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Retirement Income Strategy

As a Chartered Retirement Planning Counselorour approach to Retirement Planning encompasses the use of the common “Three Bucket Approach”. This strategy requires assets to be apportioned into distinct categories, each with a range of investments meeting specific needs designed with the goal of funding cash flow requirements during retirement.

“Bucket One” is conservatively crafted designed as an umbrella for the proverbial rainy day or emergency fund. This bucket contains short term investments that are akin to cash. As a result, these assets are expected to generate relatively low returns.

“Bucket Two's” goal is to provide “guaranteed income” for “must have” expenses. The expenses in this bucket may vary, depending on one’s specific situation, but may include home mortgage, property taxes, and insurance; auto payment and insurance, health insurance, and/or household utilities. Annuities with a living benefit rider that provide “lifetime income payments” is a strategic option that may be used for this bucket. There are several types of annuities that can be used as the income vehicle. As an example, one type guarantees "income for life" then increases the income in the event a "long term care" need arise. In essence, the type of annuity selected for you will depend upon your stability and immediate need.

“Bucket Three” seeks to provide moderate growth for income needed for “discretionary expenses”. It is riskier than bucket one and two, and may be invested in a diverse mix of domestic/international growth and dividend oriented investments.

The “Three Bucket Concept” isn’t for everyone. More than often it adresses the goals of many approaching retirement, as well as retirees. Those for which the concept is not appropriate receive a personalized strategy consistent with their income needs, risk tolerance and suitability. Our “Three Bucket Approach” is augmented by our firm’s “Investment Management Strategy”. When implemented together both strategies strive to provide confidence pursuant to the needs and goals of many investors.

No strategy assures success or protects against loss.

Fixed annuities are long-term investment vehicles designed for retirement purposes. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to 59 1/2 are subject to a 10% IRS penalty tax and surrender charges.

 Riders are additional guarantee options that are available to an annuity or life insurance contract holder. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policy holder should review their contract carefully before purchasing. Guarantees are based on claims paying ability of the issuing insurance company.

Stock investing involves risk including loss of principal.

International investing involves special risk such as currency fluctuation and political instability and may not be suitable for all investors.

The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.


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