Want to be sitting pretty during your retirement? Consider “the three-legged stool,” a metaphor for the three most common sources (or “legs”) of income that you’ll likely rely on in retirement:
- Social Security retirement benefits
- Employer pension benefits
- Individual savings and investments
Taking steps now to strengthen each leg will go a long way towards making your retirement dreams a reality!
The first two legs of the stool, Social Security benefits and employer pensions, produce a steady or relatively “fixed” stream of annual income throughout retirement. That’s the good news. The bad news? These two legs alone may not support your retirement plans, resulting in an income shortfall. And, unless you can also count on receiving benefits from an employer pension plan (and fewer and fewer of us are able to do so), then the third leg, individual savings and investments, will likely play a major role in funding your retirement.
With so many potential investment options to choose from — 401(k)s, Traditional IRAs, Roth IRAs, stocks, bonds, etc. — it’s important to follow an investment strategy that:
- balances the potential for growth with your tolerance for risk
- factors in the potential impact of current-year and future taxes
- aligns with your unique retirement goals
If you would like to take a deeper look your unique individual savings and investment strategy to ensure you have a strong third “leg” of retirement income, please reach out. We’re here for you.