't
(22:58):
concerned with leaving a legacy. Here, the annuity provides the
greatest longevity insurance of the strategies that I've been discussing,
and there are several different type of annuities that can
be used, but my preference is one that generates the
(23:22):
guaranteed lifetime income and will pay the beneficiary the full
accumulation value upon death. Regardless of the different distribution approaches,
it all boils down to what is best for you
(23:42):
the amount of retirement assets that you have, because the
majority of people fear running out of money and retirement
more than they fear death. What I've seen in working
with my clients, a definite distribution plan is going to
(24:05):
help them feel less overwhelmed by the decisions that they're
going to face as they enter retirement. It's important to
give them more confidence and their ability to retain financial independence.
So I've given you some ideas and different strategies to
(24:28):
think about your retirement income plan, and I'm sure the
majority of you have not heard of these strategies prior
to listening to my show. As I said before, it
is so important to work with a retirement planner for
(24:50):
that income plan, and if at all possible, start the
design prior to retirement. Way you get a good idea
of where you're at. It's going to be adjusted. Don't
worry about the fact that you're stuck with that. But
that preliminary plan can really be valuable, and as mentioned,
(25:15):
it has to be flexible so we can adjust that
in the future. Need to talk about your income plan
or a second opinion to have it reviewed, I'd like
to hear from you eight eight eight four two six
zero one seven seven triple eight four two six zero
(25:39):
one seventy seven. I thank you for joining me today
and feel free to listen to past radio shows by
going to HEISHMANFS dot com. That's the website h eisch
(26:00):
and f S dot com. Join me next week. I'll
have some new ideas for you that can help you
plan your retirement and have a better retirement if you're
already retired. Thanks again, this is your host, John Heischman
with the Safe Money and Retirement Show.
Speaker 3 (26:21):
The Safe Money and Retirement Joe John Heisman Senior. To
get in touch with John, call one AA eight four
two six zero one seven seven. That's one triple eight
four two six zero one seven seven. For more information
about Heisman Financial Services, visit their website Heisman f S
(26:41):
dot com. That's h E I S C h M
A n f S dot com. Join us again next
time for the Safe Money and Retirement Show with John
Heisman Senior.
People really don't know what their expenses will because they
don't know how long that they're going to live.
Speaker 2 (00:06):
The Americans are worried they won't have enough safe for retirement.
Now more than ever, retirement's going to cost for many
folks over a million dollars.
Speaker 3 (00:14):
He is no short thing in investing, but a lot
of people think that annuities may come close to that.
Speaker 2 (00:19):
It's going to more safe, safe, safe, safe things that
they know.
Speaker 1 (00:22):
If they know they're going to need that money to
supplement the retirement, well then you can't play that rest.
Speaker 3 (00:27):
This is the Safe Money and Retirement Show. But John
Heischman Senior, founder and partner of Heisman Financial Services serving
the Columbus and surrounding areas. John specializes in educating pre
retirees and retirees about safe money strategies and ideas. Now
it's the Safe Money and Retirement Show. Here's John Heischman, Senior.
Speaker 2 (00:48):
Good morning, This is John Heischman bringing you the Safe
Money and Retirement Show. I want to talk about distributions
from a qualified plan and probably one of the most important.
The majority of the money could be in a four
to oh one K, but it also includes a four
(01:12):
h three b A TSP plan and pensions, any type
of qualified money that you have with your employer. If
you're getting ready to retire, or if you're fifty nine
and a half years old or older, you need to
know the ins and outs of these distributions. And I
(01:38):
say fifty nine and a half and older. Once you
reach fifty nine and a half, most of the time
you can take distributions from that qualified plan, roll over
the entire amount or a portion to your own IRA.
Now this depends on how the planned documents are written,
(02:03):
but I have had situations where the entire amount can
be rolled over. But on the other hand, recently, a
new client wanted to get as much money out of
his four to oh one K as possible, and he
was able to take out approximately seventy five percent. Personally,
(02:29):
I kind of like that because the account was not
closed out, he can still participate by making contributions and
receiving the match from his employer because he's still employed.
