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How much monthly income is in your nest egg?

How much monthly income is in your nest egg?

December 15, 2021

According to the 2020 Employee Benefits Research Institute Retirement Confidence Survey (RCS), only 27% of Americans are very confident they have saved enough to retire comfortably.  This has gone up only slightly over the past few years.  There are also many workers that have not planned on how they would handle emergency expenses or health care costs in retirement

Transitioning into retirement can be a stressful time and one thing many workers want when retiring is income stability.  Three out of four retirees and workers say income stability is more important than preserving account balances or maintaining wealth according to the 2020 RCS.

We have all seen or heard advertisements promoting a retirement account balance goal of some sort.  This can be a bit confusing because a lot of people don’t know how much income they can take from that nest egg of life-time savings.  Going back to the early/mid 1990’s there was a common guideline that you could safely withdraw 4% annually from your retirement assets and have them last throughout your retirement.  There was a recent study done by Morningstar that they are now saying for a 30-year retirement that withdrawal rate may be closer to 3.30%.  This of course can change based on how your accounts are invested and age of retirement. 

Social Security continues to be a major source or retirement income for most retirees which raises concerns for many with reports about the potential for reduced benefits in the future.  For many years employers provided a pension plan to their employees so employees knew what the monthly income was going to be if they worked until retirement.  Most employers have done away with pension plans as they became too costly to maintain for employees.  Because of this, more discipline is required for individuals saving for retirement in order to achieve their future retirement income needs.  

We work with many employers to oversee retirement benefits for the employees and provide educational worksite workshops on multiple topics.  This has helped boost their retirement confidence as they prepare for and transition into retirement.  Our team also provides comprehensive retirement planning projections for select employees that are within a half dozen years of retirement, to create a retirement income plan designed for their specific situation.  This includes showing how we can make use of their employer retirement plan for future income streams and how to optimize Social Security for their family.

If you are an employer that would like to provide educational worksite workshops for your employees, or if you are within half a dozen years of retirement, give our team a call at 920-236-6587.  We can help you optimize your retirement portfolio to provide lifelong income and boost your retirement confidence.