Should I Still Use the 4% Rule?

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For decades, retirees and financial planners have relied on the “4% rule” as a guiding principle for safe withdrawal rates in retirement. First introduced in the 1990s by financial planner William Bengen, this rule suggests that retirees can safely withdraw 4% of their portfolio in the first year of retirement, adjusting for inflation each year thereafter, without running a significant risk of outliving their assets. While this rule has been a cornerstone of retirement planning, it is increasingly clear that a one-size-fits-all approach does not fully address the complexities faced by high-net-worth (HNW) retirees.

High-net-worth retirees often have unique financial circumstances, including larger and more diverse portfolios, more complex tax situations, multiple sources of income, and varying legacy goals. These factors make it essential to go beyond the 4% rule and consider more sophisticated income strategies that can provide longevity, flexibility, and tax efficiency. 

At Agemy Financial Strategies, we’re experienced in crafting retirement plans that help affluent individuals and families maintain confidence in their financial futures while achieving their lifestyle goals.

In this blog, we explore why the 4% rule may not be sufficient for HNW retirees and present a variety of income strategies designed to help optimize retirement security and flexibility.

Why the 4% Rule May Fall Short for High-Net-Worth Retirees

4% Rule

While the 4% rule provides a useful starting point, it has notable limitations, especially for HNW individuals:

  1. Market Volatility and Sequence of Returns Risk: The 4% rule assumes a relatively predictable market performance, but retirement portfolios are vulnerable to sequence-of-returns risk: the danger of experiencing poor market returns early in retirement. For retirees with larger portfolios, even a small percentage decline can translate into significant dollar losses. HNW retirees often have more to lose in absolute terms, and protecting wealth against market volatility becomes a primary concern.
  2. Longevity Risk: High-net-worth individuals, who often have access to superior healthcare, may have life expectancies well beyond traditional assumptions. The 4% rule, based on historical returns, may underestimate the capital required to sustain 30-40 years of retirement, especially if healthcare or lifestyle costs increase over time.
  3. Inflation Sensitivity: The 4% rule accounts for inflation, but it may not adequately address the impact of sustained high inflation or rising costs in specific categories such as healthcare, travel, and philanthropy, areas often significant in the lives of affluent retirees.
  4. Tax Considerations: High-net-worth retirees often have complex portfolios, including taxable accounts, tax-deferred retirement accounts, and tax-free vehicles like Roth IRAs. A fixed 4% withdrawal does not account for the tax consequences of selling assets in a particular order or the opportunity to optimize tax efficiency over the course of retirement.
  5. Lifestyle Flexibility and Legacy Goals: Many HNW retirees wish to maintain an active lifestyle, make charitable contributions, or leave a substantial inheritance. The rigid framework of the 4% rule does not provide flexibility to prioritize spending or legacy objectives over strict adherence to a fixed withdrawal rate. 

Because of these limitations, high-net-worth retirees may benefit from a more nuanced and proactive approach to retirement income planning.

Key Strategies Beyond the 4% Rule

4% Rule

1. Dynamic Withdrawal Strategies

Rather than adhering to a fixed withdrawal rate, dynamic withdrawal strategies adjust withdrawals based on portfolio performance, spending needs, and market conditions.

Example approaches include:

  • Guardrails Approach: Set upper and lower limits for annual withdrawals. If your portfolio grows strongly, withdrawals can increase, and if the portfolio declines, withdrawals are reduced to preserve capital.
  • Percentage-of-Portfolio Approach: Withdraw a fixed percentage of your portfolio each year rather than a fixed dollar amount. This allows spending to naturally adjust with market performance.
  • Bucket Strategy: Allocate assets into “buckets” based on time horizon and risk. Short-term buckets hold cash and bonds to cover near-term expenses, while long-term buckets hold equities and alternative investments to support future growth.

Dynamic strategies help provide flexibility to adapt to changing market conditions and personal circumstances, which may be especially valuable for HNW retirees with multiple financial goals.

2. Tax-Efficient Withdrawal Sequencing

Taxes can dramatically impact retirement income, particularly for HNW retirees. Strategic withdrawal sequencing can help minimize taxes and extend portfolio longevity.

Common sequencing strategies include:

  • Taxable Accounts First: Selling appreciated assets in taxable accounts may be advantageous if long-term capital gains rates are lower than ordinary income rates.
  • Tax-Deferred Accounts Later: Preserving IRAs and 401(k)s allows tax-deferred growth to continue, potentially reducing the risk of early depletion.
  • Roth Conversions: Gradually converting tax-deferred accounts to Roth IRAs can help manage taxable income and future required minimum distributions (RMDs), creating a more tax-efficient income stream.

At Agemy Financial Strategies, we analyze each client’s unique tax situation to structure withdrawals in a way that balances current income needs with long-term tax efficiency.

3. Diversification Across Asset Classes

4% Rule

For HNW retirees, diversification is not just about stocks and bonds. It includes alternative assets that can also provide growth, income, and inflation protection.

Examples include:

  • Private Equity and Venture Capital: Potentially higher returns with longer horizons.
  • Real Estate Investments: Income-producing properties or REITs provide cash flow and diversification.
  • Alternative Credit or Private Debt: Offers yield enhancement and low correlation to public markets.
  • Hedge Funds and Managed Futures: Can provide risk mitigation and return smoothing in volatile markets.

Diversification helps reduce the dependency on traditional stock-and-bond portfolios, allowing retirees to pursue higher net returns while managing risk.

4. Cash Flow Planning with Lifestyle Integration

High-net-worth retirees often have complex lifestyles involving philanthropy, travel, second homes, and hobbies. Income planning should integrate these lifestyle elements into a cohesive cash flow plan.

Key considerations include:

  • Mapping out essential vs. discretionary spending
  • Aligning income sources to match the timing of expenses
  • Maintaining liquidity for major purchases or emergencies
  • Planning charitable contributions in a tax-efficient manner, such as donor-advised funds or charitable remainder trusts

A lifestyle-focused cash flow plan helps ensure that retirement is not only financially sustainable but also personally fulfilling.

5. Hedging Against Healthcare and Long-Term Care Costs

Healthcare expenses in retirement are a major concern, especially for affluent retirees who may face elective procedures, premium insurance coverage, or long-term care needs. Income planning should account for these potential costs.

Strategies include:

By proactively addressing healthcare costs, retirees can preserve portfolio value and avoid having unexpected expenses derail their financial plan.

6. Integrating Social Security and Pensions

High-net-worth retirees often have access to Social Security benefits or defined benefit pensions, which can complement other income sources. Strategic timing of these benefits can help enhance retirement income:

  • Delaying Social Security: Waiting past the full retirement age can increase benefits by up to 8% per year until age 70.
  • Optimizing Pension Payouts: Choosing between lump sum and annuitized options based on personal longevity expectations and tax implications.
  • Coordinating with Portfolio Withdrawals: Minimizing portfolio withdrawals in early retirement can allow assets to grow while leveraging guaranteed income streams.

Strategically layering guaranteed income sources with portfolio withdrawals can help enhance both security and flexibility.

7. Charitable Giving as a Retirement Income Strategy

Charitable giving is often a priority for HNW retirees. Properly structured, charitable strategies can reduce taxes while supporting philanthropic goals.

Common strategies include:

  • Donor-Advised Funds (DAFs): Allow immediate tax deduction while distributing funds to charities over time.
  • Charitable Remainder Trusts (CRTs): Provide income during retirement with a charitable donation at the end, offering both tax benefits and legacy fulfillment.
  • Qualified Charitable Distributions (QCDs): Enable tax-free donations directly from IRAs for individuals over 70½, reducing taxable income while supporting charitable causes.

Incorporating philanthropy into a retirement income plan can help optimize taxes, satisfy personal values, and leave a lasting legacy.

8. Periodic Portfolio Rebalancing and Income Reviews

Even with the best strategies, markets and personal circumstances change. Regularly reviewing and adjusting the retirement plan ensures alignment with goals and risk tolerance.

Considerations for HNW retirees include:

  • Annual or semi-annual portfolio rebalancing
  • Monitoring asset allocation against withdrawal needs
  • Reviewing tax impacts and adjusting withdrawal sequencing
  • Adjusting income streams for lifestyle changes, healthcare needs, or unexpected events

Proactive management helps prevent depletion, maintain income stability, and adapt to new opportunities.

Final Thoughts: A Holistic Approach to Retirement Income

4% Rule

For high-net-worth retirees, the 4% rule is a useful guideline but far from sufficient. Retirement planning must go beyond a simple fixed withdrawal rate, integrating dynamic withdrawal strategies, tax-efficient planning, diversified investments, guaranteed income, lifestyle considerations, healthcare planning, and philanthropy.

At Agemy Financial Strategies, we’re experienced in creating customized retirement income plans that address the unique challenges and opportunities faced by affluent retirees. Our goal is to help clients maintain financial confidence, protect wealth, and enjoy a fulfilling retirement. By adopting a holistic and flexible approach, high-net-worth individuals can achieve retirement success that extends far beyond the 4% rule.

Retirement is not just about managing money—it’s about living the life you’ve worked for with security, flexibility, and peace of mind. If you’re ready to move beyond traditional retirement rules and develop a strategy tailored to your unique circumstances, our team at Agemy Financial Strategies is here to help.

Contact us today to schedule a consultation and start building a retirement income strategy that gives you confidence and freedom for the years ahead.

Frequently Asked Questions

1. Is the 4% rule still relevant for high-net-worth retirees?

The 4% rule can serve as a starting reference, but it is often too simplistic for high-net-worth retirees. Larger portfolios, longer life expectancies, complex tax situations, and legacy goals require more flexible and personalized income strategies. Many affluent retirees benefit from dynamic withdrawal approaches, tax-efficient planning, and guaranteed income solutions rather than relying on a fixed withdrawal percentage.

2. What is the biggest risk to retirement income for high-net-worth individuals?

One of the greatest risks is sequence of returns risk—experiencing market downturns early in retirement while actively withdrawing income. This can significantly reduce portfolio longevity. Other major risks include longevity risk, rising healthcare costs, tax inefficiency, and inflation. A comprehensive retirement income strategy is designed to manage these risks proactively rather than reactively.

3. How do taxes impact retirement income planning for affluent retirees?

Taxes play a critical role in retirement income planning for high-net-worth individuals. Withdrawals from different account types—taxable, tax-deferred, and tax-free—are taxed differently. Strategic withdrawal sequencing, Roth conversions, charitable giving strategies, and careful timing of income can help reduce lifetime tax liability and extend the life of a portfolio.

4. How do high-net-worth retirees create reliable income without locking into rigid products?

High-net-worth retirees often build reliable retirement income by combining diversified investments, disciplined withdrawal strategies, and thoughtful cash-flow planning. Rather than relying on rigid or one-size-fits-all products, income is generated through a mix of market-based growth, tax-efficient withdrawals, and strategically held liquid assets. This approach allows retirees to maintain flexibility, adapt to changing markets, and align income with evolving lifestyle and legacy goals.

5. How often should a retirement income strategy be reviewed?

Retirement income strategies should be reviewed at least annually, or whenever there is a significant life, market, or tax change. Regular reviews allow adjustments for market performance, spending needs, tax law changes, healthcare costs, and evolving legacy goals. Ongoing monitoring helps ensure the strategy remains aligned with long-term objectives and provides confidence throughout retirement.

Investment advisory services are offered through Agemy Wealth Advisors, LLC, a Registered Investment Advisor and fiduciary to its clients. Agemy Financial Strategies, Inc. is a franchisee of Retirement Income Source®, LLC. Agemy Financial Strategies, Inc. and Agemy Wealth Advisors, LLC are associated entities. Agemy Financial Strategies, Inc. and Agemy Wealth Advisors, LLC entities are not associated with Retirement Income Source®, LLC. The information contained in this e-mail is intended for the exclusive use of the addressee(s) and may contain confidential or privileged information. Any review, reliance or distribution by others or forwarding without the express permission of the sender is strictly prohibited. If you are not the intended recipient, please contact the sender and delete all copies. To the extent permitted by law, Agemy Financial Strategies, Inc and Agemy Wealth Advisors, LLC, and Retirement Income Source, LLC do not accept any liability arising from the use or retransmission of the information in this e-mail.

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How Long Does $2.5M Last in Retirement?

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Retirement is one of life’s most exciting transitions. After decades of working and saving, you finally get the chance to enjoy the lifestyle you’ve dreamed of: travel, hobbies, family time, and the freedom to pursue your passions. But along with that freedom comes an important question:

How long will your retirement savings last – especially if you’ve saved $2.5 million?