You might be thinking, well, why would someone want to
(02:50):
move as much as possible out of a four to
one K plan? And it depends on the individual. Well,
in this particular case, he wanted to eliminate risk he
also wanted control of his money and felt that it
(03:13):
would be in a safer place by rolling over to
an individual retirement account an IRA. And as I mentioned,
he is still participating in his employer's for A one
K because he's still employed with that twenty five percent
(03:35):
that he left in the four A one K account,
so he was very pleased, felt he had the best
of both worlds, and after reviewing all the options, he
was very pleased with his decision. Just something to think
about if you're still working and you're over age fifty
(04:00):
nine and a half. So actually this is considered a
partial rollover and again in this case, seventy five percent
of what his four to oh one K balance was
and because it was a partial rollover, there were no
(04:21):
tax A full rollover is usually done at retirement. It's
a tax free transferred of the money going from one
retirement plan to another, and it must go into a
(04:41):
plan that has the tax status of an IRA to
keep the money qualified. Now, when considering a rollover, what
I want to do is go over several factors which
each in individual need to consider and compare, such as
(05:06):
examination of fees, services offered investment options. When penalty free
withdrawals are available, and when required, minimum distributions are mds
may be required as well. There's also considerations as to
(05:29):
should you leave the money with your employer if that
option is available. Most people don't like doing that, but
there could be a situation where that might be more
beneficial for you than doing the rollover. That's why it's
(05:50):
very important to me to make sure each client, everyone
I talk to that's in that situation that's doing a rollover,
make sure you review all your options. Where do you
want that money rolled over to? In other words, what
type of plan is best for your risk tolerance and
(06:14):
risk capacity. Getting ready to retire and faced with a rollover,
let me help you review the paperwork you received from
your employer which will show those options, and then determine
(06:35):
where should that money go, In other words, what are
we going to roll it over to. We do a
lot of rollovers each year, so we're more than qualified
to help to make the right decision. Eight eight eight
four two six zero one seven to seven. Now that's
(06:57):
the number it's available, twenty four to seven. Your call
and message will be forwarded to me and I will
follow up. Eight eight eight four two six zero one
seventy seven. One thing comes to my mind that I
(07:17):
think is very important is those of you that are
still working and you have that qualified retirement plan, review
the beneficiary designations for that plan, because chances are some part,
(07:38):
if not all, of your retirement benefits will be distributed
after death occurs. In some cases, the plan participant dies
before retirement and before any distributions can be made, that
beneficiary needs to be intact. If a lump sum distribution
(08:04):
were due to the plan participant, which would be the employer,
it's going to go to that beneficiary as a lump
sum and the importance of naming a beneficiary. In the
absence of a name beneficiary, the distribution is going to
go to the estate. So many plans, including individual IRA
(08:31):
accounts beneficiaries have not been updated because it's something that
most people don't think about that much. And in a
case of a divorce, death of the beneficiary, or any
other situation, that beneficiary probably needs to be changed and updated.
(08:57):
As I'm discussing qualified plans, another important thing that we
need to address is most clients do not have a
single retirement plan. They have several, meaning iras a profit
(09:20):
sharing plan, a defined benefit plan, and possibly a four
to oh one K FOURH three B. Now let's say
you're at the age where you need to take required
minimum distributions from these qualified plans. A certain amount each
(09:45):
year has to be taken. You don't have a choice.
The IRS says, we want our tax money. You have
to take a distribution from each plan, and each qualified
plan has to be calculated separately, and many times the
(10:05):
more qualified plans you have, the more likelihood you're going
to get in trouble because you're going to miss one.
I like to have my clients have their required minimum
distribution set up systematically to where every year the company
(10:28):
where their money is managed is going to figure what
that RMD is going to be. Therefore, you don't have
the liability of missing one and have to pay the
penalty to the IRS. Now you can take the total
(10:51):
amount that you have to take from all plans. You
can take it from one plan, but the other ones
that you didn't take the RMD from, they need to
know what you're doing. It gets complicated here. So the
bottom line is, let's figure out what all of your
(11:12):
rmds are going to be. Where are you going to
take them from Are you going to take them from
one or are you going to take them from all?
And make sure you get it right and have it
set up right for future rmds. And of course I
can help you with that, show you what the amounts
(11:32):
are going to be, figure out how you want to
receive them in which way are you going to receive them?
