Tim Wood, CFF
Safe Money Retirement
The Almighty Income Check
Like the Beatles said: "All you need is income."It’s essential to realize the difference between our working and retirement years. In our working years, we work for income and savings. It’s about payment and the security it brings—the almighty paycheck. In our retirement years, we want our savings to work for us and create the revenue to continue the protection in retirement; that’s the almighty income check.In our retirement years, it’s a whole new ball game with different rules and different risks. Let me show you how to guarantee yourself (or yourselves as spouses) a safe, happy retirement without the stress. In retirement, the best rule is to protect the money you need daily, to preserve that part of your portfolio that creates the almighty income check. Income is king over any other aspect of your portfolio. Unless that is, you’re so wealthy that dangerous market conditions, or even a bear market, don’t affect your overall income needs.One of the problems with the financial services industry is that they mostly pull apart instead of coming together and using all the financial tools available. In the investment world, they want to talk about investing over the long term and holding and staying in the market, and there’s nothing wrong with that if you have the time and the money to do it.However, for the other part of your portfolio that needs to generate guaranteed income, that would be an entirely different plan with guarantees to get you through any situation that may come up—in a good market, a bad call, and anything in between. This is an entirely different type of planning, generally not considered part of the overall portfolio. At Mayfield Financial & Estate Protection Services, we don’t take our “safe money” planning, pit it against an investment portfolio, and then try to convince you that one is better than the other. They are entirely separate and should be looked at separately as to what the money should be doing and what the purpose is for that money. It’s an absolute easy financial equation if you break it down to specifics about which money should be doing what.In any given year, it’s not really about how much you win but how much you actually get to keep off the win—every single year that you’re in the financial game. So if you had part of your money in a position where the worst-case scenario was a zero loss or a zero gain, this means you gain and retain last year’s earnings but don’t have to give back the following year versus acquiring a substantial amount for three or four years and then losing a sizeable amount or all of your gains.What happens with that is the portfolio will begin to implode if you’re pulling money out of it; there’s no stability there. And it would help if you had stability for the long term. Granted, it’s not as much fun as your risk money. Still, I don’t know anybody who walks into the casino with every dime they have to their name, putting it into eleven or twelve games of chance and hoping that the averages come out good for them all the time. Usually, we go to the casino with the money we can afford to lose or do something different or fun with; your “safe money” is put away where it will stay safe.It’s important to know that in this world today, there are places where you can place your money where it is guaranteed and insured; places where nobody has lost any money, and you can assure yourself a reasonable return to help get you through life’s more challenging times and life’s better times, as well.We get to keep all the gains. So it’s called “gain and retain, “not “gain and give back.”If you’re consistent with gain and retain and willing to take a zero when everyone else is losing money, then this is your type of financial planning; it’s perfect for that part of your portfolio that needs to be safe and secure, with a guaranteed income option for life and 100% of any balance at death going to the beneficiary(es) of your choice.
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