At Agemy Financial Strategies, we know that retirement planning isn’t one-size-fits-all. Today, we’re breaking down how long $2.5 million can last, what factors influence its longevity, and how smart strategies can help make your money work for you throughout your lifetime.

The Big Picture: What Does $2.5M Really Mean in Retirement?

On its face, $2.5 million sounds like a lot. And in many cases, it is a solid foundation for a comfortable retirement. But the real question isn’t just how much you have; you also need to know:

All of these will determine how long your $2.5M can last.

Disclaimer: The following information is for illustrative purposes only and is not intended to provide specific financial, investment, tax, or legal advice. Example outcomes are hypothetical and not guarantees of future results. Always consult with a qualified financial professional regarding your personal situation before making investment decisions.

The “4% Rule”: A Starting Point (But Not the Only Strategy)

How Long Does $2.5M Last in Retirement

Financial planners often begin with a guideline called the 4% Rule. It suggests that if you withdraw 4% of your initial retirement portfolio in the first year of retirement, and then adjust that amount each year for inflation, your money may last about 30 years.

What Does That Look Like with $2.5M?

  • Year 1 withdrawal at 4%:  0.04 × $2,500,000 = $100,000
  • Each following year, you adjust this figure upward for inflation.

At a 4% withdrawal rate, $2.5 million could support about $100,000 per year in today’s dollars for roughly 30 years.

This means you could retire comfortably in your mid-60s and potentially support yourself through your mid-90s.

But here’s the important part: The 4% Rule is a general guideline, not a guarantee. It doesn’t consider individual spending patterns, market fluctuations, changing tax laws, or unexpected expenses.

That’s where personalized planning comes in.

How Spending Patterns Affect How Long $2.5M Lasts

How Long Does $2.5M Last in Retirement

Not all retirees spend the same way. Your unique lifestyle will dramatically change how long your savings last.

Scenario A: Conservative Spender

  • Annual expenses: $70,000
  • Social Security income: $30,000
  • Net expense from portfolio: $40,000
  • Replacement ratio from $2.5M: ~1.6%

Outcome: Your portfolio could last well beyond 30–35+ years, potentially into your lifetime (and possibly leaving a legacy).

Scenario B: Moderate Spender

  • Annual expenses: $100,000
  • Social Security: $30,000
  • Net: $70,000
  • Withdrawal rate: ~2.8%

Outcome: Money could last 30+ years with disciplined investing and adjustments.

Scenario C: High Spender

  • Annual expenses: $150,000
  • Social Security: $30,000
  • Net: $120,000
  • Withdrawal rate: ~4.8%

Outcome: Higher probabilities of portfolio depletion without strategic management, especially if returns are low or health care costs spike.

Inflation Is a Silent Savings Killer

One of the biggest threats to retirement longevity is inflation, the rising cost of goods and services over time.

Even a modest 3% inflation rate can significantly erode buying power over decades.

For example:

  • $100,000 today won’t buy $100,000 worth of goods 20 years from now.
  • At 3% inflation, it’s like prices double every 24 years.

What this means for your $2.5M:

If you don’t account for inflation, you could underestimate how quickly your money is spent. A disciplined, inflation-adjusted withdrawal plan is essential.

Investment Returns Matter, But So Does Risk

How Long Does $2.5M Last in Retirement

Your $2.5M sitting in investments isn’t static. Its growth depends on:

  • Market returns
  • Your investment mix (stocks, bonds, cash)
  • Fees and taxes

Long-Term vs. Short-Term Returns

In retirement, the sequence of returns risk (the order in which you earn returns) is critical. Negative returns early in retirement can dramatically shorten the life of your portfolio.

That’s why most advisors recommend:

A balanced approach can help cushion downturns and smooth withdrawals.

Social Security, Pensions, and Other Income

$2.5M isn’t your only resource. Other steady lifetime income sources can dramatically help extend the life of your retirement savings.

Social Security

  • Claiming earlier can help reduce monthly benefits.
  • Delaying until age 70 may increase benefits significantly.
  • A strong Social Security income can help reduce your withdrawal needs from investments.

Pensions

If you have a pension, that guaranteed stream can cover essential expenses, freeing up investments for discretionary spending.

Part-Time Work or Gig Income

Many retirees supplement income with part-time work, consulting, or passion projects, further reducing pressure on savings.

The more guaranteed income you have, the longer your $2.5M can last.

Health Care & Long-Term Care: Often Underestimated Costs

How Long Does $2.5M Last in Retirement

One of the biggest wildcards in a retirement plan is health care.

  • Medicare doesn’t cover long-term care.
  • Assisted living and nursing homes can cost tens of thousands per year.
  • Chronic conditions can require costly ongoing care.

Planning for health care and long-term care insurance can help protect your portfolio and prevent a financial shock late in life.

A $2.5M portfolio might be more than enough for daily expenses, but unexpected medical costs can change the game if you’re unprepared.

Taxes: A Hidden Retirement Expense

Withdrawals from tax-deferred accounts (like traditional IRAs and 401(k)s) are taxable.

Even Social Security benefits can be taxable depending on your income.

Taxes matter because:

  • They reduce your net spending power
  • They impact withdrawal timing and strategy
  • They influence where you invest (taxable vs. tax-deferred vs. Roth accounts)

Smart tax planning keeps more of your money working for you.

Estate Planning and Legacy Goals

Some retirees want their portfolio to last not only for their lifetime but also to leave a legacy.

With $2.5M, you can:

  • Support heirs
  • Donate to charities
  • Fund education or family goals

Estate planning strategies like trusts, Roth conversions, and beneficiary designations shape how your legacy lives on.

But leaving money behind means spending a little less in retirement. It’s a balancing act and one best done with a professional.

Personalized Planning: The Agemy Difference

At Agemy Financial Strategies, we believe that retirement spending isn’t about arbitrary rules. It’s about you.

We help you build a plan that considers:

Together, we’ll create a roadmap that answers:

“Not just how long will $2.5M last, but how do I make it last as long as I need it to, with confidence and peace of mind?”

Real-World Example: Meet Jerry & Susan

Their Profile

  • Retired at age 65
  • $2,500,000 portfolio
  • Social Security: $35,000 combined per year
  • Annual expenses: $100,000
  • Moderate risk tolerance

Their Strategy

  • Targeted withdrawal: $65,000 from investments (remainder covered by Social Security)
  • Investment mix: diversified, with growth and income components
  • Healthcare plan: Medicare + supplemental insurance
  • Annual review and adjustment

Outcome

With disciplined spending, inflation adjustments, and periodic rebalancing:

  • Their portfolio is expected to last into their 90s
  • They have flexibility for travel and legacy gifts

Their success shows how solid planning and disciplined execution can stretch $2.5M further than a simple rule might suggest.

What If You Spend More? What If You Spend Less?

One of the strengths of a personalized plan is scenario testing.

If You Spend More

  • Your portfolio may experience earlier depletion
  • You may need to adjust spending
  • You could redesign investment strategies
  • You might consider delaying Social Security for higher benefits

If You Spend Less

  • The portfolio could last significantly longer
  • You may have opportunities to increase gifts or legacy plans

The key is flexibility and readiness to adjust with life’s changes.

Frequently Asked Questions

Q: Is $2.5M enough to retire comfortably?

A: It depends on your lifestyle, health, inflation, investment returns, and other income sources.

Q: What if the market goes down early in retirement?

A: That’s sequenced risk. We plan withdrawals and investment allocations to help protect your portfolio during downturns.

Q: Can my money last if I retire early?

A: Early retirement increases the timeframe your portfolio must support. Planning becomes even more critical, especially with health insurance and long-term care.

Final Thoughts: Longevity, Legacy & Peace of Mind

The question “How long will $2.5 million last?” doesn’t have a one-size-fits-all answer. It depends on your spending habits, income streams, investment strategy, health, tax situation, and personal goals.

But here’s the empowering truth:

With proper planning, $2.5M can provide a comfortable retirement for decades, possibly your entire lifetime, and even support legacy goals.

At Agemy Financial Strategies, our mission is to help you transform wealth into confidence.

Your financial journey doesn’t have to be uncertain. When you plan with purpose and partner with the right advisors, you’ll not only know how long your money can last, you’ll know how long it should last based on your goals.

Ready to Plan for Your Best Retirement?

If you’re wondering whether $2.5M (or any amount) will last your retirement, let’s talk. Our advisors are experienced in personalized retirement income planning that matches your needs, priorities, and lifestyle.

📞 Contact Agemy Financial Strategies today for a customized retirement projection and peace of mind about your financial future.

Investment advisory services are offered through Agemy Wealth Advisors, LLC, a Registered Investment Advisor and fiduciary to its clients. Agemy Financial Strategies, Inc. is a franchisee of Retirement Income Source®, LLC. Agemy Financial Strategies, Inc. and Agemy Wealth Advisors, LLC are associated entities. Agemy Financial Strategies, Inc. and Agemy Wealth Advisors, LLC entities are not associated with Retirement Income Source®, LLC. The information contained in this e-mail is intended for the exclusive use of the addressee(s) and may contain confidential or privileged information. Any review, reliance or distribution by others or forwarding without the express permission of the sender is strictly prohibited. If you are not the intended recipient, please contact the sender and delete all copies. To the extent permitted by law, Agemy Financial Strategies, Inc and Agemy Wealth Advisors, LLC, and Retirement Income Source, LLC do not accept any liability arising from the use or retransmission of the information in this e-mail.

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Setting Retirement Goals for 2026: A Strategic Guide for High-Net-Worth Individuals

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As we approach 2026, economic shifts, evolving tax policies, and financial market fluctuations make it more important than ever to reassess and refine your retirement goals. 

At Agemy Financial Strategies, we understand that each client’s financial landscape is unique, and we help craft strategies that optimize wealth preservation, legacy planning, and lifestyle objectives.

In this guide, we will explore how HNWIs can approach setting meaningful retirement goals for 2026, incorporating actionable strategies to help safeguard wealth, maximize opportunities, and achieve a fulfilling retirement.

Understanding the Landscape: Why 2026 Is a Crucial Year

The financial environment heading into 2026 presents both challenges and opportunities. While historically low interest rates have affected traditional investment yields, the markets continue to offer avenues for growth. For HNWIs, the interplay between taxation, estate planning, and investment performance has become increasingly significant:

Setting retirement goals in 2026 requires not only a snapshot of your current finances but also an understanding of how these macroeconomic shifts may influence your wealth trajectory.

Defining Retirement Goals: More Than a Number

2026 Retirement Goals (4)

For many high-net-worth individuals, retirement planning is not merely about accumulating wealth; it’s about crafting a vision for the lifestyle you want to lead post-career. Defining clear retirement goals is essential for shaping your financial strategy. Consider these elements:

  • Lifestyle Objectives: Do you envision traveling extensively, maintaining multiple residences, or pursuing philanthropic projects? Lifestyle expectations will dictate how much liquidity you need in retirement.
  • Legacy Planning: High-net-worth individuals often prioritize passing wealth to heirs, funding charitable foundations, or establishing trusts. Clearly articulating your legacy goals can shape investment and tax strategies.
  • Health and Longevity Planning: Ensuring your retirement funds account for potentially longer lifespans is critical.
  • Flexibility vs. Security: Determine the balance between maintaining a secure income stream and preserving flexibility to seize new opportunities, such as private investments or emerging markets.

A precise understanding of your retirement vision can help enable more accurate financial modeling and goal-setting.

Conducting a Comprehensive Financial Audit

Before setting concrete retirement targets, it’s vital to assess your current financial position in detail. For HNWIs, this audit should go beyond simple account balances:

  • Net Worth Analysis: Evaluate assets, including real estate, private equity holdings, business interests, art, and other tangible assets. Consider liquidity and market value.
  • Income Streams: Identify active and passive income sources. Review dividend-yielding investments, rental properties, royalties, and business profits.
  • Debt Management: Analyze leverage, including mortgages, lines of credit, and business loans, and plan for repayment schedules that align with retirement goals.
  • Retirement Accounts and Tax-Deferred Investments: Consider contribution limits, potential Required Minimum Distributions (RMDs), and tax optimization strategies for 401(k)s, IRAs, and other accounts.

This audit allows you to determine the gap between your current resources and your retirement vision, helping to shape realistic and achievable goals for 2026.

