Cover Your Retirement Income Bases With Scenario Planning

Here are three strategies to help you plan for best- and worst-case scenarios, positioning you for retirement success.

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If you’re like most Americans, you’re undersaved, underplanned and underprepared for retirement.

In fact, 55% of employed Americans surveyed by say they are behind on their retirement savings goals. The stock market, which declined significantly in 2022, was a definite stressor for savers, with the average 401(k) balance down by 23%, according to financial services behemoth Fidelity.

Fortunately, there are steps you can take before retirement to remedy these deficits. Deciding when to retire and when to claim Social Security are two important decisions you’ll need to make. You’ll also need to identify other sources of income in retirement, such as how you’ll draw income from the savings you’ve worked so hard to accumulate during your working years.

One crucial aspect of retirement planning that is frequently neglected is creating a retirement budget. That budget will be similar to — but different from — the spending plan you follow during your working years. That budget is critical because you can’t know how much income you need and for what until you understand what you’ll be spending in retirement. In other words, you can’t make a retirement income plan without putting a spending plan or budget in place first.

In this article, I offer three strategies designed to help you build a retirement budget. The first strategy covers the types of expenses you’re likely to have in retirement. The second strategy offers advice on how to prune that budget down to a worse-case scenario and up to a best-case scenario. Then, the third and final strategy helps you figure out the middle road that will position you to meet your essential needs while enjoying the extras that create retirement memories.

Chuck Bigbie, CLU, ChFC®, CFP®
Wealth Manager and Principal, Woodland Wealth Management, LLC

With 40-plus years of experience in the industry, Chuck specializes in retirement planning and an outcomes-based approach to wealth accumulation and financial planning. Understanding and thoughtful, he is committed to always put clients’ needs first and providing them unbiased advice. His desire to spread financial literacy and to never stop learning drive him in his everyday responsibilities. He enjoys getting to know his clients and is energized by working with them and helping them find the right retirement strategies for their unique needs.

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Securities offered through Geneos Wealth Management, Inc. (Member FINRA/SIPC). Advisory Services offered through Geneos Wealth Management, Inc. a Registered Investment Adviser.