Retirement products are balances and rules. Retirement planning must translate them into income that supports spending, and the translation goes wrong in two predictable ways: adding gross figures drawn from different dates, and treating a projected lump sum as monthly income.
For each account, identify when it can be accessed, which portions are restricted, what retirement choices may apply and how it is invested. Then combine the accounts with expected state, employer, rental, work or other income.
The translation depends on assumptions: retirement date, tax, inflation, fees, investment return, drawdown and lifespan. It may include a mixture of flexible invested income and guaranteed income. Each solves different risks.
Try this now
Create two lists. The first shows every retirement capital value on the same recent date. The second shows every expected monthly income, its start date and whether it is guaranteed, variable or estimated.
Ask your advisor
- What after-tax income does the combined picture support?
- Which product rules limit the choices?
- How do poor markets or a longer life affect the result?
- What decisions become irreversible?
Product balances cannot establish sustainable income on their own. Current retirement and tax rules require specialist review.
Next: Your pre-retirement meeting needs assumptions, not reassurance