Welcome the opportunity to help it any way I can.
That's what I'm here for. You can call me at
aightaight eight four to two six zero one seven seven
(11:53):
triple eight four to two six zero one seventy seven.
Let's take a short break at this time. Stay tuned,
I'll be right back.
Speaker 1 (12:08):
Thanks for listening to The Safe Money and Retirement Show
with John Heischman. For more information, call one eight eight
eight or two six zero one seventy seven. That's one
eight eight eight or two six zero one seven to seven,
or visit their website at heischmanfs dot com. More of
the Safe Money and Retirement Show in a moment. There
(12:34):
are some gains in life that most folks don't mind
losing extra weight gained or credit card debt gain, the
number of miles gained on your car. But Losing your
retirement gains is no one's dream. Would you like to
retain the retirement money you've gained over the years and
at the same time create a paycheck for life in retirement,
(12:56):
then call John Heischman at Heischman Financial Services four eight
six one seven h five to five, or call toll
free at one eight eight eight four two six zero
one seven seven. His clients don't lose their gains due
to market risk. Their gains are locked in with no
exposure to risk. Retain your gains. Losing some of the
(13:18):
candles gained on your birthday cake would be great, or
losing some of the strokes gained in your golf game
would be a dream come true, but losing retirement gains
would be a nightmare. Don't risk it. Retain your gains today.
Cal John Heisman at Heisman Financial Services to find out how.
Call six one four eight six one seven oh five
(13:40):
to five. That's six one four eight six one seven
zero five five, or call toll free at one eight
eight eight four to two six zero one seven seven.
Welcome back to the Save Money and Retirement Show with
(14:03):
John Heisman. To contact John, the number to call is
one eight eight eight or two six zero one seven seven.
That's one eight eight eight or two six zero one
seven seven. Once again, here's John Heisman.
Speaker 2 (14:18):
This is John Heischman, and I'm back for the second
part of our show this morning. I'm going to talk
about creating sustainable income streams starting at end in retirement.
Most all individuals, they understand the basic strategy of saving
(14:43):
money for retirement, save early, and save often. How to
turn a retirement savings accumulation into a sustainable income stream
is much less understood, So there needs to be a
(15:04):
disciplined distribution plan when we get into designing that retirement
income plan. I'm going to touch on several different strategies
that I use depending on the individual client. And there
(15:28):
has to be a strategy because it's not a situation
where a retiree starts drawing income from the retirement accounts
at a set amount. For example, let's say you have
four hundred thousand in retirement accounts. You're thinking, I'm going
(15:53):
to withdraw two thousand dollars per month. It sounds good,
it sounds reasonable, but when you do the computation and
depending on other factors, you're going to run out of
money during retirement. So there has to be a plan.
(16:17):
I have to put together some guidelines to follow because,
regardless of the income withdrawal strategy, the retirement income has
to last the rest of your life. One of the
most important ways to take income in retirement is what
(16:38):
we call the systematic withdrawal and the four percent rule.
This approach will generate ongoing cash flows by liquidating from
a regular, rebalance diversified portfolio. Now, the key to systematic
(16:59):
withdrawal is to identify the withdrawal rate that's going to
allow you to receive regular streams of income without running
out of money before the end of your retirement. You
may be thinking why four percent. Well, years ago, an
(17:23):
individual by the name of William Bengins developed this so
called four percent rule. How he figured that out was
very detailed, which I won't go into during my show.
But the bottom line is, if we can operate at
(17:43):
this four percent withdrawal rate, especially early in retirement, you
should not run out of money. Your rate of return
on the funds left in your retirement account you're paying
you an income of four percent should be four percent
(18:05):
or greater, and if not, you're going to need to
make some adjustments on your retirement accounts. Now, as the
retiree gets older, this rate can be adjusted up to
help offset inflation, especially when we see growth in those
(18:26):
retirement accounts that are generating income. That's the perfect scenario.
You may be thinking. See four percent is awful low
as far as the amount of income it's going to generate.
