FOR LONG TERM PLANNING, BEGIN WITH A PURPOSE IN MIND

Get Your Retirement Income On Track

What is the underlying premise for all long-term savings? Why are we giving up current enjoyment of our income? The answer is to have an income stream in retirement. It makes sense to learn how retirement income streams work economically and define how to allocate your savings today. The sooner you get on an efficient path, the greater the impact you have on your retirement income streams. Let Destination Retirement help today.

The Retirement Income Dilemma

INTERVIEWS FOR RETIREMENT NEWS ONLINE

Testimonials

"My husband and I have been working with Michael for the past 10+ years. He carefully guides us in planning for our financial future and we are confident we are preparing wisely."
Lisa C. MarkowitzCPA
"The decisions we have made with Mike’s guidance have been proactive and have prepared us to calmly and intelligently reach our retirement goals. I enthusiastically recommend starting this journey as soon as possible to have the maximal future impact."
Dr. Prody & Dr. Kathleen VerverelliMDs
"Michael has been a great help to my family and to many clients in financial planning matters. He is very professional and knowledgeable and has consistently exceeded all expectations."
William FriesAttorney
"I have been working with Mike for over 10 years. As we now begin to further execute on plans, everything that was planned and promised has happened! I never worry or lose a minute of sleep concerned about my financial future because of the work he has done."
Ed KornerbergerIBM VP of Industry Sales (Retired)
"My wife and I have been working with Mike for nearly 15 years. He has guided us through all phases of our lives — Pre-kids, kids, and now kids getting ready for college. He anticipates and counsels proactively vs. reactively. We feel confident that we will not out live our money."
Jason ProbstBusiness Development, D&B Public Sector
"As we are nearing retirement, we began questioning how we could survive retirement when you hear the many horror stories about running out of money. My wife and I really like how Mike ensures that our retirement strategy has fail-safes for market fluctuations, because we know how stressful up and down stock market investments can be... We look forward to our retirement and working with Mike."
John LaulCorporate Vice President, New York Life
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Learn About Planning

Product vs. Strategy

The key is to have the skill and technique to combine different products together to create efficiency. We all have a finite amount of money to work with so we have to be as efficient as possible to create the highest and most reliable income stream in retirement by utilizing our Two Economic Powers® approach.

MIKE SEIBERT ON RETIREMENT

Four Stage of Investments in Retirement
Four Stages of Taxes in Retirement

LOOK INTO YOUR FINANCIAL FUTURE​

Want a quick look into your financial future without the hassle of filling out piles of paperwork or sitting through countless hours-long meetings? Use our 9 To Know analysis that takes just nine pieces of your contact and financial information and tells you if you’re on track for the retirement you want. Then, if you aren’t on your way to that picture perfect future, we can help. 

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A Thought on Retirement

“Our approach to saving is all wrong. We need to think about monthly income, not net worth.”

Dr. Robert C. Merton

American Economist
Harvard Business Review Contributor
Economic Sciences Nobel Prize Laureate

Longevity and Distribution Rates

The Two Main Retirement Income Problems

Longevity

We do not know how long we are going to live. If we knew this, then retirement planning would be easy. By simply dividing the number of years into the total amount of retirement assets, you would find your retirement income. So, do you plan for the best or the worst-case scenario? Whichever you plan for, does that increase or decrease your distribution rate?

Distribution Rates

Determine a distribution rate before knowing the rate of return of our Retirement Assets in any given year.

Most traditional retirement plans show a constant rate of return vs. variable return. How do Retirement Assets react to fluctuating rate of returns? We have no idea what our sequence of returns will be the day we retire. What if your portfolio loses 10-15% in a given year, what is your plan of action for the following year?

Let's Talk Twos

Two Economics Powers® Approach

Investments and Actuarial Science

The key is diversifying where you put your retirement savings. Using these TWO POWERS together can create higher retirement income streams. In doing this, you will create a situation with multiple savings sources. This allows you to withdraw yearly income from different areas in your retirement years from a more stable savings base.

Most people used to get both powers by default through defined benefit pension plans. As defined contribution plans such as the 401(k) and 403(b) became more popular, very few people continued to have the security of a pension plan. It is no longer your employer’s responsibility to fund your retirement. Very little education has been given to individuals regarding what they must do to provide for themselves the day they retire.

Two Pre-Retiree Wealth Building Questions

How much do I need to save?

Where do I need to put it?

Read More Below

Two Parts to the Climb

Accumulation and Distribution

Think of it like climbing a mountain. What’s the objective? Is getting to the top the objective? Or is it really getting to the top then making it back down safely the ultimate objective? This is a metaphor for our financial lives. Getting up the mountain is our Pre-Retirement/Accumulation phase and getting back down is our Retirement/Distribution phase. The key is this one continuous journey. Understanding how retirement income streams work (distribution) defines “how you pack your bags” in Pre-Retirement.

If you were going to climb a mountain, would you get a guide? What if the guide said they could get you to the top of the mountain, but they weren’t sure how you were going to get back down? Would you continue to use that guide or find another one? Let us be your guide to all things retirement.

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Thinking About Retirement Planning

Why is this Strategy So Important?

Longevity

All of us only have a finite amount of money. Inefficiencies cause major losses to occur. We must be efficient in where we allocate our money in the short time we have to save for your retirement plan.

Inefficient losses can be reflected in:

  • Lower Current Lifestyle
  • Lower Retirement Income
  • Inadequate Protection
  • Loss of Financial Control
  • Financial Vulnerability
  • Higher Taxes and Fees
  • Less Benefits
See Example

Effective Planning

How Significant is Efficiency?

