While you’re working, your income helps to create the income you live on once you’re not working.
It’s common practice to consult a financial adviser in the hopes of making the proper investment for a retirement fund.
However, Charlie Jewett of Renovating Retirement says it’s far better to create a retirement plan around the lifestyle you’d like to have once you are no longer working.
“The nest egg you build up while you’re working, you take streams of money that you’re making and you put them away, hopefully build up a chunk. Then you retire and you have this chunk, and what do you have to do? You have to turn it back into streams,” he said. “The income piece is solve for. It’s actually very mathematical.”
Look at 12 months of bank statements, add up the withdrawals, and figure out how much you spend to live.
Then, take a look at and add up your sources of income, such as social security, pensions, annuities, and rentals.
The goal is to make sure you’re not spending more than you make, or outlive your retirement savings.
It is really important to understand all of the options and to educate yourself on the different tools available to make sure you know what you want before talking to an adviser.