Three Retirement Principles And One Company Are Changing How We Prepare For Retirement

April 30, 2021

PROVO, UT / ACCESSWIRE / April 30, 2021 / At the end of a long and fruitful career, it can be difficult to decide what to do next. You might consider that you have nothing left to accomplish, or that your life is simply too busy. But retirement doesn't need to mean an end, but rather a new beginning. With so much uncertainty in today's world, it is more important than ever to plan for your future and take control of your financial situation.

For many, planning your retirement with an advisor can feel like an awkward dance. You're not sure if the advisor is biased from commissions. Are you getting advice that works for the whole picture (investments, taxes, and estate planning)?

Jellyfish Wealth and its principles are taking a different approach to retirement planning. Anyone interested in working with Jellyfish Wealth will start by running their numbers through The Retirement Builder, a retirement calculator intended to give you the big picture. No conversation with an advisor or salesperson necessary.

If you want to proceed, you can work with one of their retirement pros that are only paid by salary (a big difference from the rest of the industry). In one place, you can discuss and organize your investments, taxes, and estate plan.

According to the Jellyfish Wealth founder Mike Decker, the foundation of retirement is within the principles of retirement. They are:

Let's dive in and discuss each one.

The Principle of Income

The principle of income suggests that you only draw retirement income from accounts that have not received significant losses. Failing to do so may have negative effects on your income and assets, and may ultimately compromise your retirement.

Let's say you have $1,000,000 in retirement, and you need to take $40,000 out as income each year to support yourself. Your account makes 6% ($60,000) in year one, and you take $40,000. No problem because the account went up. You drew income from an account that had made money.

Now let's do that again, but let's say your account went down 6%. Your $1,000,000 is now $940,000. On top of the loss, you take $40,000 as income. Now you have $900,000. That's 10% down overall. Recovering when your account is down 10% is not a position you want to be in.

If your account goes down 10%, it'll take 11% or so to recover. If your account goes down 20%, it'll take a 25% return to break even. If your account goes down 40%, which can happen every 7-8 years as previously discussed, it would take a 66.7% return to get back to where you started. The bigger the drop, the more difficult the recovery can be.

When you take income from an account that has lost money, you are accentuating the loss and ultimately slowly whittling away your income for retirement. Hoping for a swift and strong recovery is nothing more than wishful thinking. People win the jackpot in Vegas every day, but you might not want to bet your retirement on it.

This principle does not suggest that you lock up 100% of your assets in CDs, Bonds, Annuities, or any other asset that can't lose money. All it suggests is that when an account is down, try not to draw income from it until it has sufficiently recovered. Notice the word account. It is not being suggested that you only take income from investments that make money. Accounts are objective-based. More on this in the next principle.

For now, consider having some of your assets in accounts that can't lose money. That way, when markets go down, you have a place to draw income until your other accounts recover. If the markets are up, by virtue of this principle, you can draw income from any account you want.

The Principle Of Diversification

The principle of diversification suggests that you diversify your assets by objectives, like taking income, minimizing taxes, leaving a legacy, buying a boat, or whatever else you may want in retirement. Failing to diversify by objective may lead to too much risk, a lack of liquidity, or many other situations that can compromise your retirement.

There is no one-size-fits-all investment. Between the investment types (ETFs, Mutual Funds, Annuities, CDs, etc) and the account type (Pre-tax, After-tax, and Tax-free), you can start to paint a picture of how to group them together and create specific objectives. Objectives range from big purchases and lifestyle plans to providing consistent income and minimizing tax burdens.

The Principle Of Planning

The principle of planning suggests that predetermined guidelines increase your probability of future success. Failing to set guidelines can lead to a reactive future and eventually compromise your retirement.

You do not truly have control over your assets unless predetermined allocations and objectives are set. Otherwise, you are subject to the whims of fate. The number one objective of any retirement plan is to make sure you can support yourself and your lifestyle until you pass. Once that objective is calculated, you can begin to set guidelines and procedures on how to minimize your taxes. You can even set aside funds that are intended to grow and support the grandkids' college educations, a charity donation, or whatever else you want. This is your story.

A retirement plan should be able to tell you what your income is expected to be in 5 to 10 years. It should be able to tell you how you will take your income when the market crashes. A retirement plan should be able to guide you on how to minimize your tax burdens each year. The list goes on. All of these "should" statements lead to one main theme. Clarity on what to do and what to expect.

One of the biggest mistakes Jellyfish Wealth sees many retirees make is that they believe the growth plan they have used for 40+ years will work in retirement. That plan has one objective, and that is to grow. Once you receive your last paycheck, the rules change. Your growth "plan" can become a house of straw or sticks. Don't guess your way through retirement. Put a plan together.

In Conclusion

Retirement is meant to be a time you can enjoy life. But it's also a time when you'll need to be more vigilant than ever before about your finances and how they are managed because the stakes have never been higher.

When you are guided by principle, you increase your probability of success. If you are feeling stressed about retirement, get rid of the ambiguity and try The Retirement Builder, by Jellyfish Wealth. See what your retirement could look like in 5 min or less without even talking to a retirement pro.

If you want a copy of the book, Principles Of Retirement, you can click here to get a free copy.

Media Contact:

Company Name: Jellyfish Wealth
Contact Person: Mike Decker
Phone: 801-998-2404
Location: Provo, UT

Clear Retirement News

Jellyfish Wealth brings together a team of skilled professionals to help you manage the key components of your retirement strategy. Insurance services offered by Jellyfish Wealth, LLC. Advisory, tax, and legal/estate planning services are offered through our network of Advisors, CPAs, and attorneys selected to work with Jellyfish Wealth clients. None of these entities are affiliated companies.

Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

Insurance product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Investments, life insurance, and annuity products are not FDIC insured.

SOURCE: Clear Retirement News

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