Surveys have shown that people are more afraid of running out of money before they die than they are of death itself. That makes sense to me: what are you going to do if you’re 80 but you live to 95? Have the kids take care of you? The state? None of that sounds appealing!
Therefore, you need to have sufficient retirement income. One’s retirement income requirements boil down to the answers to these two questions:
A. What do I NEED my retirement income to do?
B. What do I WANT my retirement income to do?
For all of us, the answer to A is the same.
We NEED our retirement income to cover our basic living expenses: food, shelter, utilities, transportation, etc. These are the things that we NEED in life. Every pre-retiree’s goal should be to establish enough guaranteed lifetime income to cover their basic living expenses. The income must be guaranteed AND it must be for life.
The answer to question B will be different for everyone. These are the things that people think of when they think of retirement. For some it might be travel, for some it might be golf. Perhaps it’s spending more time with the grandkids or volunteering.
I help people figure out what income they’ll need to achieve the income that they’ll require to achieve both A and B. Then the next step is to determine the path necessary to accomplish this and the tools required to do so. Everyone or couple is different, so this is far from a one-size-fits-all approach. No cookie cutters are allowed here!