Choosing the right withdrawal strategy is a big part of rocking retirement. Knowing how you will withdraw your money each month will ease the pressure that comes with leaping into retirement and boost your confidence. The right retirement withdrawal strategy for you may not be the same as the one your friend uses, the one you just read about, or even the one your advisor recommends. 

On this episode of Retirement Answer Man, we are wrapping up our 4 part series on retirement withdrawal strategies by learning how to build a framework to find the strategy that fits your individual needs. Press play to hear how to piece together the information you have learned in the past 3 episodes to create your own income distribution plan so that you can gain the confidence to really rock retirement. 

Changing the language you use could change your mindset about retirement

Planning retirement can be like planning to have kids. You don’t often think of the sticker shock that comes with it. Learning that a comfortable retirement might cost you $5 million might give you heart palpitations. But just like with having kids, you don’t have to pay that amount all at once. This amount is spread out over the years and you have control over how much you may spend. This is why it is important to get into the right mindset. 

One way you can change your money mindset about retirement is to reframe the way you word things. Yes, you are choosing a retirement withdrawal strategy, but the word withdraw means to take away. That isn’t the most attractive thought. 

A better way to think about your financial capital is to realize that it is simply deferred income. You have been deferring this income for decades and the time has finally come to access the income that you have already earned. A simple change in wording can completely change your mindset and help you rock retirement.

To choose the right withdrawal strategy, first, consider your financial situation 

The first step to take to build your retirement withdrawal strategy is to consider your retirement situation. Think about whether your retirement is overfunded, constrained, or underfunded. To do this, compare your retirement liabilities to your resources. Consider all of your sources of income including your social capital, human capital, and financial capital. 

Next, you’ll want to consider the different withdrawal strategies that you have learned about over the past 3 episodes. If you consider each of those retirement withdrawal strategies as being on a dial from 0-10 you can then place your financial situation on that dial. Chances are you land somewhere in the middle of the dial rather than on either extreme. This means that you may want to take a moderate approach to income distribution. Listen in to hear where each withdrawal strategy lands on the dial and how that could affect your personal income distribution plan. 

Don’t ignore the qualitative aspects of retirement

Not everything in life is about numbers and this is true for retirement as well. This means that you’ll need to consider more than just your finances to create your retirement withdrawal strategy. You’ll want to consider your age, life expectancy, and health. Do you need to fit as much living as you possibly can in the next few years? Or do you need to make your money last on the chance that you live to be 100?

In addition, you’ll need to consider your family situation. Are you single or married? Do you have children? These external factors will also play a role in your income distribution plan. 

One last consideration is your personality profile. You may need more security even if you are overfunded. Every person has their own risk tolerance threshold. Whichever way you choose to distribute your income in retirement, you need to feel comfortable and confident so that you can rock retirement. Press play now so that you can learn what you need to know to develop your retirement withdrawal strategy. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [4:00] How do you find the strategy that fits for you
• [7:31] The language you use to describe things really matters
• [10:00] Think about this in an organized way
• [17:55] What to take into account to help you evaluate all the aspects
• [24:01] How does your social capital fit into the equation?

ANDY PANKO INTERVIEW

• [30:21] Why do people have so many questions about this?
• [34:20] How does Andy approach this question with his own clients?
• [36:54] How does Andy deal with tax planning in retirement?
• [44:46] Don’t let the internet scare you into doing something you don’t need

COACHES CORNER WITH BW

• [48:38] Choosing the right strategy can give you the permission to spend
• [52:08] How BW chose his withdrawal strategy

TODAY’S SMART SPRINT SEGMENT

• [59:35] Map out how you think about your quantitative and qualitative aspects of retirement

Resources Mentioned In This Episode

Check out the Facebook Live in Andy’s Taxes in Retirement group 

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center