Retirement Income Planning

What is Retirement Income Planning?

Watch as Erin Kennedy and Tom Fortino from Alpha Wealth Group discuss the importance of creating a conscious spending plan for retirement. Tom discusses the essence of building a solid financial foundation that provides a dependable and lifelong income source. Learn how to bridge the retirement income gap, eliminate the fear of outliving your assets, and enhance your quality of life in retirement. Don’t miss this insightful discussion on securing your financial future.

Tom Fortino is a dedicated retirement income planning professional and trusted fiduciary investment advisor. He proudly serves successful individuals, families, and driven business owners throughout the Chicagoland area with comprehensive financial and retirement planning. Have a retirement income question? Contact Tom’s office today for a complimentary 60-minute meeting.

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Transcript:

Erin Kennedy (00:16):

Hello, and welcome to Retirement Wealth Academy. I’m your host, Erin Kennedy. Thanks for being with us. This show is dedicated to helping retirees and pre-retirees sort through some of the most complicated topics about retirement. And for the answers, we turn to local experts. Today, we have Tom Fortino with us. Tom, it’s good to see you again.

Tom Fortino (00:32):

It’s great to be here, Erin. Thank you.

Erin Kennedy (00:34):

I want to talk through the importance of creating a spending plan. I know this is something that you specialize in, but this is a really important component in retirement. Why?

Tom Fortino (00:45):

It’s tough to say sometimes when you say it’s a really important, I would say it’s the most important, to pick one thing, because we need to have income, income that doesn’t run out. You look at these studies, Alliant, SEDI, it’s no surprise that the number one fear among retirees is outliving their assets.

Erin Kennedy (01:02):

Of course.

Tom Fortino (01:02):

In fact, LIMRA came out recently with a study that showed four in 10 retirees are working in retirement, out of need. And this is unfortunate. It really is truly unfortunate. So the idea is, as part of the plan, one piece of it, and as I said, the cornerstone of the plan, is to create income you can’t outlive, income that is not dependent on the market, income that doesn’t matter whether or not you have investments, and income that lasts, again, no matter what age you are.

Erin Kennedy (01:25):

We have to figure out that paycheck that we were used to receiving when we were working, right?

Tom Fortino (01:30):

Sure. It’s about replacing the paycheck. The paycheck goes away, but guess what? The expenses don’t.

Erin Kennedy (01:35):

Right. Of course.

Tom Fortino (01:36):

Mortgage, property tax, maybe both. Healthcare, of course, a big one. You’ve got food, clothing, and hopefully, money for the things you enjoy doing, right?

Erin Kennedy (01:46):

I’m assuming that an important part of the calculation is also figuring out the right withdrawal rate. How do you help clients figure that out?

Tom Fortino (01:54):

Yeah, part of it, from the investment piece, the first part of it is building that foundation. What I mean by that is maximizing or having the right decision when it comes to that social security claiming strategy. That is a lifetime income. If you have a pension, understanding these are irrevocable decisions. Beyond that, there are other ways to create what I like to call sometimes a private pension or income, again, that will come in for your life and if you’re married, joint life income, real important. And then, to the extent you need to use your investments to supplement, yeah, there’s ways that you can take out of different buckets to minimize the taxes and, of course, with the goal of having the money last your entire life.

Erin Kennedy (02:30):

So how do you solve the problem then of what’s known as the retirement income gap?

Tom Fortino (02:35):

Well, the first part is let’s eliminate the gap.

Erin Kennedy (02:38):

Yes. Let’s.

Tom Fortino (02:40):

If we can do that, and that’s the first goal, and there’s ways to do that. So the approach is let’s make that gap as small as possible, I should say. And also, the less, I’ll make a statement here, the less you rely on your investments, which can go up and down with the market, with there is some risk and volatility, the less you can rely on your investments, the stronger your retirement plan is going to be. So this is really, again, you just put these pieces together, and it makes sense. And then, you have an income plan, and you can go from there.

Erin Kennedy (03:06):

And then, you solve the number one fear of outliving your money, which increases quality of life, right?

Tom Fortino (03:10):

Once you check the box on that part, we can start working on the other things, like minimizing taxes, protecting assets, having a smart investment plan. This is really how you start to build a plan.

Erin Kennedy (03:22):

Perfect. All right, Tom, thank you so much for your expertise with this. I appreciate it.

Tom Fortino (03:24):

Thank you, Erin. It’s great being here.