Life starts at 60, how long will funds last?
As retirees, we need to avoid two big money mistakes commonly made by many retirees during their financial planning for retirement income for life.
No 1: Not adequately factor in year-on-year inflation for retirement income cash flow. Our passive income (e.g. dividend income from stocks) from our investment portfolio is never inflation proof or inflation adjusted. When we need to top up any short fall in our retirement income, we may then commit the bigger No 2 money mistake.
No 2: We are forced to sell assets when the market is slumping to meet shortfall in retirement income. This is definitely a Game killing move!
Uncle8888 has been thinking hard during his financial planning for Retirement Income for Life and coming out with strategy to avoid committing these two big money mistakes commonly made by many retirees.
Introducing ...
Dual Taps Cash Flow Balancing and Contingency
Tap 1:
During good times, cash flow from his investment portfolio should be able to fund his living expenses. Investment strategy will still be Growth-dividend focus to counter the effect of year-on-year inflation threat.
Tap 2:
Tap 2 is normally corked!
But, it has the financial capability to fund at least 67% of his annual living expenses at 3% inflationary rate till 80 years old of age. It will definitely help Uncle8888 to avoid committing two big money mistakes commonly made by many retirees. The remaining 33% coming from investment cash flow should not be too difficult to achieve even in worse market condition.
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