When to draw income from retirement to avoid financial ruin

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Janeen is joined by Brian Decker, Owner and Founder of Decker Retirement Planning on ABC4 Utah to talk about the right and wrong way to draw income from your retirement accounts.

There is a right way that will allow you to stay in retirement and a wrong way that will force you back to work or require you to live with your kids.

The right way is to allocate about 70% of portfolio assets to safe accounts and draw your portfolio income from principal guaranteed accounts. 

  • Ladder short-term Cash, 3-5, 5-7, and 7-10 year principal guaranteed accounts and draw from those accounts for the first 20 years. 
  • Allocate 30% to Risk so it can grow, untouched, for 20 years. 
  • As you draw income from principal guaranteed accounts over 20 years, when the markets crash, it does not affect you.
  • AND the Risk money, that 30%, replenishes your starting balance in 20 years! 
  • That is Distribution planning!

The wrong way is to follow the advice of the bankers and brokers and use the pie chart as your distribution vehicle and draw income from a fluctuating account. Here is what happens, mathematically, when you draw income from a fluctuating account: You compromise gains as the markets go up and you accentuate losses when markets drop. You ARE committing financial suicide when you do this. 

When you have all of your money at risk in the pie chart, the next 40%+ market drop will be a life-changing event and will send millions of retirees back to work, just like in 2008.

Be sure to contact Brian and the team at Decker Retirement Planning to help you with your retirement questions. Brian and Decker Retirement Planning will help you plan for your retirement future. Visit their website for additional information.

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