Wealth Management & Financial Planning

Wealth Management & Financial Planning

Income vs. Assets

The changing seasons certainly rank high on the list of the best things about living in central Indiana. Every three months brings a change in temperature and weather patterns that reminds us that time is moving forward, and nothing lasts forever. Right now, kids are out of school, pools are open, temperatures are rising, and baseball is in full swing – summer is here. But as we all know, this time in the sun is temporary, and before we know it, school will be starting back up, and the fall chill will set in. While we have seasons that change every year, our lives are made up of changing seasons as well. No season of life will last forever, and retirement requires a change in how you think about your investments.

For the majority of your life, you work hard and save your money. Then you get to retirement, and the rules change immediately. You no longer have earned income, and you must rely on the assets you accumulated to replace your standard of living.  You must also be comfortable with the fact that the statements you have been receiving that showed the fruits of your labor and the sacrifices you made to achieve those savings may now begin to fluctuate as you start receiving distributions.

This is ok. In fact, this has been the plan all along. You are entering into a new season of life. As a financial planner who works with dozens of families who have entered retirement, I am conscious of the mental and emotional hurdles that must be conquered to separate from the workforce. I help my families understand that the values on the investment statements may have been the focus during their time of working and saving, but now the most important factor for retirement is income.

Many people reading this may have a pension. As long as the pension continues to send you your monthly check, you have no concerns. Pensions are paid out from an investment fund that is moving up and down with the market, but you are not able to easily look behind the curtain to see how the fund is performing with varying market conditions. Not seeing these changes on a daily, monthly, or annual basis provides peace of mind – you receive the check, and life is good.

I tell my retiring families to think of their personal investment accounts as their own personal pension funds. They tell me how much they need, and the money is sent like clockwork to their bank accounts to support their standard of living. Yes, the accounts will fluctuate up and down with the market, but with proper planning and investment strategies, the income they need will arrive on time every month for as long as they need it.

It will take some time to adjust to this new season of life. For a successful retirement experience, focus more on the income your investments provide and less on the value you see on the monthly statement.

Financial Enhancement Group is an SEC Registered Investment Advisor. Securities offered through World Equity Group, Inc. Member FINRA/SIPC. Advisory services can be provided by Financial Enhancement Group (FEG) or World Equity Group. FEG and World Equity Group are separately owned and operated.


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