Someone might be able to create $75,000 a year of retirement income based on current savings with an inefficient process.

The same individual could create $125,000 a year of retirement income with an efficicent process using the same amount of savings.

See Example

Learn About Planning

Inflation's Impact

Let’s say you saved $1,000,000 at the time of your retirement. Traditionally you take out the safe annual withdraw rate,  3-4%, a year which is $30,000 – $40,000. With the inflation adjustment, people who make $100,000 yearly to support their lifestyle today need to be making $180,000 annually in 20 years with 3% inflation.

The Problem with One Economic Power® (Traditional Financial Planning)

The 3-4% Rule

Let's say you saved

$1,000,000

at the time of your retirement.
3-4% a Year is

$30k – $40k

(the safe annual withdrawal rate)

EXAMPLE OF HOW MUCH YOU'LL NEED TO ACCUMULATE IN ORDER TO SUPPORT YOUR LIFESTYLE AT RETIREMENT

With Inflation Adjustment

If you make

$100,000

to support your lifestyle today.
You'll Need

$180,000

annually.

For the desired lifestyle of $180,000 and at a 3.5% distribution rate, you will need to accumulate

$5,000,000

in assets to retire and maintain your current lifestyle.

How feasible does this path sound running your own numbers? Is this the path you would want to stay on if you had the choice?

PROJECTED ANNUAL RETIREMENT INCOME

Effective Planning

If You're 40 Now

Let’s say that your current income is $150,000 a year. At age 65, with 3% inflation, your adjusted income needs to be $314,067 a year to maintain your current lifestyle.
If You Currently Have

$400,000

saved for retirement.
And you continue to save

$16,500

each year at a 6% annual interest rate.
When you're 65, you will have

$2,676,329

saved.
Withdrawing 3.5% annually you will only have

$93,671

a year in annual income to live on at age 65.

Effective Planning

If You're 50 Now

Let’s say that your current income is $200,000 a year. At age 65, with 3% inflation, your adjusted income needs to be
$311,593 a year to maintain your current lifestyle.

If You Currently Have

$1,250,000

saved for retirement.
And you continue to save

$20,000

each year at a 6% annual interest rate.
When you're 65, you will have

$3,489,148

saved.
Withdrawing 3.5% annually you will only have

$122,120

a year in annual income to live on at age 65.

The problem in many cases isn’t the accumulation of money in retirement plans like 401(k)’s, but the low distribution rates we could be on track for if that’s all we do. What if today you could put yourself on a path that provides higher distribution rates from the retirement assets you’re accumulating? It is possible using our Two Economic Powers® approach.

*Hypothetical illustration may not be used to predict or project investment results.

The Solution

Approach your yearly retirement income with the Two Economic Powers® Strategy.

See an Example How

Comparisons

Two Economic Powers® Examples

The example below uses the same amount of savings to generate annual Retirement Income Comparisons. Actual results may be more or less favorable.
wealth building cornerstones logo
  • Total Income:
  • Amount Guaranteed:
  • Approximate Years of Volatility Buffer:
One Economic Power® Strategy
Retirement Assets Only
  • $174,519 a year
  • $0 a year
  • -

Two Economic Powers® Strategy

Covered Assets Option
  • $376,112 a year
  • $340,398 a year
  • -
Volatility Buffer Option
  • $374,460 a year
  • $0 a year
  • 5.4 years
wealth building cornerstones logo
  • Total Income:
  • Amount Guaranteed:
  • Approximate Years of Volatility Buffer:
One Economic Power® Strategy
Retirement Assets Only
  • Total Income: $174,519 a year
  • Amount Guaranteed: $0 a year
  • Approximate Years of Volatility Buffer: -
  • Total Income:
  • Amount Guaranteed:
  • Approximate Years of Volatility Buffer:

Two Economic Powers® Strategy

Covered Assets Option
  • Total Income: $376,112 a year
  • Amount Guaranteed: $340,398 a year
  • Approximate Years of Volatility Buffer: -
Volatility Buffer Option
  • Total Income: $374,460 a year
  • Amount Guaranteed: $0 a year
  • Approximate Years of Volatility Buffer: 5.4 years

What is a volatility buffer?
The system by which an individual can protect their assets in the event of market unpredictability immediately following retirement.

For More Information

Let’s Chat About Your Retirement Income Plan

Just answer a few simple questions to see how well prepared you are for retirement and we’ll get in touch to find the very best plan that fits your lifestyle and financial concerns.

You’ll also receive a complimentary white paper featuring eight core ideas to retirement income planning, written by retirement income expert Dr. Wade Pfau.

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Suite 140
Allentown, PA 18104

Email Us

mseibert@1847financial.com
rsnyder@1847financial.com

Call Us

610-360-8187
484-275-6035

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Resources

Retirement Planning Resource Hub

Watch the Video to Learn About Retirement Planning With Two Economic Powers®

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About

Michael J. Seibert

RICP®, CLU®, ChFC®, CAP®, LUTCF

Michael helps people achieve a higher and more predictable retirement income stream using his proprietary economic based process. As a Retirement Income Certified Professional® from the American College of Financial Services®, Michael effectively manages the transition from asset accumulation during a client’s working years to asset distribution in retirement. RICP® enables Michael to demonstrate tremendous value by delivering smart strategies for creating secure, sustainable income for a client’s retirement.