There are many ways to turn retirement savings into income.

 

Some approaches are complex; others rely too heavily on market performance. 

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Let us explain here an approach that retirees across Northwest Ohio have used successfully.

 

​Many retirees like to think about financial concepts in ways that make sense and are useful when deciding on a strategy. 

 

For retirement income planning, we ask you to

simply picture a pyramid.  

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Why a pyramid?

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Because pyramids are built to last.

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Some of the pyramids in Egypt have stood for more than 4,500 years, largely unchanged. Their strength comes from a simple principal: a wide, stable base supporting carefully layered levels above it.

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A well-designed retirement income plan works the same way.

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Instead of relying on a single investment or strategy, income is built layer by layer, with each level serving a specific purpose.

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The Foundation: Guaranteed and Essential Income

 

Every strong retirement plan begins with a solid base.

 

At the bottom of the pyramid are income sources designed to cover essential living expenses - housing, food, healthcare, insurance and mandatory costs.

 

These income sources are typically predictable and dependable, helping ensure that the necessities of life are covered regardless of market conditions.

 

This foundation provides something retirees value most - peace of mind.

 

When essential expenses are covered by reliable income, retirees often feel more comfortable allowing other assets to grow and support the lifestyle they want.

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The Middle Layers: Stability and Moderate Growth

 

Above the foundation are income layers designed to provide additional cash flow with moderate risk and return potential.

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These assets often serve two important purposes:

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• To supplement your guaranteed income sources

• Provide flexibility as your retirement evolves

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Investments at this level may generate income while still allowing for some growth. The goal is to strike a balance between reliability and opportunity.

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For many retirees, these middle layers become the workhorses of their income plan helping maintain purchasing power and support discretionary spending.

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The Upper Levels: Growth and Long-Term

Opportunity

 

​At the top of the pyramid are assets that are typically more growth oriented. 

These investments may experience heart pounding fluctuations, but they also offer the potential for:

• Long-term growth

• Inflation protection to help you maintain purchasing power

• Legacy planning opportunities to maximize your estate and minimize taxes

Because the base of the pyramid already provides the stability required, retirees may feel more comfortable allowing this portion of their portfolio to pursue higher long-term returns.

 

Prefer a Simple or Detailed Pyramid?

 

Some retirees in Northwest Ohio prefer a simple pyramid with three or four clear layers. Social Security, pension, protected income and stock dividends.

 

Other retirees around Toledo build more detailed structures to optimize income throughout retirement. Adding asset classes and allocating accounts based on when the income may be needed.

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Regardless of complexity, the core idea remains the same: Each layer serves a specific role. Do all your current accounts serve a purpose?

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Instead of relying on a single strategy, income is diversified across multiple sources - creating a structure that is designed to support retirement for decades.

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