Setting Financial Benchmarks for 2026

2026 Retirement Goals (4)

Once your audit is complete, it’s time to set specific financial benchmarks. HNWIs often have more complex portfolios, and benchmarks should reflect both wealth preservation and growth objectives:

  • Target Retirement Income: Calculate the annual income you will need to sustain your lifestyle. This includes discretionary spending, healthcare, travel, and philanthropy. For HNWIs, you may need to factor in multiple residences, luxury expenditures, and tax obligations.
  • Savings Goals: Determine how much additional savings or investment growth is required to bridge the gap between current assets and target retirement income.
  • Investment Allocation Targets: Review your portfolio’s asset allocation to help ensure it aligns with your risk tolerance and retirement timeline. Consider a balance between liquid assets, growth equities, fixed income, and alternative investments.
  • Estate and Tax Planning Milestones: Set goals for minimizing estate taxes, optimizing trust structures, and leveraging charitable giving strategies. This can help ensure wealth preservation across generations.

Benchmarking provides a roadmap for actionable steps and offers a framework for tracking progress throughout the year.

Leveraging Tax-Efficient Strategies

Taxes can significantly impact retirement wealth, particularly for HNWIs with complex portfolios. A forward-looking tax strategy is essential:

  • Roth Conversions: Consider converting traditional IRA or 401(k) funds into Roth accounts in years when income is lower, potentially reducing long-term tax liabilities.
  • Charitable Contributions: Utilize donor-advised funds or charitable remainder trusts to achieve philanthropic objectives while reducing taxable income.
  • Capital Gains Optimization: Strategically manage the timing of asset sales to minimize capital gains taxes.
  • Estate Planning Tools: Implement trusts, family limited partnerships, and gifting strategies to transfer wealth efficiently while minimizing tax exposure.

By integrating tax strategies into retirement goal-setting, HNWIs can preserve more wealth and help ensure their retirement lifestyle remains financially sustainable.

Accounting for Healthcare and Long-Term Care

Healthcare expenses are a critical, often underestimated component of retirement planning. HNWIs should proactively address these costs:

  • Medicare and Private Insurance Planning: Evaluate coverage gaps and consider supplemental policies to address high-cost medical needs.
  • Long-Term Care Planning: Explore options such as long-term care insurance, hybrid life insurance policies, and self-funding strategies.
  • Wellness and Preventive Programs: Investing in preventive health measures can help reduce long-term medical expenses and improve quality of life in retirement.

Ensuring that healthcare and long-term care expenses are integrated into your 2026 retirement goals prevents unexpected financial strain and helps safeguard your wealth.

Diversification and Risk Management

A core principle for HNWIs is protecting and growing wealth through diversification and risk management. In 2026, this may include:

  • Portfolio Diversification: Maintain exposure across equities, fixed income, real estate, private equity, and alternative assets. Diversification can help reduce vulnerability to market volatility.
  • Geographic Allocation: Consider international investments to help hedge against regional economic fluctuations.
  • Insurance and Asset Protection: Review life insurance, umbrella policies, and liability coverage to protect wealth.
  • Scenario Planning: Stress-test your portfolio against potential economic shocks, market downturns, or unexpected personal events.

A disciplined approach to risk management helps ensure that your retirement goals are resilient under various market conditions.

Planning for Lifestyle and Legacy

2026 Retirement Goals (4)

For HNWIs, retirement planning extends beyond finances; it encompasses lifestyle aspirations and legacy goals:

  • Lifestyle Planning: Define how you wish to spend your retirement years. Consider travel, hobbies, volunteerism, and ongoing professional involvement. Lifestyle planning influences cash flow requirements and investment strategies.
  • Legacy Goals: Identify the financial legacy you wish to leave for heirs or philanthropic causes. Structured estate planning, trusts, and strategic gifting can help achieve these goals efficiently.
  • Philanthropy and Impact Investing: Align investments with personal values, supporting causes that matter to you while potentially providing tax benefits.

Clear articulation of lifestyle and legacy objectives helps ensure your retirement is not only financially secure but also personally meaningful.

Monitoring, Adjusting, and Staying Informed

Retirement goal-setting is not a one-time exercise. It requires ongoing monitoring and adjustment:

  • Regular Portfolio Reviews: Assess performance, rebalance assets, and make adjustments based on market conditions and personal circumstances.
  • Policy and Tax Updates: Stay informed about changes to tax law, estate planning regulations, and retirement account rules that may impact your strategy.
  • Professional Guidance: Collaborate with financial advisors, estate planners, tax professionals, and investment managers to help ensure your retirement plan remains aligned with your goals.

By maintaining flexibility and responsiveness, HNWIs can stay on track toward their 2026 and long-term retirement objectives.

Working With Agemy Financial Strategies

At Agemy Financial Strategies, we’re experienced in guiding high-net-worth individuals through the complex landscape of retirement planning. Our approach includes:

  • Personalized Financial Planning: Tailored strategies that reflect your unique lifestyle, risk tolerance, and wealth profile.
  • Advanced Tax and Estate Planning: Knowledgeable guidance to help optimize tax efficiency and ensure the smooth transfer of wealth.
  • Comprehensive Investment Strategies: Diversified portfolios designed to preserve capital, maximize growth, and mitigate risk.
  • Ongoing Support and Review: Continuous monitoring and adjustments to keep your retirement plan on course.

Partnering with Agemy Financial Strategies helps ensure that your 2026 retirement goals are not only realistic but also strategically designed for long-term success.

Final Thoughts 

2026 Retirement Goals (4)

Setting retirement goals for 2026 is a multifaceted endeavor for high-net-worth individuals. It requires a blend of financial acumen, strategic foresight, and personalized planning. By defining clear objectives, conducting thorough audits, leveraging tax-efficient strategies, and planning for healthcare, lifestyle, and legacy, you can confidently navigate the path toward a fulfilling and secure retirement.

At Agemy Financial Strategies, we understand the complexities faced by HNWIs and provide the expertise needed to translate your retirement vision into actionable strategies. As 2026 approaches, now is the ideal time to refine your goals, safeguard your wealth, and help ensure your retirement years reflect the lifestyle and legacy you desire.

Take the first step today. Contact Agemy Financial Strategies to start crafting your 2026 retirement plan and secure a future that aligns with your vision, values, and aspirations.

Frequently Asked Questions (FAQs)

 FAQ 1: What makes retirement planning different for high-net-worth individuals?

High-net-worth individuals have more complex financial portfolios, including multiple income streams, real estate, private equity, and business interests. Their retirement planning often involves advanced tax strategies, estate planning, philanthropy, and legacy considerations that go beyond traditional retirement savings plans.

FAQ 2: How should I set realistic retirement income goals for 2026?

Start by assessing your desired lifestyle, projected expenses, and potential sources of income. Consider discretionary spending, healthcare, travel, and legacy goals. Conducting a comprehensive financial audit with a trusted advisor can help determine the gap between your current assets and your target retirement income.

FAQ 3: How can tax planning impact my retirement strategy?

Effective tax planning can help preserve wealth and increase retirement income. Strategies may include Roth conversions, charitable giving, optimizing capital gains, and leveraging trusts or estate planning tools. Staying proactive with tax strategies helps ensure your assets work efficiently to support your retirement goals.

FAQ 4: Should I account for healthcare and long-term care in my retirement plan?

Yes. Healthcare and long-term care can significantly impact retirement expenses, especially for high-net-worth individuals who may require private coverage or specialized care. Planning for medical costs, insurance, and wellness programs can help ensure your retirement funds are sufficient for a comfortable lifestyle.

FAQ 5: How often should I review and adjust my retirement goals?

Retirement planning is dynamic. You should review your portfolio, tax strategy, and lifestyle goals at least annually or more frequently if there are major life changes or market shifts. Regular adjustments help ensure your plan remains aligned with your vision and adapts to evolving economic conditions.

Investment advisory services are offered through Agemy Wealth Advisors, LLC, a Registered Investment Advisor and fiduciary to its clients. Agemy Financial Strategies, Inc. is a franchisee of Retirement Income Source®, LLC. Agemy Financial Strategies, Inc. and Agemy Wealth Advisors, LLC are associated entities. Agemy Financial Strategies, Inc. and Agemy Wealth Advisors, LLC entities are not associated with Retirement Income Source®, LLC. The information contained in this e-mail is intended for the exclusive use of the addressee(s) and may contain confidential or privileged information. Any review, reliance or distribution by others or forwarding without the express permission of the sender is strictly prohibited. If you are not the intended recipient, please contact the sender and delete all copies. To the extent permitted by law, Agemy Financial Strategies, Inc and Agemy Wealth Advisors, LLC, and Retirement Income Source, LLC do not accept any liability arising from the use or retransmission of the information in this e-mail.
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What Is the Number 1 Mistake in Retirement Planning?

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Why Misjudging Your Future Income Needs Can Threaten Your Financial Security and How to Avoid It

Retirement should be a time to slow down, enjoy what you’ve built, and live life on your own terms. But for millions of Americans, retirement brings more financial stress than expected; not because they failed to save entirely, but because they made one crucial mistake along the way. 

So, what is the single biggest mistake in retirement planning? For Andrew A. Agemy MRFC, Founder and CEO, who draws on decades of experience advising pre-retirees and retirees, the answer is unequivocal:

“The biggest mistake people make in retirement planning is underestimating how much income they’ll need—and how long they’ll need it.” His insight highlights a critical factor many overlook when preparing for a secure and comfortable retirement.

This single miscalculation can ripple into every part of your financial life. It affects your lifestyle, healthcare decisions, investment strategy, tax obligations, ability to leave a legacy, and even your emotional well-being in retirement.

But the good news? It’s a mistake you can avoid if you understand why it happens and how to correct the course.

In this in-depth guide, we’ll break down the root causes, the consequences, and the specific steps you can take now to help secure a retirement that’s truly sustainable.

Why So Many Americans Underestimate Their Retirement Income Needs

Retirement Planning Mistake

Many people approach retirement with a simple question: “How much do I need to save?” But the real question should be: “How much income will I need every single year, and will it last as long as I do?”

This shift in thinking matters because retirement has changed dramatically.

1. Longevity

Many retirees today will spend 25 to 30 years, or more, in retirement.

That means your savings must last longer than previous generations ever had to.

2. Inflation Erodes Purchasing Power

Even at modest levels, inflation chips away at your lifestyle. What costs $70,000 today may cost $100,000 in a decade.

Underestimating inflation is one of the biggest blind spots in retirement planning. A retirement built on static numbers simply won’t survive a dynamic economy.

3. Healthcare Costs Are Higher Than Expected

Healthcare is consistently one of the top three expenses in retirement. Medicare is not free, and long-term care is not covered by Medicare at all.

Without planning for rising healthcare and long-term care needs, retirees risk draining their savings faster than anticipated.

4. Retirement Is No Longer Linear

Retirement isn’t a straight line where spending steadily decreases. Today, it has phases:

  • Go-Go Years: Travel, hobbies, experiences; often the highest-spending phase.
  • Slow-Go Years: Spending stabilizes, but healthcare rises.
  • No-Go Years: Healthcare and support costs spike.

If you assume you’ll spend less each year, you’re likely underestimating what you truly need.

5. Overreliance on Rules of Thumb

Rules like the “4% withdrawal rule” or “save 10x your salary” can be helpful benchmarks, but they’re not personalized. They don’t account for taxes, market volatility, interest rate changes, or personal health.

Relying on oversimplified rules leads many retirees to assume their money will stretch farther than it actually will.

How Underestimating Income Needs Impacts Your Retirement

Retirement Planning Mistake

Underestimating the amount of income you’ll need can lead to a series of cascading problems. Here’s what this mistake looks like in real life.

1. Running Out of Money Too Soon

This is the most feared outcome and the hardest to recover from. Once you’re retired, you have fewer options to generate new income, and protecting what you have becomes vital.

Without accurate income projections, retirees may:

Running out of money is a real risk, not a hypothetical one.

2. Paying More in Taxes Than Necessary

Taxes don’t disappear in retirement. In fact, without a strategy, taxes can take an even bigger bite out of your income.

Underestimating income needs:

A coordinated tax strategy is often missing, and without it, income shortfalls become more severe.

3. Sacrificing Quality of Life

Misjudging income needs often leads to cutting back more than expected. Travel plans shrink, home maintenance is delayed, gifts to family are reduced, and the lifestyle you envisioned feels out of reach.

Retirement should be enjoyable, not restrictive due to planning mistakes.

4. Increased Stress and Anxiety

Financial uncertainty is one of the top sources of stress for retirees. When income doesn’t feel secure or predictable, it affects mental and emotional health.

Living with financial anxiety in retirement is avoidable, but only with a stronger income plan.

Why This Mistake Happens: The Psychology Behind Retirement Planning

Underestimating retirement income needs isn’t just a math issue; it’s a human issue. Several psychological factors contribute to this mistake.

