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Retirement Planning has changed, have you?

By Steve Gaito

McDowell Countysteve gaito Mcdowell county retirement resource management


I recently heard that if you ask 50 Financial Advisors the best way to create your retirement plan you would get 50 different opinions. However, if you were to go to academia, the people that study the facts keep coming up with one way that is the best. So, what is the best way? I will get to that in just a moment. Let’s first look at the history of retirement planning. If you go back 30 years you see a very different environment. There were two primary sources of income for retirement. The first which is still true today is Social Security. The second was that there were pensions that provided the security that people relied on to provide income for life. This framework allowed people to have a consistent income that was very similar to what they were used to while working. When you combined the income from Social Security and pensions it covered between 70-100 percent of the pre-retirement income. In the 1980’ we saw the beginning of a shift from pensions to 401(k) plans and with that came the responsibility of creating your own plan. The investment world loved this because they are paid by assets under management and the larger the account the larger their income. Now don’t get me wrong. I believe that there is a place for having your money managed and a good investment advisor is a critical part of your retirement team. The challenge is that the skill set for planning for income in retirement is different from managing your investment portfolio. The bottom line is that a portfolio does not give the same security that a pension did. This may be the reason that so many people are anxious about running out of money in retirement. When you combine this with other factors like inflation, taxes, and health care it is easy to see why most are not confident about retirement.

This is the reason that so academia like the American College for Financial Planning, Wharton Business School, and many others agree that creating income that you cannot outlive is critical to retirement. They all agree that one of the greatest risks that everyone faces is longevity and creating income that you cannot outlive addresses this risk. This means that you take a part of your savings and use them to create this income. Logically this makes sense because most people save the money all through their working years to fund their retirement. The research also shows that simply replacing your bond allocation in traditional portfolios with an annuity will yield better performance with less risk. This is one of the biggest takeaways that I get from this research. It allows you to keep a 60/40, 50/50, or 40/60 portfolio depending on your risk tolerance and leverage the research to your advantage. It also lets you be more aggressive with the stock portion while minimizing the fixed-income side of the allocation.

I have just partnered with Tom Henga, who is an economist, writer, Retirement Income Expert, and much more to provide webinars on demand. These webinars detail the facts that the research supports and if you invest 45 minutes will change your view on retirement and allow you to enjoy retirement to the fullest with less stress. To take advantage of these webinars go to my website and sign up to watch them. I love the one Don’t Worry/Retire Happy as that is what I find most want to do in retirement. The reality is most would rather spend time traveling or with their grandchildren instead of having to delay enjoying this time because the market is down. It does not have to be that way and I can help. So, watch the webinar and give me a call. Let me help you take the stress out of retirement.


Steve is the owner of Faith-Based Health Care and Retirement Resource Management. He is a National Speaker on the topic of Social Security optimization, quoted in national publications like Money Magazine, US News and World Reports, and Fox Business. Steve loves to educate and teach on financial topics like taxation of retirement accounts, long term care, healthcare, and efficient savings plans for small businesses. He has provided financial planning for missionaries through the International Mission Board. You can find Steve at 68 South Main St. in Marion, NC by calling 828-559-0299, email or visit his website at

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