How Tom & Becky Solved Their Retirement Income Math Problem

by | Feb 5, 2024 | Blog

Tom, age 60, an electrical engineer for a Phoenix area high tech firm, went to work right out of college. He  began contributing to his 401(k), reaching a value of approximately $950,000. No pension was offered.

Because he is retiring in the next few years, he has become very concerned about market volatility. He lived through the 2008 crash and realizes that had that happened right after retiring, it would have been a disaster. Some of his friends have pensions, but not Tom. Many of his friends also have an annuity. He wanted an annuity but not one that would relinquish control of his principal or have high fees.

They Recognized The Need For A Plan

Becky, age 57,  is a retired elementary school teacher who took time out to raise their two kids.

Even with that time away, she was able to put together a 403(b) account of approximately $151,000 and has a state pension that will pay her about $12,300 per year for life. Her Social Security income is also approximately $12,000 annually.

The couple is building a second home in Prescott, where they may one day choose to move, perhaps selling their primary residence. They are planning an active retirement with traveling, visiting family, and hobbies.

They spend approximately $92,000 annually on the basics of life with some entertainment and travel.

The REAL Challenge: Their Lifestyle  Costs More Than Their Projected Income

The math is simple: If you spend $80,000 annually on the basics of life, and one spouse is in her 50s, you may need sources of reliable income for 30 years—but she may need the income for 40+ years.

$80,000 x 30= $3.2 million (without inflation.) 

If you spend $120,000 annually:  30 years = $3.6 million, 40 years = $4.8 million.

They were worried. They needed a plan. We were able to help.

Q. Do you have a written, guaranteed plan for income, including Social Security, totaling $3 million to $4 million over the next 30 to 40 years?   Our clients do. We create 6 figure retirement incomes that are reliable, guaranteed, and inexhaustible.

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