1. Optimism Bias

Many people assume:

  • “I won’t live that long.”
  • “My expenses will drop significantly.”
  • “Healthcare won’t affect me personally.”

Optimism is helpful in life, but can be dangerous in retirement planning.

2. Difficulty Visualizing Future Expenses

Most people plan using today’s numbers, not tomorrow’s realities. It’s natural to underestimate future costs because they feel distant and abstract.

3. Fear of Confronting the Unknown

Thinking about aging, health issues, or market downturns can be uncomfortable. So people avoid detailed planning.

4. Lack of Education

Retirement planning isn’t widely taught. People rely on generic advice or guesswork rather than comprehensive analysis.

This is exactly where financial professionals can help provide clarity and direction.

The Solution: Focus on Income Planning, Not Just Savings

Retirement Planning Mistake

Traditional retirement planning focuses heavily on accumulation; saving and investing as much as possible. But the real challenge begins once the paychecks stop.

Accumulation gets you to retirement. Income planning gets you through retirement.

Here’s how to avoid underestimating your retirement income needs and build a plan that lasts.

5 Steps to Avoid the #1 Mistake in Retirement Planning

1. Calculate a Personalized Retirement Income Target

You need a realistic projection, not a rule of thumb. A comprehensive income analysis should include:

A detailed, customized plan is the foundation of retirement security.

2. Create a Multi-Source Income Strategy

A strong retirement plan doesn’t rely on a single income stream. It integrates:

  • Social Security
  • Pensions
  • Investment withdrawals
  • Tax-free income sources (like Roth accounts)
  • Real estate income
  • Cash reserves
  • Part-time income (if desired)

The goal is to create reliable, predictable income that supports your lifestyle.

3. Mitigate the Effects of Inflation

To help protect your purchasing power over decades, your plan should include:

Inflation-proofing is essential for long-term comfort.

4. Implement Tax-Smart Withdrawal Strategies

The order you withdraw funds from your accounts can significantly affect how long your money lasts.

A well-designed plan considers:

  • Roth conversions
  • Minimizing Social Security taxation
  • Reducing Medicare IRMAA penalties
  • Managing RMDs
  • Balancing tax-deferred, taxable, and tax-free accounts

A tax-efficient strategy helps put more money in your pocket and extends the life of your savings.

5. Stress-Test Your Retirement Plan

A strong retirement plan must be able to withstand:

Stress testing gives you peace of mind and allows you to make confident decisions, even during uncertain times.

How Agemy Financial Strategies Helps You Avoid This Critical Mistake

At Agemy Financial Strategies, we’ve spent decades helping retirees and pre-retirees navigate complex financial decisions with clarity and confidence. Our approach is rooted in education, transparency, and strategy.

Here’s what sets us apart:

✔ We Focus on Income First

Not just investments, but actual income you can depend on.

✔ We Prioritize Tax Efficiency

Because what you keep matters more than what you earn.

✔ We Build Sustainable, Personalized Plans

Every plan is tailored to your goals, lifestyle, and longevity.

✔ We Stress-Test for Real-Life Scenarios

Your plan must withstand changing markets, rising costs, and unpredictable expenses.

✔ We Provide Ongoing Guidance

Retirement planning isn’t one-and-done; it evolves as your life evolves.

Final Thoughts

Retirement Planning Mistake

The number one mistake in retirement planning, underestimating how much income you will need and how long you will need it, is both common and costly. But it’s also avoidable.

Your retirement should be secure, enjoyable, and stress-free. With the right strategy, disciplined planning, and guidance from trusted professionals, you can build a retirement income plan that truly lasts.

If you’re ready to avoid this mistake and build a plan designed to sustain the retirement you’ve dreamed of, Agemy Financial Strategies is here to help.

Ready to Strengthen Your Retirement Plan?

Let’s build an income plan that supports your lifestyle, helps protect your savings, and gives you confidence for the decades ahead.

Contact Agemy Financial Strategies today for a personalized retirement income analysis.

 

Investment advisory services are offered through Agemy Wealth Advisors, LLC, a Registered Investment Advisor and fiduciary to its clients. Agemy Financial Strategies, Inc. is a franchisee of Retirement Income Source®, LLC. Agemy Financial Strategies, Inc. and Agemy Wealth Advisors, LLC are associated entities. Agemy Financial Strategies, Inc. and Agemy Wealth Advisors, LLC entities are not associated with Retirement Income Source®, LLC. The information contained in this e-mail is intended for the exclusive use of the addressee(s) and may contain confidential or privileged information. Any review, reliance or distribution by others or forwarding without the express permission of the sender is strictly prohibited. If you are not the intended recipient, please contact the sender and delete all copies. To the extent permitted by law, Agemy Financial Strategies, Inc and Agemy Wealth Advisors, LLC, and Retirement Income Source, LLC do not accept any liability arising from the use or retransmission of the information in this e-mail.
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Is $1 Million Enough to Retire Comfortably in Connecticut?

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“Is $1 million enough to retire comfortably in Connecticut?” It’s one of the most asked questions in retirement planning, and the honest answer is: it depends. 

The short version: for some people in Connecticut, $1 million can fund a comfortable retirement if they plan carefully and have low housing or health-care burdens; for others, especially those facing high mortgage payments, expensive long-term care needs, or a desire for an active, travel-heavy lifestyle, it may fall short.

This blog walks through the numbers, the Connecticut-specific factors that change the calculus, realistic scenarios, and practical strategies to help you (or your clients) decide whether $1M will get you down the mountain, and how Agemy Financial Strategies can help plan the descent.

The Basic Math: What $1M Looks Like in Retirement

Disclaimer: This material is for educational purposes only and does not constitute individualized financial, legal, or tax advice. Consult your professional fiduciary advisors about your specific situation and state-specific rules.

A common rule of thumb is the 4% safe withdrawal rate (SWR): withdraw 4% of your portfolio in year one, then adjust that dollar amount for inflation each subsequent year. On a $1,000,000 portfolio, 4% = $40,000 per year before taxes. That’s a helpful starting point, but it’s only a guideline, not a guarantee. Market returns, longevity, inflation, and sequence-of-returns risk can make a big difference in whether that $40,000 lasts 30+ years.

If you target a more conservative 3.5% withdrawal, that’s $35,000 per year. If you’re aggressive and accept more risk, a 5% withdrawal yields $50,000 initially, but with a higher chance of depleting the portfolio over a long retirement. Those small percentage differences matter a lot when you multiply them by decades. (1,000,000 × 0.04 = 40,000; 1,000,000 × 0.035 = 35,000; 1,000,000 × 0.05 = 50,000.)

Which number is “enough” hinges on your annual spending needs after factoring in guaranteed income (Social Security, pensions), taxes, and major expected costs like housing and healthcare.

Connecticut Matters: Cost of Living, Housing, Taxes, and Long-Term Care

Cost of Living

Connecticut’s overall cost of living index is well above the national average. Multiple cost-of-living trackers place Connecticut roughly 12–13% higher than the U.S. average, driven largely by housing and utilities. That means a retiree who needs $50,000 a year to live comfortably in a mid-cost state may need closer to $56,000–$57,000 in Connecticut for the same lifestyle. 

Housing/Home Prices

Median home prices in Connecticut vary widely by county and town (coastal Fairfield County towns are far pricier than inland Litchfield or Windham County), but statewide median sale prices recently have been in the mid-$400k range according to current market trackers. If you still have a mortgage in retirement, a higher home price translates into higher recurring housing costs and pressure on your nest egg. If you own your home outright, property taxes and maintenance remain important considerations: Connecticut has among the highest effective property-tax rates relative to home value in the nation. 

State Taxes on Retirement Income

Connecticut’s tax rules can affect how far $1M will go. Connecticut taxes many types of retirement income; Social Security benefits may be exempt for lower-income seniors, but pension and IRA distributions are generally taxable at the state level (with some exemptions and phase-outs for certain incomes or ages). That means withdrawals from a traditional IRA or taxable account may face both federal and Connecticut income tax, reducing your net spendable income. Tax treatment varies by individual circumstance, so state taxation is an essential piece of planning for Connecticut retirees. 

Healthcare and Long-Term Care Costs

Healthcare is often the single largest variable in retirement budgets. Medicare covers many medical costs beginning at age 65, but premiums, supplemental plans (Medigap), prescription drugs, dental, hearing, and vision care add expenses. Long-term care (home health aides, assisted living, nursing homes) can be extremely expensive and is priced locally. Connecticut’s state data and reports show a wide range of private-pay rates for home health and nursing care by town and agency; many retirees underestimate this cost. If long-term care is needed, a large portion of a $1M nest egg can be consumed quickly.

What Typical Retirees Actually Spend

National analyses show wide variation in retiree spending. Some households live on under $25,000 a year in retirement; others spend $60,000+, depending on lifestyle and location. Retirement researchers estimate average retiree household spending in the $40k–$60k range, depending on age group and region. Connecticut’s higher cost of living pushes the local average toward the upper end of that range. Which group you fall into determines whether $1M is likely to be sufficient. 

Scenario Analysis: Real Examples for Connecticut Retirees

Below are simplified scenarios; real retirements are messier, but these illustrate the tradeoffs.

Scenario A — Modest Lifestyle, Mortgage-Free, Owns Car, Average Health

  • Portfolio: $1,000,000 (taxable/Roth/IRA mix)
  • Guaranteed income: Social Security $20,000/year
  • Desired spending: $55,000/year gross
  • Gap to fund from portfolio = $35,000/year
  • Withdrawal rate required = 3.5% (1,000,000 × 0.035 = 35,000)

Outcome: At a conservative 3.0–3.5% sustainable withdrawal, and if healthcare costs remain typical and taxes are managed, this retiree likely can sustain a comfortable, moderate Connecticut retirement. This scenario benefits from being mortgage-free and having Social Security. Taxes on withdrawals and state income tax still reduce spendable income, so careful tax-aware withdrawal sequencing (Roth conversions, taxable vs. tax-deferred withdrawals) helps.

Scenario B — Active Lifestyle, Travel, Second Home, Some Healthcare Costs

  • Portfolio: $1,000,000
  • Social Security: $18,000/year
  • Desired spending: $85,000/year
  • Gap to fund from portfolio = $67,000/year → 6.7% initial withdrawal rate

Outcome: A 6.7% withdrawal rate is aggressive and likely unsustainable over a multi-decade retirement without other income sources. This retiree will likely exhaust the $1M or face significant lifestyle cuts unless they reduce spending, delay retirement, or generate supplemental income.

Scenario C — High Medical / Long-Term Care Risk

  • Portfolio: $1,000,000
  • Social Security: $22,000/year
  • Desired living expenses: $60,000/year
  • Unexpected long-term care: nursing facility costs or extended home health ($7,000–$12,000+/month depending on level and location)

Outcome: One year of high-level long-term care can easily consume $100k+, quickly eroding the nest egg. For retirees with a family history of chronic illness or cognitive decline risk, $1M alone may be insufficient unless long-term care insurance, hybrid life/long-term care products, or safety-net planning is arranged.

Practical Strategies to Make $1M Go Further in Connecticut

If $1M is your starting point, you don’t have to accept doom or blind faith; there are practical levers:

1. Secure a guaranteed income first

Maximize reliable income sources. Consider delaying Social Security if feasible (benefits grow for each year you delay up to age 70), understand pensions, and consider partial annuitization for a portion of savings to cover essential living expenses. Locking in income for basics reduces sequence-of-returns risk.

2. Control housing costs

Housing is the single biggest expense for many Connecticut retirees. Options:

  • Pay off the mortgage before retiring to lower recurring expenses.
  • Downsize to a smaller home or move to an area with lower property taxes.
  • Consider a reverse mortgage only if you understand the tradeoffs.
  • Rent in a desirable area to avoid high property taxes and maintenance (depends on the market).

3. Tax-efficient withdrawal sequencing

Blend withdrawals from taxable accounts, tax-deferred IRAs, and Roth accounts strategically. Roth withdrawals can be tax-free; doing Roth conversions in lower-income years can help reduce future required minimum distributions and state tax exposure.

4. Healthcare coverage and long-term care planning

Budget for Medicare premiums, supplemental insurance, and out-of-pocket costs. Evaluate long-term care insurance or hybrid life/LTC policies long before care is needed; premiums are lower and underwriting is easier at earlier ages.

5. Adjust the withdrawal rate dynamically

Instead of a fixed 4% rule, use a dynamic withdrawal strategy that reduces spending after poor market returns and increases it after good performance. This adaptive approach improves portfolio longevity.

6. Consider part-time work or phased retirement

Working part-time in retirement can help reduce withdrawals, delay Social Security, and preserve lifestyle.

