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Empowering Your Retirement Dreams

Modern Retirement Income Strategies: Aligning Risk, Return, and Lifestyle

Retirement today looks very different from what it did just a few decades ago. Pensions are disappearing, Social Security is facing mounting pressure, and retirees are relying more heavily on personal savings and investments to create a sustainable income stream. That’s why it’s more important than ever to have the right retirement income strategies in place.

In a recent episode of the Empower Your Retirement podcast, financial advisors Frankie Guida and Noah Williams from A Better Way Financial discussed how retirees can boost their income and reduce financial risk through smarter portfolio management and personalized planning.

The Shift in Retirement Planning

Many retirees today are entering retirement without the guaranteed income sources that previous generations enjoyed. In the podcast, the team highlights a key challenge: most people don’t realize how much risk they’re actually taking on in their portfolios.

“Many of these individuals do not know exactly how much risk they’re taking on,” Frankie explains. “That’s one of the first things we uncover in a risk and return analysis.”

This kind of evaluation is a critical first step in building a retirement income strategy that aligns with both your goals and your tolerance for market fluctuations.

Key Strategies to Enhance Retirement Income

1. Align Risk With Reality

One of the most potentially impactful retirement income strategies is ensuring that your portfolio reflects your true comfort with risk. In the podcast, Noah and Frankie share a case study of a couple in their early 60s with $2.5 million saved for retirement.

They discovered that the couple’s portfolio had a potential 37% drawdown during a market downturn—much higher than they were comfortable with. By reallocating assets, A Better Way Financial reduced their potential drawdown to just 20%, providing nearly $413,000 in additional principal protection.

2. Optimize Returns Without Taking on More Risk

What’s even more powerful is that this reduced-risk portfolio still projected similar, even slightly improved returns. The original portfolio was earning about 7.5%, while the optimized version was expected to earn around 8%.

“We were able to essentially cut their risk close to in half, while still getting a similar, if not higher, projected return,” Frankie noted.

This is why it’s crucial to not only manage risk but also to ensure you’re getting the return you deserve for the risk you’re taking.

3. Reduce Fees to Keep More of Your Money

Fees are often the silent killer of retirement income. During the portfolio analysis, Noah and Frankie uncovered approximately $9,000 in unnecessary annual fees that the couple was paying.

By switching to a lower-cost, more efficient strategy, the couple would be able to have more in their pockets—without needing to save more or change their lifestyle.

“We’re not talking about saving more or doing anything extreme. We’re just optimizing what they already have,” Frankie said.

4. Increase Income Without Saving More

Combining the strategies of risk reduction, improved returns, and lower fees allowed the couple to increase their projected annual retirement income from $85,000 to over $150,000—nearly doubling their income.

This type of strategic planning can be life-changing. “Instead of just hoping your retirement income is enough,” Frankie says, “let’s build a plan that makes it so.”

Taking the Next Step

Enhancing your retirement income requires a comprehensive and personalized approach. By implementing the strategies discussed by Frankie and Noah, you can work towards a more secure and comfortable retirement.

For more insights and detailed discussions on retirement planning, listen to the full episode here:
🎧 How to Boost Your Retirement Income: A Financial Game Plan

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All assumptions presented in this article are based off of information provided by the client mentioned. Any investment returns mentioned are hypothetical returns based off of previous 25 years of performance utilizing market indexed funds. Past performance and market conditions may not be repeated in the future. These are not guarantees of future results. Actual results may vary, perhaps to a significant degree.

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