6 – Undertake A Retirement Income Feasibility Study
This is often where “the rubber meets the road”: Can you afford the
lifestyle you seek without the risk of outliving your resources?
The issues are too numerous and calculations too complex to project
your lifetime income using a “back of a napkin.” Sophisticated
software is a must!
Your analysis will help determine the investment of your
portfolio—and serve as its benchmark of success in future years.
Project anticipated after-tax expenses based on a review of your recent expenses
- Annually recurring (food, utilities, insurance) vs. periodic (travel, auto purchases, major expenditures)
- Essential vs. discretionary
- Healthcare costs
- Maintenance of residence
- Contingency expenditures
- Increase expenses for the loss of purchasing power due to inflation
Evaluate “worst case” scenarios involving prolonged illnesses, home medical care and assisted living
Review Social Security projections
- Claiming strategies
- Options to minimize taxation
Project an achievable income stream which you cannot outlive
- Include income from all sources, e.g., pensions, real estate, etc.
- Project state and federal income taxes as an additional expense
- Match income with future expenditures
If necessary, evaluate your debt for:
- Accelerated reduction