But keep in mind most individuals will have Social Security,
(18:47):
some are fortunate enough to have a pension to help
offset that low withdrawal rate, and especially over the last
fifteen years, one of the best ways to off set
that low withdrawal rate is to make sure some or
(19:08):
all of your retirement accounts have what we call the
guaranteed lifetime income benefit, where that income is set and
it's one hundred percent guaranteed for life. So if you
haven't looked into that, or if you have some accounts
(19:28):
that don't have that benefit, you really need to find
out more about how that can be added. So give
me a call and we'll talk about that. We can
schedule a five to ten minute, even fifteen minute telephone call.
It's up to you, and we can discuss it over
(19:50):
the phone. Eight eight eight four two six zero one
seven seven. That number again is triple eight four, six zero,
one seventy seven. What about the bucket strategy. It is
an alternative to the systematic withdrawal approach, which actually became
(20:17):
very popular back in two thousand and seven to two
thousand and nine because of the financial crisis. The bucket
approach is meant to mitigate the sequence of returns risk
by creating a bucket of cash or money market instruments
(20:38):
similar for your immediate cash flow needs, while also maintaining
a diversified portfolio of more volatile assets with higher potential
return for future needs and income. This approach is going
to recognize that retirees face different risk as they move
(21:05):
through retirement. The three bucket approach is based on specific
times when the money will be needed in retirement. So
we have the first bucket comprised of short term, low
yielding liquid investments. The second bucket is structured to cover
(21:29):
income needs that is going to occur five to fifteen years.
In Bucket three can be used later in life for
legacy purposes, and typically this is going to be your
higher risk, potentially higher rate to return. Here's another strategy
(21:50):
called floor and upside strategies. Here the focuses on safety
overgrowth potential locks in some secure system of retirement income
before investing in any remaining retirement assets in a riskier portfolio.
(22:13):
A so called income floor is a level of income
below which a retiree will not fall. It is a
fixed amount that is typically enough to cover your fixed expenses.
Keep in mind this income plan should be flexible and
(22:37):
adaptable for adjustment as time goes on because of several
different factors. Another strategy is the use of annuities, which
is most favored by economists, particularly for retirees who aren't
(22:58):
concerned with leaving a legacy. Here, the annuity provides the
greatest longevity insurance of the strategies that I've been discussing,
and there are several different type of annuities that can
be used, but my preference is one that generates the
(23:22):
guaranteed lifetime income and will pay the beneficiary the full
accumulation value upon death. Regardless of the different distribution approaches,
it all boils down to what is best for you
(23:42):
the amount of retirement assets that you have, because the
majority of people fear running out of money and retirement
more than they fear death. What I've seen in working
with my clients, a definite distribution plan is going to
(24:05):
help them feel less overwhelmed by the decisions that they're
going to face as they enter retirement. It's important to
give them more confidence and their ability to retain financial independence.
So I've given you some ideas and different strategies to
(24:28):
think about your retirement income plan, and I'm sure the
majority of you have not heard of these strategies prior
to listening to my show. As I said before, it
is so important to work with a retirement planner for
(24:50):
that income plan, and if at all possible, start the
design prior to retirement. Way you get a good idea
of where you're at. It's going to be adjusted. Don't
worry about the fact that you're stuck with that. But
that preliminary plan can really be valuable, and as mentioned,
(25:15):
it has to be flexible so we can adjust that
in the future. Need to talk about your income plan
or a second opinion to have it reviewed, I'd like
to hear from you eight eight eight four two six
zero one seven seven triple eight four two six zero
(25:39):
one seventy seven. I thank you for joining me today
and feel free to listen to past radio shows by
going to HEISHMANFS dot com. That's the website h eisch
(26:00):
and f S dot com. Join me next week. I'll
have some new ideas for you that can help you
plan your retirement and have a better retirement if you're
already retired. Thanks again, this is your host, John Heischman
with the Safe Money and Retirement Show.
Speaker 3 (26:21):
The Safe Money and Retirement Joe John Heisman Senior. To
get in touch with John, call one AA eight four
two six zero one seven seven. That's one triple eight
four two six zero one seven seven. For more information
about Heisman Financial Services, visit their website Heisman f S
(26:41):
dot com. That's h E I S C h M
A n f S dot com. Join us again next
time for the Safe Money and Retirement Show with John
Heisman Senior.
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