The Importance of Diverse Income Streams in Retirement

Today, something really tugged at my heartstrings. It was an interview I heard on the radio about a big trucking company that's shutting down. What caught my attention was a 60-year-old gentleman who worked for this company for over 30 years. Here's the kicker: His pension, once a cozy retirement nest egg, has shrunk to a quarter of what he was promised. He was practically in tears, unsure how he'd survive on such a reduced income at his age. It made me think: Are we putting too much trust in entities that may let us down?

The Risks of Relying Solely on a Pension

Our 60-year-old friend’s predicament illustrates a harsh reality. When you depend solely on a pension, you might find yourself holding an empty bag if the company goes under or mismanages the funds. Pensions are typically seen as a safe bet, but they're not foolproof. The collapse of a company can devastate even the most carefully planned retirement.

Social Security: A Cherry on Top, Not the Whole Sundae

Social Security is another area of concern. While it's hard to imagine it disappearing completely, relying solely on Social Security for your retirement income adds another layer of risk. What if the checks stop coming or the amounts get reduced? Ideally, Social Security should be the cherry on top of your retirement income, not the entire sundae.

Controlling What You Can: Savings and Investments

Unlike pensions or Social Security, your savings and investments are within your control. Yes, the market has its ups and downs, but with a little planning and attention, you can manage and mitigate those risks. Consider diversifying your income streams so that you are not overly dependent on any one source. Various income sources, such as personal savings, 401(k)s, IRAs, and non-retirement investment accounts, offer a buffer against the unexpected.

Running the Numbers

One critical step in retirement planning is to run your numbers. What would your income look like without Social Security or with reduced pension benefits? It’s an eye-opening exercise and a crucial step in ensuring you're prepared for the worst while hoping for the best.

Conclusion

Retirement planning isn't just about setting money aside; it's about understanding where that money is coming from and preparing for any uncertainties. One income stream stops in retirement (employment) but others should start to supplement. If you aren’t sure what those are, you need to do the Running the Numbers exercise above.

Don’t put all your eggs in one basket. Diversify your income streams, understand your risks, and take control of your financial future. If you need help navigating these waters, give us a call at One Vision Retirement. Let us help you craft a retirement plan that’s as solid as a rock and just as dependable.

https://www.onevisionretire.com/

Investment advice offered through Integrated Financial Partners, doing business as One Vision Retirement, a registered investment advisor. The information in this material is for general information only and is not intended to provide specific advice or recommendations for any individual. Integrated Financial Partners does not provide legal/tax advice or services. Please consult a qualified legal/tax advisor regarding your specific situation.

?

#FinancialFreedom #SavingsJourney #Retirementplanning #earlyretirement #incomestreams #investing