Why Income Stream Is Key to Retirement Planning


When it comes to estimating retirement income needs, there are a plethora of methods to determine the exact amounts clients will need to save annually to meet their retirement goals. It’s easy to get caught up in exact numbers and lose sight of the most important aspect of retirement: the flow of income.

Having a substantial retirement portfolio and owning a home can be huge accomplishments that clients can tick off their retirement to-do lists, but lose focus on the value of cash flow, especially once they retire. can be detrimental. While having an end goal and a specific amount calculated for retirement planning can help provide clarity, the real goal of retirement planning should be to create an income stream that a client just can’t survive, said Kiplinger.

A retirement income stream can come from a variety of sources, including Social Security, real estate, investment portfolios, and retirement plans. In an environment of rising rates, inflation and quantitative tightening, investors are seeing their portfolios particularly tested, and financial advisers must anticipate questions from their clients concerning both their investments and the safety of their income stream in the future.

Financial advisors should expect to be able to answer specific questions from clients regarding factors that may reduce or negatively impact their retirement income streams, how their portfolios and income streams are affected by bear markets or downward market movements, and the impacts of tax rates on portfolios and income streams.

In a tough market environment, many investors are seeing their income streams and purchasing power shrink as inflation continues to soar. For many, the focus has shifted from maximizing revenue generation to protecting assets and revenue streams in a difficult and volatile market environment.

Nationwide offers a suite of actively managed ETFs within stocks for financial advisors. These funds include National Nasdaq-100 Managed Income Risk ETF (NUSI)the S&P 500 National Managed Income Risk ETF (NSPI)the National Dow Jones Risk-Managed Income ETF (NDJI)and the National Russell 2000 Managed Income at Risk ETF (NTKI).

For more news, information and strategy, visit the Retirement Income Channel.

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