“As you move from the accumulation segment of your financial life into the distribution phase, can you truly afford to take on more risk?”- Diane Marra

As I lamented in my book, Retirement Planning Made Easy, the concept of retirement has taken on some negative connotations in the 21st Century. Along with an intensely complex and obfuscated regulatory landscape, a shifting demographic calls into question the continued viability of Social Security and other safety nets for retirees. It is challenging to know what to do to ensure you will have enough money to make it through a retirement that could end up being thirty years long, maybe more.

According to the Employee Benefit Research Institute (EBRI), nearly half of all Americans have less than $10,000 saved for retirement. However, even those who have managed to do everything right, who’ve invested and saved and scrimped to build a healthy nest egg, still face a huge challenge- how to get down from the accumulation mountain without losing money.

Moving from gathering money to spending it.

Many pre-retirees are blissfully ignorant of the radical shifts in both mindset and strategy that accompany moving into the spend-down phase of retirement. As a result, they fail to regularly review and balance their accounts to create low-risk, low-volatility portfolios that can withstand market fluctuations. Undergird with streams of predictable lifetime income, safe, sustainable retirement is not achieved with a hands-off approach. The nearer you get to the spend-down phase of your life, the more you’ll find that the rules have changed. At this juncture, the conventional planning which brought you to this point will no longer serve you well. You can’t afford to discount the value of distribution planning because if you do, you may wind up running out of money long before you die.

Why you need retirement income planning.

Defined as orderly and strategically-timed spending of one’s assets in retirement, retirement income planning should start shortly before you stop working. There are many things to consider when putting together this blueprint, and you cannot afford to leave anything to chance. Also, since old habits tend to be hard to break, defining your retirement and income strategy should start sooner rather than later.

It’s tough for most people to change their mindsets and break free from the notion that “growth and returns are everything.” However, what you earn on your investments, while still a consideration, is much less critical once you are retired. You may be looking at thirty years (or more!) without an employer’s paycheck. It’s up to you to do everything in your power to avoid losing any of the money you’ve worked so hard to save.

You may need a “specialist” to guide you.

The financial advisor who helped you in the accumulation phase of your life is probably very good at what they do. However, since most advisor training centers on making money rather than spending it, accumulation-focused advisors and planners often lack the tools and skills necessary to create efficient spend-down models. Advisors who have spent much of their professional lives helping clients chase down returns may be ill-equipped when retirement day arrives. For these reasons, it may be time to add a retirement and income specialist to your team. A safe money advisor specializing in products such as annuities, life insurance, CDs, and other low-risk instruments, understands the unique aspects of “de-cumulation.” They can help you discover ways to grow your money safely while guarding against risk, inflation, and other threats to your savings.

The Bottom Line: Diligence and good planning got you to a place where you are ready to enjoy the rewards of your hard work. You must now do everything possible to safeguard your wealth and ensure that your retirement money lasts as long as you do.  Finding your safe money and income-trained advisor is the first step in creating a retirement that is more prosperous, less stressful, and a lot more enjoyable.