December 6, 2010

Re-engineering Retirement for Income

richardBy Richard J. Schillig, CLU, ChFC, LUTCF
Independent Insurance and Financial Advisor

Most of us used our income-earning years focused on “accumulation” of assets to be used later in life for retirement. During this accumulation phase, we always sought the best selection of investments producing the higher interest, improved yield and greatest potential for appreciation. While working, we usually had times to change our investment choices in our 401Ks or other retirement plans. Annually we checked mutual fund performance history to determine changes to our retirement nest egg to a more appealing investment option showing greater performance. We knew it made great sense to maximize our 401Ks or 403bs or other retirement plan to take advantage of employer match and tax deferral. Our focus then was on accumulation. The more money we put in our retirement nest egg, the greater potential for accumulation. Not too much thought was given to ‘how to distribute’ or take income from these retirement plans. The focus was always on accumulation.

The missing element – the distribution plan – is a vital issue today. Distribution planning is now more important than ever before. Lower interest, lower dividend yield and moderate appreciation in the securities markets – all contribute to the importance of this planning need to focus on distribution. Further – risks to our accumulated nest egg are continual and more evident than ever before. Distribution plans then must be sufficiently flexible to react to changing individual or economic circumstances. Distribution planning needs to be an ongoing process not just a one-time plan.

Re-engineering retirement planning from ‘accumulation’ to ‘distribution’ is rethinking and repositioning accumulated assets for today’s world. Preservation of those assets is paramount due to the potential for higher tax, potential for escalating health care costs, potential for much greater life expectancy.

During this final month of 2010 and continuing into 2011 we will begin our emphasis to re-engineer retirement planning focusing on that transition from accumulation to distribution. See our ad below. Call on us anytime to assist with your re-engineering process.

Medicare Annual Enrollment Period Ends Dec 31. Different from last year, there is NO OPEN ENROLLMENT PERIOD UNTIL MARCH 31 as in past years. Medicare choices for 2011 must be completed by Dec 31 this year. The choices for Medicare are Original Medicare with a voluntary supplement and prescription drug plan OR Medicare Advantage Plan. Medicare Advantage Plans are an alternative to Original Medicare and could be a very appropriate choice for Beneficiaries. We are available to discuss options, benefits as well as disadvantages to the Medicare Advantage Choice.

Enjoy this Christmas and Holidays with family, neighbors, and friends.

Richard J. Schillig, CLU,ChFC, LUTCF is an Independent Insurance and Financial Advisor with RJU and Associates, Inc. He can be reached at 563-332-2200.