When it comes to growing that nest egg, you’ll hear a lot of people talk about chasing returns. That basically means switching from poorly performing investments to investments with exceptional recent returns.
Again, is that really the best strategy for true financial independence? How long do “hot new investments” really stay hot?
Chasing returns is simply another “get rich quick” strategy focused on instant gratification. It isn’t going to provide the kind of lifestyle you really want in retirement.
Hitting the Next Home Run
Wall Street is usually focused on having you build a big nest egg…but they hardly ever focus on having income when you retire. They rarely talk about having enough to live off in retirement.
Think about it. Have you ever heard a radio spot or a television ad that talks about retirement income? If not, it might be because most companies are more focused on their own profits than your long-term goals. They sell the thrill of the trade, hoping you’ll hit the next home run.
But don’t be fooled! They’re just looking for something to brag about. They’re just looking for their next big win!
And trust me. Hitting the next home run isn’t what you should be focused on if you’re really looking for retirement income. Because it isn’t just about building a large nest egg. It’s about your income when you retire.
You’ve probably figured out by now that pensions are a thing of the past and that social security isn’t something that you can rely on. But do you really understand the true reality of that?
Sure, you have your 401K and your IRA, which you’ve been told is how to prepare for retirement. But is it really going to accomplish what you think it will?
Have you considered the taxes you’ll have to pay when you start making withdrawals? Because you will have to withdraw from that account eventually. So, is it really going to be enough?
Wall Street used to teach that withdrawing 4% starting at age 65…will create income that will last for life. However, now the experts are starting to back off that prediction saying 2.5% to 3% is a safer bet or we might be running out of funds by our mid-70’s. Yikes!
I believe when planning for retirement you must decide on a steady amount of income that you will feel comfortable with and that you can count on. It isn’t about having a huge nest egg at the point of retirement, it’s about what happens to that nest egg once you retire.
In summary, is it really all about that “Golden Nest Egg?” Or is it all about cash flow when you need it?
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