7. Estate and legacy planning

If leaving a legacy is important (as many Connecticut families expect to pass wealth to children or charities), structuring accounts, gifting strategies, and life insurance can help preserve some capital for heirs while still funding a comfortable retirement.

Rules of Thumb: When $1M Is Likely Enough (And When It Isn’t)

$1M is potentially enough if:

  • You own your home free and clear or have low housing costs.
  • You expect a modest lifestyle (annual spending in the mid-$30k to low-$60k range).
  • You have a guaranteed income (Social Security, pension) that covers a healthy portion of essential needs.
  • You have relatively good health and low expected long-term care needs.

$1M is less likely to be enough if:

  • You still carry a mortgage or high rent.
  • You plan expensive travel or maintain multiple properties.
  • You face high local property taxes or expensive private healthcare needs.
  • You have family patterns that suggest a high probability of long-term care.

A Quick Sensitivity Example: How Taxes and COLA Affect the Number

Start with $40,000 withdrawal (4% rule) on $1M. Subtract Connecticut + federal tax (amount depends on filing status and deductions), even a modest combined effective tax rate of 15% reduces $40,000 to $34,000 net.

Then account for a Connecticut cost-of-living premium of ~12% on your target spending bucket, that same lifestyle now needs roughly $44,800 in gross spending rather than $40,000.

That gap shows why $1M at 4% may not be enough once taxes and higher local costs are built into the plan. (Numbers above are illustrative; exact taxes depend on individual income sources and deductions.) 

How Agemy Financial Strategies Approaches the Question

At Agemy Financial Strategies, we don’t answer the “is $1M enough?” question with a single number. We build personalized retirement blueprints that examine:

  • Your current portfolio composition and tax status.
  • Realistic spending needs and discretionary priorities.
  • Housing and healthcare exposure, including the likelihood of long-term care.
  • Social Security claiming strategies, pension options, and possible annuitization.
  • A stress-tested withdrawal plan across market scenarios, including lower and higher volatility outcomes.

We model multiple scenarios (best case, base case, stress case) and present clear tradeoffs: retire now and reduce travel, delay retirement X years to improve odds, buy LTC insurance, do a partial annuitization, or adopt a dynamic spending plan.

Final Thoughts 

$1,000,000 is a significant milestone and can absolutely fund a comfortable Connecticut retirement for many people, especially if combined with Social Security, paid-off housing, good health, and disciplined withdrawals. But Connecticut’s higher cost of living, property taxes, and the unpredictable cost of long-term care mean that $1M will not guarantee the same lifestyle everywhere in the state.

If you want certainty about your situation, the right next step is not to compare to a generic “enough” metric; it’s to run a plan using your actual numbers: your expected Social Security payout, your mortgage status, your desired annual spending, your health profile, and your tolerance for market risk.

Want to Know if $1M Is Enough for You?

At Agemy Financial Strategies, we’re highly experienced in retirement-income planning, “helping you make it down the mountain.” We’ll build a realistic, tax-aware plan, model how long your money will last under different scenarios, and create a practical path to the retirement lifestyle you want while protecting legacy goals.

Contact us today for a complimentary retirement readiness review and a custom scenario that answers the question specifically for your situation.

Visit agemy.com or call our office to schedule your consultation.

Investment advisory services are offered through Agemy Wealth Advisors, LLC, a Registered Investment Advisor and fiduciary to its clients. Agemy Financial Strategies, Inc. is a franchisee of Retirement Income Source®, LLC. Agemy Financial Strategies, Inc. and Agemy Wealth Advisors, LLC are associated entities. Agemy Financial Strategies, Inc. and Agemy Wealth Advisors, LLC entities are not associated with Retirement Income Source®, LLC

The information contained in this e-mail is intended for the exclusive use of the addressee(s) and may contain confidential or privileged information. Any review, reliance or distribution by others or forwarding without the express permission of the sender is strictly prohibited. If you are not the intended recipient, please contact the sender and delete all copies. To the extent permitted by law, Agemy Financial Strategies, Inc and Agemy Wealth Advisors, LLC, and Retirement Income Source, LLC do not accept any liability arising from the use or retransmission of the information in this e-mail.

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Is $1 Million Enough to Retire Comfortably in Colorado?

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Retirement planning is a deeply personal journey, and one of the most pressing questions many Coloradans face is: “Is $1 million enough to retire comfortably in Colorado?” 

The answer is nuanced and depends on various factors, including lifestyle choices, healthcare needs, housing decisions, and tax considerations.

At Agemy Financial Strategies, we believe in providing personalized financial guidance. This blog delves into the specifics of retiring in Colorado with a $1 million nest egg, offering insights tailored to the state’s unique economic landscape.

What $1 Million Looks Like in Retirement

Disclaimer: This material is for educational purposes only and does not constitute individualized financial, legal, or tax advice. Consult your professional fiduciary advisors about your specific situation and state-specific rules.

A commonly cited guideline is the 4% safe withdrawal rate (SWR), which suggests withdrawing 4% of your portfolio in the first year of retirement and adjusting that amount for inflation in subsequent years. For a $1 million portfolio, this equates to:

  • 4% Withdrawal Rate: $40,000 per year before taxes.

While this serves as a helpful starting point, it’s essential to recognize that market returns, longevity, inflation, and sequence-of-returns risk can significantly impact whether that $40,000 lasts throughout retirement.

  • 3.5% Withdrawal Rate: $35,000 per year.
  • 5% Withdrawal Rate: $50,000 per year (with a higher risk of depleting the portfolio over time).

The adequacy of these amounts hinges on your annual spending needs after accounting for guaranteed income sources like Social Security, pensions, taxes, and major expenses such as housing and healthcare.

Colorado-Specific Factors: Cost of Living, Housing, Taxes, and Healthcare

Cost of Living

Colorado’s cost of living is approximately 13% higher than the national average, primarily driven by housing costs. This means that a retiree who needs $50,000 a year to live comfortably in a mid-cost state may require closer to $56,500 in Colorado for the same lifestyle.

Housing

The median home price in Colorado is around $541,198, with variations depending on the region. For instance, in Colorado Springs, the median home price has reached a record high of $500,000. If you’re mortgage-free, your housing expenses may be limited to property taxes and maintenance. However, if you still carry a mortgage, these costs can significantly impact your retirement budget.

Taxes

Colorado imposes a flat state income tax rate of 4.4% as of 2025. However, retirees may benefit from deductions on retirement income:

  • Ages 55–64: Up to $20,000 in pension or annuity income can be deducted.
  • Ages 65 and older: Up to $24,000 in pension or annuity income can be deducted.

This means that for many retirees, withdrawals from traditional IRAs or 401(k)s may be subject to both federal and state taxes, reducing your net spendable income.

Healthcare and Long-Term Care Costs

Healthcare is often the single largest variable in retirement budgets. While Medicare covers many medical costs starting at age 65, premiums, supplemental plans (Medigap), prescription drugs, dental, hearing, and vision care add expenses. Long-term care, such as home health aides or nursing homes, can be extremely costly and varies by location. It’s crucial to plan for these potential expenses, as they can quickly erode your nest egg.

What Typical Retirees Actually Spend

National analyses show wide variation in retiree spending. Some households live on under $25,000 a year in retirement; others spend $60,000+, depending on lifestyle and location. Retirement researchers estimate average retiree household spending in the $40k–$60k range, depending on age group and region. Colorado’s higher cost of living pushes the local average toward the upper end of that range. Which group you fall into determines whether $1M is likely to be sufficient.

Scenario Analysis: Real Examples for Colorado Retirees

Below are simplified scenarios illustrating how a $1 million portfolio might fare in Colorado:

Scenario A — Modest Lifestyle, Mortgage-Free, Owns Car, Average Health

  • Portfolio: $1,000,000 (taxable/Roth/IRA mix)
  • Guaranteed income: Social Security $20,000/year
  • Desired spending: $55,000/year gross
  • Gap to fund from portfolio: $35,000/year
  • Withdrawal rate required: 3.5%

Outcome: At a conservative 3.0–3.5% sustainable withdrawal rate, and if healthcare costs remain typical and taxes are managed, this retiree likely can sustain a comfortable, moderate Colorado retirement.

Scenario B — Active Lifestyle, Travel, Second Home, Some Healthcare Costs

  • Portfolio: $1,000,000
  • Social Security: $18,000/year
  • Desired spending: $85,000/year
  • Gap to fund from portfolio: $67,000/year → 6.7% initial withdrawal rate

Outcome: A 6.7% withdrawal rate is aggressive and likely unsustainable over a multi-decade retirement without other income sources. This retiree will likely exhaust the $1M or face significant lifestyle cuts unless they reduce spending, delay retirement, or generate supplemental income.

Scenario C — High Medical / Long-Term Care Risk

  • Portfolio: $1,000,000
  • Social Security: $22,000/year
  • Desired living expenses: $60,000/year
  • Unexpected long-term care: nursing facility costs or extended home health ($7,000–$12,000+/month depending on level and location)

Outcome: One year of high-level long-term care can easily consume $100k+, quickly eroding the nest egg. For retirees with a family history of chronic illness or cognitive decline risk, $1M alone may be insufficient unless long-term care insurance, hybrid life/long-term care products, or safety-net planning is arranged.

Practical Strategies to Make $1M Go Further in Colorado

If $1M is your starting point, you don’t have to accept doom or blind faith; there are practical levers:

  1. Secure a guaranteed income first: Maximize reliable income sources. Consider delaying Social Security if feasible (benefits grow for each year you delay up to age 70), understand pensions, and consider partial annuitization for a portion of savings to cover essential living expenses. Locking in income for basics reduces sequence-of-returns risk.
  2. Control housing costs: Housing is the single biggest expense for many Colorado retirees. Options:
    • Pay off the mortgage before retiring to lower recurring expenses.
    • Downsize to a smaller home or move to an area with lower property taxes.
    • Consider a reverse mortgage only if you understand the tradeoffs.
    • Rent in a desirable area to avoid high property taxes and maintenance (depends on the market).
  3. Tax-efficient withdrawal sequencing: Blend withdrawals from taxable accounts, tax-deferred IRAs, and Roth accounts strategically. Roth withdrawals can be tax-free; doing Roth conversions in lower-income years can help reduce future required minimum distributions and state tax exposure.
  4. Healthcare coverage and long-term care planning: Budget for Medicare premiums, supplemental insurance, and out-of-pocket costs. Evaluate long-term care insurance or hybrid life/LTC policies long before care is needed; premiums are lower and underwriting is easier at earlier ages.
  5. Adjust the withdrawal rate dynamically: Instead of a fixed 4% rule, use a dynamic withdrawal strategy that may help reduce spending after poor market returns and increase it after good performance. This adaptive approach improves portfolio longevity.
  6. Consider part-time work or phased retirement: Working part-time in retirement can help reduce withdrawals, delay Social Security, and preserve lifestyle.
  7. Estate and legacy planning: If leaving a legacy is important, structuring accounts, gifting strategies, and life insurance can help preserve some capital for heirs while still funding a comfortable retirement.

When $1M Is Likely Enough (And When It Isn’t)

$1M is potentially enough if:

  • You own your home free and clear or have low housing costs.
  • You expect a modest lifestyle (annual spending in the mid-$30k to low-$60k range).
  • You have a guaranteed income (Social Security, pension) that covers a healthy portion of essential needs.
  • You have relatively good health and low expected long-term care needs.

$1M is less likely to be enough if:

  • You still carry a mortgage or high rent.
  • You plan expensive travel or maintain multiple properties.
  • You face high local property taxes or expensive private healthcare needs.
  • You have family patterns that suggest a high probability of long-term care.

A Quick Sensitivity Example: How Taxes and COLA Affect the Number

Start with a $40,000 withdrawal (4% rule) on $1M. Subtract Colorado + federal tax (amount depends on filing status and deductions), even a modest combined effective tax rate of 15% reduces $40,000 to $34,000 net.

Then account for a Colorado cost-of-living premium of ~13% on your target spending bucket, that same lifestyle now needs roughly $45,000 in gross spending rather than $40,000.

That gap shows why $1M at 4% may not be enough once taxes and higher local costs are built into the plan.

How Agemy Financial Strategies Approaches the Question

At Agemy Financial Strategies, we don’t answer the “is $1M enough?” question with a single number. We help build personalized retirement blueprints that examine:

  • Your current portfolio composition and tax status.
  • Realistic spending needs and discretionary priorities.
  • Housing and healthcare exposure, including the likelihood of long-term care.
  • Social Security claiming strategies, pension options, and possible annuitization.
  • A stress-tested withdrawal plan across market scenarios, including lower and higher volatility outcomes.

