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Planning for your retirement is NOT a simple game.

You are transitioning from a time where you are focused on “GROWTH” and “ACCUMULATION” to one in which you are turning your attention to “PRESERVATION” and “INCOME.”

When it comes to managing your money during retirement, Smart Money Magazine says the following: “The distribution phase of retirement, the time when you withdrawal funds from savings, makes the accumulation part look like child’s play.”

Far too many retirees make the mistake of simply shifting around their mutual fund allocation when they retire. Retirement represents a fundamental shift in your life. Doesn’t it make sense that your portfolio should undergo a fundamental shift as well?

Remember the old adage: “Those who fail to plan, plan to fail.” If you want to enjoy a successful retirement, one that helps maintain your financial stability for the rest of your life, then you want to have a specific plan. Your retirement plan needs to address five key areas:

You Need A Retirement Income Plan. If you do some research on retirement planning you will quickly come across something called “The 4% Rule.” This rule states that when you use a balanced portfolio – one invested roughly half in stocks and half in bonds – you should be able to take 4 percent income every month in your first year, and increase your income slightly each year thereafter to battle inflation. The rule indicates that if you do this, you should have an 89 percent chance of your money lasting throughout a 30-year retirement.

The problem with this rule is that it only works as predicted when the markets go up. Do you want to base your retirement success on what the market has to do? I certainly hope not!

Your retirement income plan should be able to deliver income to you regardless of what the stock market does. You deserve that don’t you?

Your retirement income plan should also take inflation into account. Your income may need to increase during your retirement so you can maintain your spending power.

You Need A Retirement Investment Plan. To better prepare yourself, would you be interested in learning the number one mistake retirees make with their portfolios? The Putnam Research Institute gives us that answer: “For retirement portfolios whose primary goal is to minimize the risk of depletion and sustain withdrawals, optimal equity allocations range between 5 and 25 percent.”

How about that? Putnam Institute is telling you that if you are retired, taking income, and you want your money to last – then you should have less than 25 percent of your money in equities, or the stock market. How does that compare to your current portfolio?

In the same study, the Putnam Institute explains why lower stock allocations are so important during retirement: “The higher equity allocations used in many popular retirement investment products today significantly underestimate the risks that these higher -volatility portfolios pose to the sustainability of retirees’ savings, and to the incomes on which retirees depend.”

When it comes to your retirement investment plan, remember what your grandfather may have told you-take the risk in your portfolio when you are young, so when you retire, you don’t have to.

A truly diversified retirement investment plan typically includes ALL types of accounts. Just remember, you may want to overweight safer accounts in order to follow the advice from the Putnam Institute.

You Need A Tax Management Plan. Let me ask you a simple question: does your financial professional review your tax return, to make certain that you are paying the minimum tax to the IRS each year? If you are like most retirees, probably not. Would that service be important to you?

And what about your IRA (or other type of retirement accounts)? For many retirees, their IRA (or equivalent) represents their largest tax exposure. How are you handling this tax liability? What is your IRA exit strategy? What plan do you have in place to best control how much you give the IRS on these accounts?

When it comes to your Retirement Tax Plan, all these items should be addressed to manage your taxes.