We model multiple scenarios (best case, base case, stress case) and present clear tradeoffs: retire now and reduce travel, delay retirement X years to improve odds, buy LTC insurance, do a partial annuitization, or adopt a dynamic spending plan.

Final Thoughts

$1,000,000 is a significant milestone and can absolutely fund a comfortable Colorado retirement for many people, especially if combined with Social Security, paid-off housing, good health, and disciplined withdrawals. But Colorado’s higher cost of living, property taxes, and the unpredictable cost of long-term care mean that $1M will not guarantee the same lifestyle everywhere in the state.

If you want certainty about your situation, the right next step is not to compare to a generic “enough” metric; it’s to run a plan using your actual numbers: your expected Social Security payout, your mortgage status, your desired annual spending, your health profile, and your tolerance for market risk.

Want to Know if $1M Is Enough for You?

At Agemy Financial Strategies, we’re highly experienced in retirement-income planning, “helping you make it down the mountain.” We’ll build a realistic, tax-aware plan, model how long your money will last under different scenarios, and create a practical path to the retirement lifestyle you want while protecting legacy goals.

Contact us today for a complimentary retirement readiness review and a custom scenario that answers the question specifically for your situation.

Visit agemy.com or call our office to schedule your consultation.

Investment advisory services are offered through Agemy Wealth Advisors, LLC, a Registered Investment Advisor and fiduciary to its clients. Agemy Financial Strategies, Inc. is a franchisee of Retirement Income Source®, LLC. Agemy Financial Strategies, Inc. and Agemy Wealth Advisors, LLC are associated entities. Agemy Financial Strategies, Inc. and Agemy Wealth Advisors, LLC entities are not associated with Retirement Income Source®, LLC

The information contained in this e-mail is intended for the exclusive use of the addressee(s) and may contain confidential or privileged information. Any review, reliance or distribution by others or forwarding without the express permission of the sender is strictly prohibited. If you are not the intended recipient, please contact the sender and delete all copies. To the extent permitted by law, Agemy Financial Strategies, Inc and Agemy Wealth Advisors, LLC, and Retirement Income Source, LLC do not accept any liability arising from the use or retransmission of the information in this e-mail.

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Big Box Store or Tailor-Made? Choosing the Right Approach to Your Financial Future

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When it comes to your money, retirement, and peace of mind, the fit matters.

Think about shopping for clothes. You can walk into a big-box store and grab something off the rack. It’s fast, predictable, and might look fine in the mirror. But was it really made for you? Or you could go to a skilled tailor, where every measurement is taken into account, and the result isn’t just clothing, it’s something built to fit you, last longer, and reflect who you are.

Now imagine applying this analogy to your financial future. Do you want a “big-box” financial experience, quick, convenient, but often generic and ill-fitting? Or would you prefer a “tailor-made” financial approach, one that’s personalized, crafted with care, and focused on quality over speed?

Let’s break this down and see why it matters so much for your financial life.

The Big Box Model of Finance

Think about a big-box retailer:

  • It’s everywhere.
  • You know exactly what you’re going to get.
  • It’s usually cheaper, at least at first glance.
  • It’s convenient.

That’s why people flock to places like Target or Walmart. In a pinch, you’ll always find something that “works.” Need a shirt for tomorrow’s meeting? Grab one off the rack and go.

But the trade-offs are obvious:

  • It rarely fits perfectly.
  • Quality is average at best.
  • Service is minimal or nonexistent.
  • If you want something truly special, you won’t find it in the mass-produced aisle.

The same can be said for the “big-box” side of the financial industry. These are the large firms, banks, and insurance companies that provide financial services in bulk. Their approach is standardized, reactive, and often sales-driven.

What Big Box Finance Looks Like:

  • Generic Portfolios: Everyone gets the same allocation, just tweaked slightly by age.
  • Hidden Costs: Management fees, fund charges, and product expenses quietly stack up.
  • Sales Over Service: Advisors are incentivized to sell, not strategize.
  • Reactive Service: They wait for you to call them, not the other way around.

Banks are one of the clearest examples. Many assume banks are protecting their money and acting in their best interest. But once your deposit is in, it’s the bank’s money; they earn multiples on it, while you may see a fraction of a percent in return.

The Tailor-Made Model of Finance

Now, think about stepping into a tailor’s shop.

  • Every measurement is taken.
  • The fabric is chosen carefully.
  • The end result isn’t “one-size-fits-all,” it’s designed for you.
  • The garment lasts longer, looks better, and makes you feel confident.

Yes, tailored clothing often costs more upfront. It requires more time, and not every tailor is great. But when you find the right one? You don’t just wear it; you own it.

Boutique financial firms work the same way. They’re smaller, specialized, and relationship-driven. Instead of cookie-cutter solutions, they build strategies around your unique goals, lifestyle, and family needs.

What Tailor-Made Finance Looks Like:

  • Customization: Every element of your plan, retirement income, tax strategy, and estate planning is designed to fit your specific situation.
  • Education: Advisors teach and guide, empowering you to make informed decisions.
  • Fiduciary Duty: True fiduciaries act in your best interest, not a corporation’s.
  • Relationship Building: They know your story, your values, and your long-term vision.
  • Holistic Approach: Beyond investments, they bring taxes, estate planning, risk management, and income strategies together.

You wouldn’t wear a suit two sizes too big to your most important meeting. Likewise, you shouldn’t rely on a generic, off-the-shelf financial plan to protect your future.

Why the Difference Matters

At first glance, both models seem to “do the job.” A big-box shirt covers your back, and big-box finance manages your money.

But dig deeper, and the differences are stark:

  • The Cost of Fees: Big-box firms often bury clients under layers of hidden fees. Over the decades, this can cost hundreds of thousands of dollars in lost returns.
  • The Cost of Lost Opportunity: Generic portfolios may keep you “average,” but they don’t maximize your potential for tax savings, optimized income, or efficient wealth transfer.
  • The Cost of Poor Service: Without proactive communication and personalized strategy, risks can creep into your plan, unnoticed until it’s too late.

The bottom line: big-box finance feels cheap and easy upfront, but costly in the long run.

Spotting Big Box vs. Tailor-Made Firms

Red Flags of Big Box Finance:

  • Your portfolio looks nearly identical to everyone else’s.
  • You don’t fully understand your fees.
  • Your advisor only calls when selling a new product.
  • You get invited to “free dinner seminars” that end in a sales pitch.

Signs of Tailor-Made Finance:

  • Advisors willing to put fiduciary duty in writing.
  • A relationship-first approach, knowing your story, not just your balance.
  • Holistic planning that covers income, taxes, estate, and investments.
  • An emphasis on education, not transactions.

Holistic Wealth Planning

Big-box firms often stop at basic investments. Tailor-made firms look at the full picture:

This holistic approach helps ensure all parts of your financial life work together seamlessly.

Which Do You Want: Big Box or Tailor-Made?

At the end of the day, it comes down to this:

  • Big Box Finance is convenient, predictable, and widely available, but generic, impersonal, and often expensive in hidden ways.
  • Tailor-Made Finance requires more care and effort to find, but when done right, it offers unmatched personalization, trust, and long-term value.

An educated retiree is a confident retiree. By asking the right questions and seeking quality over convenience, you can ensure your plan truly fits your life.

So ask yourself:

  • Does my current advisor really know me?
  • Am I being sold products, or am I being educated?
  • Am I confident my financial firm is acting in my best interest?

If any answer leaves you uneasy, it may be time to trade the “big-box” experience for something tailor-made to you.

How Agemy Financial Strategies Can Help

At Agemy Financial Strategies, we believe your financial future deserves more than an off-the-shelf solution. We’ve built our firm on a tailor-made philosophy, putting relationships, education, and holistic planning at the heart of everything we do.

Here’s how we stand apart:

  • Fiduciary Commitment: We act in your best interest, always.
  • Education First: We empower you with knowledge to make confident choices.
  • Holistic Planning: Retirement income, tax strategy, estate planning, and risk management all work together.
  • Personalized Service: We know our clients by name, not account number.
  • Long-Term Relationships: We’re here for the journey, not just the transaction.

Our mission is simple: to help you retire and stay retired. With the right strategies, proactive service, and a partner who truly understands you, financial peace of mind is possible.

📞 Call us today at 800-725-7616 to schedule a complimentary consultation, or visit us online at agemy.com

Disclaimer: This content is for educational purposes only and should not be considered financial or investment advice. Please consult with the fiduciary advisors at Agemy Financial Strategies before making any investment decisions. 

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How to Create Consistent Income in Retirement

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Retirement is not just about reaching the end of your working years; it’s about financial independence, lifestyle freedom, and peace of mind. But how can retirees achieve a consistent income without the security of a regular paycheck? The answer lies in a carefully crafted retirement income strategy. At Agemy Financial Strategies, we support individuals and families in navigating retirement with confidence, using time-tested methods to help ensure income stability throughout retirement.

In this blog, we’ll explore how to create a consistent income in retirement, the key components of a reliable income plan, and how Agemy Financial Strategies can help you make the most of your golden years.

Why Consistent Income Matters in Retirement

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During your working years, income is typically steady and predictable, thanks to regular paychecks. Once you retire, the paychecks stop, but the bills don’t. From housing and healthcare to groceries and travel, your financial needs continue and may even increase with time.

Without a structured income plan:

  • You may run out of money too early.
  • You could end up relying too heavily on potentially disappearing Social Security.
  • You might not be able to maintain your desired lifestyle.
  • Market downturns could wipe out years of savings.

This is why replacing your paycheck with consistent, reliable income sources is essential to achieving a successful and stress-free retirement.

Step 1: Know Your Retirement Expenses

The first step in building a retirement income strategy is understanding what your expenses will look like in retirement. These generally fall into two categories:

Essential Expenses

These are non-negotiable, must-have costs such as:

Discretionary Expenses

These are lifestyle choices that add joy and fulfillment:

Having a clear picture of both helps you estimate how much income you’ll need every month. A good rule of thumb is to plan for 70–80% of your pre-retirement income, but the actual figure depends on your lifestyle goals.

Step 2: Maximize Guaranteed Income Sources

Retirement Income 4

Even for high-net-worth individuals, guaranteed income sources remain a cornerstone of a resilient retirement strategy. While HNWIs may not rely on these sources to meet basic living expenses, they can serve as powerful tools for risk mitigation, tax efficiency, estate planning, and legacy preservation.

Social Security: A Strategic Lever

Although Social Security may represent a relatively small portion of a high-net-worth retiree’s overall income, it’s still a valuable component of a well-optimized income plan. For married couples or those with significant longevity potential, a strategic claiming strategy can result in hundreds of thousands of dollars in additional lifetime benefits.

Key considerations include:

  • Delaying benefits until age 70 to lock in the maximum monthly payment is a strategy often used by HNWIs to create longevity insurance.
  • Coordinating spousal benefits to help maximize household income while minimizing taxation.
  • Integrating Social Security with other income streams to help reduce the impact of provisional income taxes.

At Agemy Financial Strategies, we help clients incorporate Social Security into their broader tax and cash flow strategies, ensuring it supports their total financial picture.

Private Pension and Executive Benefit Plans

For HNWIs who are corporate executives, business owners, or former partners in professional firms, access to non-qualified deferred compensation plans (NQDCs), supplemental executive retirement plans (SERPs), or private pensions adds another layer of guaranteed income.

Decisions around:

  • Lump sum vs. annuitized payouts
  • Timing of distributions to minimize tax brackets
  • Survivorship benefits or spousal continuation

This requires careful coordination with your retirement timeline and estate planning goals. These decisions can significantly affect lifetime income, legacy preservation, and tax exposure.

Annuities for Wealth Preservation and Longevity Risk

While annuities are often viewed as tools for middle-income retirees, HNWIs can use sophisticated annuity structures to help:

Types often used by HNWIs include:

  • Fixed Indexed Annuities (FIAs) with income riders for protected growth and lifetime income guarantees.
  • Deferred Income Annuities (DIAs) for longevity hedging and delayed income generation.
  • Private Placement Annuities (PPAs) offering tax-deferral benefits within a customized investment chassis.

Agemy Financial Strategies frequently incorporates high-end annuity strategies as part of a diversified retirement income approach, especially for clients seeking predictable income that complements a more aggressive or growth-oriented portfolio.

Disclaimer: Annuities are insurance products that may offer guarantees of income or principal protection, but they are not without risks. Annuities may involve fees, surrender charges, and limitations on liquidity. Guarantees are subject to the claims-paying ability of the issuing insurance company and are not backed by any government agency. Carefully consider your financial objectives, risk tolerance, and the terms of the annuity contract before purchasing. 

Step 3: Build a Diversified Investment Portfolio for Income

Guaranteed income may not cover all your expenses, which is why investment income plays a crucial role. A diversified portfolio can help generate steady cash flow while managing risk.

Dividend-Paying Stocks

Blue-chip companies with a strong history of dividend payments can provide income and potential for growth. These stocks often increase dividends over time, helping you keep up with inflation.

Bonds and Fixed Income Investments

Bonds offer more stability than stocks and can provide regular interest payments. Consider:

  • Government Bonds
  • Municipal Bonds (often tax-free)
  • Corporate Bonds
  • Bond ETFs or Mutual Funds

Real Estate Investment Trusts (REITs)

REITs offer exposure to real estate with the benefit of regular income through dividends. They can help diversify your income stream and add inflation protection.

Total Return Strategy

This approach focuses on balancing income and growth. Rather than chasing high-yield investments, it combines asset growth, dividends, and withdrawals to meet income needs sustainably.

Step 4: Create a Withdrawal Strategy

How you withdraw money from your accounts matters just as much as how you invest. A smart withdrawal strategy can help ensure you don’t outlive your savings.

The 4% Rule

A popular guideline suggests withdrawing 4% of your retirement savings annually. For example, if you have $1 million saved, you’d withdraw $40,000 in the first year.

However, this rule may be too simplistic. Here’s why:

  • It was based on outdated market assumptions from the 1990s, including higher bond yields and different market conditions than we face today.
  • It doesn’t account for sequence of returns risk, which can significantly impact portfolio longevity if poor market performance occurs early in retirement.
  • It ignores tax implications and doesn’t differentiate between taxable, tax-deferred, or tax-free accounts, a crucial consideration for HNWIs with complex financial landscapes.
  • Healthcare and long-term care costs have risen dramatically, often outpacing general inflation.
  • It fails to reflect lifestyle flexibility and dynamic spending patterns that many retirees now prefer, particularly those with the means to spend more in early retirement and scale back later.

Instead of relying on a fixed withdrawal rate, Agemy Financial Strategies takes a dynamic, personalized approach that considers:

For high-net-worth retirees, flexibility, precision, and active income management are far more valuable than outdated rules of thumb.

Step 5: Plan for Inflation and Longevity

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Inflation Protection

Even at modest levels, inflation erodes purchasing power over time. A $50,000 retirement income today might feel like $37,000 in 20 years if inflation averages 2%.

Inflation protection strategies include:

  • Investing in growth assets like stocks
  • Holding inflation-adjusted bonds (e.g., TIPS)
  • Choosing annuities with inflation riders
  • Delaying Social Security to increase monthly benefits

Longevity Planning

Living longer is a blessing, but it also increases the risk of outliving your assets. Planning for a 30+ year retirement is critical.

Strategies include:

Step 6: Don’t Overlook Healthcare and Long-Term Care Costs

Healthcare is one of the largest expenses in retirement. According to the latest Fidelity Retiree Health Care Cost Estimate, an average couple can expect to pay approximately $330,000 (after tax) to cover health care costs in retirement, and that number does not include the cost of long-term care.

Medicare Planning

Understanding when and how to enroll in Medicare is crucial. Parts A, B, C, and D offer different coverages and costs. You may also want supplemental coverage (Medigap).

Long-Term Care Insurance

This covers services not included in regular health insurance, such as in-home care, assisted living, or nursing homes. Planning ahead can preserve your assets and provide peace of mind for your family.

Step 7: Work with a Fiduciary Financial Advisor

Working with a fiduciary advisor like those at Agemy Financial Strategies helps ensure your best interest is always the top priority.

Here’s what a fiduciary advisor can help you with:

Our team at Agemy Financial Strategies brings decades of experience helping clients turn savings into sustainable income while helping protect against risk and uncertainty.

The Agemy Financial Strategies Approach

Retirement Income 4

At Agemy Financial Strategies, our mission is to help clients retire with confidence and clarity. Our proprietary income planning process is designed to help ensure your money works for you, no matter how long you live.

What Sets Us Apart:

Whether you’re five years away from retirement or already there, we help you build and maintain an income stream that lasts.

Contact us today to schedule a complimentary consultation.

Final Thoughts

Creating consistent income in retirement isn’t a one-size-fits-all formula; it’s a tailored strategy that requires careful planning, diversified investments, and a deep understanding of your goals and financial landscape.

By combining guaranteed income sources, a diversified portfolio, tax-efficient withdrawals, and long-term planning, you can enjoy retirement with confidence and peace of mind. The key is starting early and working with a trusted fiduciary who understands your unique situation.

At Agemy Financial Strategies, we help you do just that. Let us show you how to turn your hard-earned savings into a sustainable retirement paycheck for life.

Contact us today to get started. 

FAQs: Creating Consistent Income in Retirement

  1. What is the best way to create consistent income in retirement if I already have substantial assets?
    Even with significant wealth, consistent income requires intentional planning. Diversifying income sources, such as tax-efficient portfolio withdrawals, real estate income, annuities, and deferred compensation plans, can help ensure stability while managing taxes and preserving capital. A custom strategy tailored to your goals, time horizon, and legacy plan is essential.
  2. Do I still need Social Security if I have multiple income streams?
    Yes, Social Security can still play a valuable role. While it may not be a primary income source for HNWIs, it offers longevity insurance and can help reduce drawdowns from investment accounts. Coordinated claiming strategies can also maximize household benefits and tax efficiency.
  3. How can I protect my income strategy from market volatility?
    We use a combination of risk-managed investments, fixed income products, and guaranteed income vehicles like annuities to help insulate income from market swings. A “bucket strategy” or time-segmented approach can help ensure immediate income needs are met without selling growth assets in a downturn.
  4. What role do taxes play in my retirement income plan?
    A significant one. HNWIs often have assets spread across taxable, tax-deferred, and tax-free accounts. The order of withdrawals, timing of RMDs, and capital gains strategy can drastically impact net income. We design tax-efficient income plans to help preserve wealth and reduce lifetime tax liabilities.
  5. Is the 4% Rule a good guideline for someone with a multi-million-dollar portfolio?
    Not necessarily. The 4% Rule is a generalized rule of thumb that may not account for today’s lower interest rates, market dynamics, or your personal financial situation. For HNWIs, a more flexible, customized withdrawal strategy aligned with your spending, tax strategy, and estate goals can be far more effective.

Disclaimer: This content is for educational purposes only and should not be considered financial or investment advice. Please consult with the fiduciary advisors at Agemy Financial Strategies before making any investment decisions

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Mid-Year Financial Check-In: Are You On Track for Your Retirement Goals?

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As we move through the second half of the year, it’s the perfect time to reflect and evaluate where you stand on your path toward retirement. With headlines dominated by inflation, market volatility, rising interest rates, and uncertainty around future tax policy, staying on course can feel more challenging than ever.

A mid-year financial check-in offers a critical opportunity to assess your goals, measure progress, and make necessary adjustments to help ensure you’re on track for the future you envision.

At Agemy Financial Strategies, we understand that life changes, and so do markets, tax laws, and personal circumstances. That’s why we encourage clients and readers alike to carve out time each year, ideally around mid-year, to re-evaluate their financial strategy. Whether retirement is just around the corner or still decades away, the steps you take now can make a world of difference later.

In this blog, we’ll walk through the key areas to review during your mid-year check-in, provide insight into common retirement planning mistakes, and share how working with a fiduciary financial advisor can help you stay aligned with your goals.

The June 2025 Economic Snapshot

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As of June 2025, several key economic indicators suggest both opportunities and risks for retirement planners.

U.S. economic growth has slowed significantly, with GDP growth decelerating to around 1.6% year-over-year, down from approximately 2.8% in 2024. The first quarter of 2025 even saw a slight contraction of 0.2–0.3%, driven by increased imports in anticipation of tariffs and persistent inflation. On a global scale, the OECD reports that GDP growth is tracking near 2.9%, with the U.S. outlook appearing especially subdued amid heightened economic uncertainty.

Inflation remains a stubborn challenge, though it has moderated somewhat from the highs of previous years. As of May, the Consumer Price Index (CPI) shows inflation at2.4% year-over-year, with core inflation (excluding food and energy) standing at 2.8%. However, the Personal Consumption Expenditures (PCE) price index, which the Federal Reserve watches most closely, rose sharply to 3.6% in the first quarter, underscoring ongoing inflationary pressures that affect purchasing power and long-term planning.

In response, the Federal Reserve has kept interest rates steady at 4.25–4.50% since March 2025. While markets initially hoped for rate cuts in the second half of the year, the Fed has remained cautious due to the inflationary impact of tariffs and global supply disruptions. As a result, any rate cuts may be delayed until late 2025 or beyond. This “higher for longer” stance on interest rates supports savers with better yields on fixed-income investments, but it also raises the cost of borrowing and puts pressure on growth-sensitive sectors.

The labor market continues to show resilience, but signs of strain are emerging. Job growth figures are increasingly being revised downward, suggesting that the employment picture may be weaker than headline numbers suggest. Economists anticipate that unemployment could rise to around 4.8%by year-end. Still, consumer spending, a key engine of the economy, remains a relatively bright spot, with Deloitte forecasting real personal consumption expenditure (PCE) growth near 2.9% for the full year.

Finally, trade tensions and tariffs remain a major headwind. The April “Liberation Day” tariff initiative caused short-term stock market turmoil, though investor sentiment rebounded after signs that tariff expansion may be slowing. Despite that recovery, ongoing policy uncertainty continues to dampen business investment and fuel inflation, adding further complexity to the Fed’s efforts to navigate a soft landing.

What This Could Mean for Your Retirement Strategy

  • Growth is subdued: If your retirement projections assume 3–4% returns, beware, economic growth is likely too weak to support that over the near term.
  • Inflation remains sticky: Although cooled from 2024 highs, it continues to erode purchasing power. Your retirement budget should reflect a higher cost-of-living.
  • Interest rates might stay higher longer: This benefits savers but increases borrowing costs and could weigh on equity markets.
  • Job market softening: Risks to employment and productivity mean your plans should include income buffers or contingency funds.
  • Market volatility is real: Tariff-related shocks and geopolitical tensions can trigger sudden corrections. A diversified, long-term investment plan is key.

Why a Mid-Year Financial Check-In Matters

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While most people wait until year-end to review their finances, doing a check-in mid-year can provide several advantages:

  • Course Correction: If you’re off-track, there’s still time to make changes before the end of the year.
  • Tax Efficiency: You can still implement tax-saving strategies to help reduce your liabilities.
  • Retirement Alignment: As markets fluctuate and personal situations change, a mid-year review helps ensure your retirement savings stay on pace.
  • Behavioral Discipline: Regular reviews promote accountability and reinforce healthy financial habits.

Let’s explore the components of a smart and strategic mid-year check-in.

1. Reassess Your Retirement Goals

Start by asking yourself the most important question: Are my goals still the same?

Your retirement vision may change over time. Maybe you’re now thinking about relocating, starting a business post-retirement, or retiring earlier (or later) than originally planned. Your financial strategy should evolve to reflect these changes.

Consider the following when reviewing your retirement goals:

  • Target retirement age: Has it shifted?
  • Lifestyle expectations: Are you still aiming for the same standard of living?
  • Big-ticket items: Have you added new travel plans, real estate purchases, or health-related costs?
  • Legacy goals: Has your desire to leave an inheritance or donate to charity changed?

Once your goals are clarified, you can better evaluate whether your savings rate, investments, and timeline are still appropriate.

2. Review Your Retirement Accounts and Savings Progress

Mid-year is a great time to check how much you’ve saved so far and whether you’re pacing well toward your annual and long-term targets.

Here are key questions to ask:

  • Are you contributing the maximum to your retirement accounts (401(k), IRA, Roth IRA, etc.)?
  • Have you taken advantage of catch-up contributions if you’re over 50?
  • How have your investments performed year-to-date, and are they in line with your expectations?
  • Are you taking full advantage of employer matches and tax-deferred growth?
  • Are you maintaining a healthy balance between tax-deferred, taxable, and tax-free accounts for future tax flexibility?

If you’re behind on your savings goals, don’t panic; there’s still time to adjust. Consider increasing your contribution rate or reallocating investments to better align with your timeline and risk tolerance.

3. Revisit Your Budget and Cash Flow

Your budget is the foundation of your financial plan. If your spending is outpacing your income, your retirement goals could be at risk. Mid-year is a smart time to re-evaluate where your money is going and identify opportunities to increase savings.

Things to check:

  • Are you consistently living below your means?
  • Have any expenses increased unexpectedly (e.g., medical bills, home repairs)?
  • Are there discretionary expenses you can reduce or eliminate?
  • Have you received any bonuses, tax refunds, or windfalls you can redirect to savings?

If you’re not tracking your spending, now is the time to start. Even a basic budgeting app or spreadsheet can give you a clear picture of your financial habits.

4. Assess Your Investment Strategy

Market volatility,inflation, interest rates, and global events all affect how your investments perform and how they should be managed. Review your investment strategy to ensure it reflects both current conditions and your risk tolerance.

Ask yourself:

  • Is your asset allocation (mix of stocks, bonds, cash, etc.) still appropriate for your age and goals?
  • Have you rebalanced your portfolio this year to maintain your desired risk level?
  • Are you diversified enough to protect against downside risk?
  • Are your fees (advisory, fund expense ratios, etc.) eating into returns?

For those nearing retirement, sequence of return risk, the danger of poor market performance early in retirement, becomes a serious concern. This might be a good time to discuss a bucket strategy or other income planning techniques with your advisor.

5. Maximize Tax Efficiency

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Your tax strategy can have a big impact on retirement readiness, especially if you’re pulling from multiple types of accounts or considering Roth conversions.

Things to review mid-year:

  • Are you withholding the right amount in taxes?
  • Are you in a low-income year that makes a Roth conversion especially beneficial?
  • Have you harvested any capital losses to offset gains?
  • Are there tax-advantaged accounts (like HSAs or 529 plans) you should contribute to?
  • Are you eligible for qualified charitable distributions (QCDs) if you’re over 70½?

Strategic tax planning throughout the year can help reduce your lifetime tax liability, not just your bill for the current year.

6. Plan for Healthcare Costs

Healthcare is one of the largest expenses in retirement. According to Fidelity, the average 65-year-old couple retiring today will need over $315,000 to cover healthcare costs in retirement, excluding long-term care.

Use your mid-year check-in to plan ahead:

  • Are you contributing to a Health Savings Account (HSA)?
  • Do you have sufficient coverage for disability or critical illness?
  • Have you considered long-term care insurance?
  • Do you understand your options for Medicare or pre-Medicare health insurance?

Staying proactive can help prevent healthcare expenses from derailing your retirement plan.

7. Evaluate Debt and Liabilities

Debt can significantly delay or diminish your retirement lifestyle. During your mid-year review, look closely at your liabilities:

  • Have you made progress paying down high-interest debt?
  • Is your mortgage on track to be paid off before retirement?
  • Are you using credit responsibly?
  • Are you co-signed on any loans that could become your responsibility?

If debt is holding you back, consider creating a payoff plan or refinancing to more favorable terms.

8. Update Your Estate Plan

Estate planning isn’t just for the ultra-wealthy; it’s a crucial piece of retirement readiness. Mid-year is a great time to revisit your documents and beneficiaries to help ensure everything reflects your current wishes.

Checklist:

Working with a trusted financial planner and estate attorney can assist you in building a plan that helps safeguard your legacy.

9. Check Your Insurance Coverage

Insurance is often overlooked in financial check-ins, but it plays a vital role in helping protect your retirement plan.

Evaluate:

  • Life insurance: Do you still need it, or do you need more coverage?
  • Disability insurance: Is your income protected if you become unable to work?
  • Home and auto insurance: Are you covered adequately?
  • Umbrella insurance: Could a lawsuit or major event threaten your assets?

Make sure your coverage keeps pace with your financial situation and goals.

10. Meet With a Fiduciary Financial Advisor

Perhaps the most important step in a mid-year financial check-in is working with a fiduciary advisor; someone legally and ethically required to put your best interests first.

A fiduciary can:

  • Help you assess whether you’re on track for retirement
  • Optimize your investment and tax strategies
  • Identify hidden risks in your plan
  • Create a tailored retirement income strategy
  • Offer unbiased, client-focused advice

At Agemy Financial Strategies, we’re experienced in helping individuals and families prepare for the retirement they deserve. As fiduciaries, we take a proactive approach to planning, rooted in trust, transparency, and long-term thinking.

Common Retirement Planning Pitfalls to Avoid

Even the most disciplined savers can fall into retirement planning traps. Here are some we often see:

  • Underestimating inflation and how it erodes purchasing power
  • Not adjusting asset allocation as retirement approaches
  • Failing to plan for healthcare or long-term care costs
  • Relying too heavily on Social Security
  • Ignoring taxes in retirement
  • Waiting too long to start saving or seeking professional advice

Avoiding these mistakes can help ensure your retirement is financially secure and personally fulfilling.

How Agemy Financial Strategies Can Help

Retirement Goals 1

At Agemy Financial Strategies, we understand that retirement planning isn’t a one-size-fits-all process. It’s a dynamic, evolving journey that must respond to market conditions, personal goals, and changing financial landscapes. That’s why we take a proactive and personalized approach to your financial future.

As fiduciary advisors, we are legally and ethically committed to acting in your best interest. We don’t push products; we create comprehensive, strategic plans tailored to your unique retirement vision. Whether you’re approaching retirement or years away, we help you navigate today’s challenges with confidence and clarity.

Here’s how we support you:

  • Customized Retirement Planning: We assess your current financial position, align your investments with your timeline, and help you define a clear retirement income strategy.
  • Tax-Efficient Strategies: From Roth conversions to tax-loss harvesting, we look for ways to help reduce your tax burden now and in retirement.
  • Risk Management: In times of economic uncertainty and market volatility, we build resilient portfolios designed to help preserve capital while pursuing long-term growth.
  • Social Security and Income Optimization: We help determine when and how to take Social Security and structure your income in a way that supports your lifestyle without running out of funds.
  • Ongoing Guidance: Financial planning is not a “set-it-and-forget-it” exercise. We conduct regular reviews, adjust strategies as needed, and keep you informed as laws, markets, and your goals evolve.

With inflation still a concern, interest rates at multi-year highs, and global uncertainty influencing every asset class, now is the time to partner with a team that understands the full picture. At Agemy Financial Strategies, we’re not just preparing you for retirement; we’re helping you thrive in it.

Let’s talk about how to strengthen your financial plan for the rest of 2025 and beyond.

Schedule a complimentary consultation. 

Final Thoughts: Small Adjustments, Big Impact

Your mid-year financial check-in doesn’t have to be a massive overhaul. In fact, small, intentional changes can make a big difference over time.

Whether it’s increasing contributions, adjusting your asset allocation, or scheduling a conversation with your advisor, each step you take today helps lay a stronger foundation for tomorrow.

Remember: Retirement isn’t a destination. It’s a journey, and like any journey, it requires preparation, navigation, and course correction along the way.

If you’re ready to take your mid-year check-in to the next level, our team at Agemy Financial Strategies is here to help. Let’s work together to build a plan that aligns your wealth with your goals and your retirement with your vision.

Contact Agemy Financial Strategies today to schedule your retirement review and help ensure you’re on the right track.

Disclaimer: This content is for educational purposes only and should not be considered financial or investment advice. Please consult with the fiduciary advisors at Agemy Financial Strategies before making any investment decisions.

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The Best-Kept Retirement Secrets

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When most people think about retirement, they imagine freedom, travel, family time, and enjoying the fruits of a lifetime of hard work. But beneath those dreams often lies a lingering fear: “Will I run out of money?”

The truth is, many retirees are making the same critical mistake—they’re chasing growth in the stock market rather than securing reliable income. And that mistake can cost them not just peace of mind, but their entire retirement lifestyle.

Here’s what the smartest retirees know—and what most financial advisors don’t tell you: The key to a stress-free retirement isn’t about how much money you’ve saved, it’s about how much income your portfolio can generate.

Welcome to the retiree’s best-kept secret.

Why Income, Not Growth, Is the Foundation of a Secure Retirement

Retirement Secrets

Most financial professionals build retirement plans around the idea of accumulating a large nest egg, usually invested heavily in growth stocks or mutual funds. The assumption is: “If the market keeps growing, your portfolio will too.”

But here’s the flaw: The market doesn’t grow in a straight line.

There are up years and down years. And if you’re withdrawing money from your portfolio during a down year, you’re not just losing value—you’re locking in losses and reducing your future income potential.

Instead, retirees should be thinking like landlords. Just as landlords collect rent month after month, regardless of the housing market’s value, retirees can—and should—collect steady income from investments designed to pay them regularly.

What Does Income-Based Retirement Look Like?

An income-first retirement strategy focuses on building a portfolio of assets that generates reliable, predictable cash flow. These include:

This approach means your lifestyle isn’t dependent on whether the S&P 500 is up or down. You’ll know what’s coming in, month after month, year after year.

It’s not about growth—it’s about certainty.

How Is This Different from Traditional Retirement Planning?

Retirement Secrets

Let’s look at a typical growth-based portfolio. If your $1.5 million nest egg is invested in stocks yielding 2%, you’ll get just $30,000/year in income. The rest depends on market gains, which can be unpredictable.

With an income-focused approach? That same $1.5 million could potentially generate $90,000/year in contractual or dividend income, and possibly more if actively managed for value.

And thanks to compounding and strategic trading, that “extra” 1–2% return each year could translate into over $300,000 in additional earnings over a decade.

Why Haven’t You Heard About This?

Because it doesn’t benefit Wall Street.

Wall Street firms make money whether you gain or lose, as long as your money stays invested. Their priority is assets under management, not the outcome of your retirement.

And frankly, many advisors simply don’t know how to build income-generating portfolios. The skill set required is different, more hands-on, and requires deep expertise in bonds, credit markets, and alternative income vehicles.

This is where Agemy Financial Strategies comes in.

How Agemy Financial Strategies Can Help

Retirement Secrets

At Agemy Financial Strategies, we’ve been helping retirees enjoy stress-free retirements for over 30 years. We believe that everyone deserves a retirement defined by confidence, not anxiety.

Here’s how we do it:

✔ Income-First Planning: We prioritize building portfolios that generate contractual, predictable income, not just paper gains.

✔ Tactical Investment Management: Our team actively manages your portfolio to buy low, sell high, and capture additional yield—often gaining an extra 1–2% per year through professional trading strategies.

✔ True Diversification: We go beyond ETFs and mutual funds. Our clients enjoy portfolios that are resilient to market chaos and tailored to withstand volatility.

✔ Fiduciary Responsibility: As fiduciaries, we are legally and ethically obligated to put your interests first, not Wall Street’s.

✔ Personalized Retirement Income Plans: You’ll receive a custom roadmap with income projections, retirement milestones, and peace-of-mind calculations—so you know exactly how your money will support your goals.

We call this approach “More Life Than Money”—and we’d love to help you experience it firsthand.

Final Thoughts: Take the “Hope” Out of Retirement

A good retirement plan doesn’t rely on hope.

Hope that the market does well.
Hope that you don’t live too long.
Hope that you won’t outspend your savings.

Retirement should be lived with certainty, not speculation.

The retiree’s best-kept secret is simple: Invest for income, not just growth. And with the right strategy, you can enjoy more than enough income to live the way you want for the rest of your life, without fear of running out.

Frequently Asked Questions (FAQs)

  1. What is the biggest mistake retirees make with their money?
    They stay invested in a growth-oriented portfolio and withdraw funds during market downturns—locking in losses. Shifting to an income-focused strategy helps provide more stability and predictability.
  2. Is income investing safe?
    Income investing can be very safe when diversified and managed properly. It focuses on assets with contractual payouts and less market volatility, potentially offering more consistent returns than growth-only strategies.
  3. Can I still get growth in an income-focused portfolio?
    Yes. While the primary goal is income, your portfolio can still grow. Active management can help provide strategic gains on top of the steady income stream—think of growth as the “icing on the cake.”
  4. What’s the ideal time to switch from growth to income investing?
    Typically, 5–10 years before retirement is the best time to start rebalancing toward income. But it’s never too late to make the shift—even if you’re already retired.
  5. How do I get started with Agemy Financial Strategies?
    Call us at 800-725-7616 or visit www.agemy.com. We’ll set up a free consultation to review your goals and explore how to help you maximize your retirement income.

Ready to make your income work for you?

Retirement Secrets

Call Agemy Financial Strategies at 800-725-7616 for your free copy of the white paper “TR = I + G: The Formula for a More Successful Retirement” and begin your journey toward peace, purpose, and plenty in retirement.

Disclaimer: This content is for educational purposes only and should not be considered financial or investment advice. Please consult with the fiduciary advisors at Agemy Financial Strategies before making any investment decisions.

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