Key Pillars of a Retirement Plan: Are Your Bases Covered?

Written by mwealthgroup
Published on January 16, 2024

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Imagine your ideal retirement - perhaps relaxing on a beach, traveling the world, or spending more time with loved ones. 

But will you have the funds to support that lifestyle? 

For most individuals today, pensions, where you receive a retirement check every month after working at a job for a certain number of years, are gone. Today’s retirement requires diligent personal planning.

Are you truly prepared?

Per the Bureau of Labor Statistics, only 15% of private sector employees receive traditional pensions now. 

As pensions vanish along with expected social security income, the burden of funding retirement shifts almost entirely to the individual. This shift makes advanced planning not just ideal but absolutely essential to avoid lifestyle downgrades.

Without proper preparedness, you risk reaching retirement age without adequate savings or income streams to sustain your current quality of living - or face even bleaker outcomes like depleting funds entirely. 

But with the right framework secured well in advance, you can construct financial pillars resilient enough to weather retirement's storms and uphold the lifestyle you desire. Read on as we reinforce the most essential pillars.

Pillar 1: Define your retirement goals  

retirement goal visual

First, envision what an ideal retirement looks like for you... 

  1. Do you hope to travel regularly? 
  2. Take up new hobbies? 
  3. Will you relocate closer to family? 
  4. What does a typical day in retirement look like?
  5. Will you continue working or consult part-time?
  6. What home projects or renovations are needed?
  7. How can you give back to causes important to you?

Write down the activities, pursuits, and expenses you desire for retirement, including potential healthcare costs. 

Revisit your vision regularly and adjust as your dreams evolve so your savings align with your future reality.

Pillar 2: Customize your investment strategy

Simply saving cash alone won’t deliver the growth needed for a comfortable retirement. You need portfolio returns consistently exceeding inflation. Stocks may help counter inflationary forces, but concentrating solely on them leaves retirement dreams vulnerable to market ups and downs.

Therefore, work with a financial advisor to develop an investment plan aligned with your personal risk tolerance and goals. Choose smart investments focused on providing consistent, compounded growth no matter what’s happening in the market. 

An advisor can assess your ability to stomach potential losses and then construct allocations accordingly. This may incorporate other assets like real estate, bonds, life insurance, annuities, and alternative investments.

Your life isn’t cookie-cutter, your retirement plan shouldn’t be either. It should be tailored to you. 

Pillar 3: Generate sustainable income streams

generate sustainable income

Once retired, the focus shifts from accumulation to reliably generating income. While Social Security and pensions can offer baseline cash flow, other streams can provide future-proofed security. 

One way to achieve this is by putting some of your retirement account into an annuity. An annuity is a long-term vehicle often used to create income for life. Many retirees have turned to annuities to guarantee income in retirement, no matter how long they live. It’s a way to turn your retirement account into your own personal pension plan. 

Maybe real estate is your thing, and a portfolio of income-producing properties is another great way to get cash flow and keep building value in the property. 

Also, certain insurance products offer tax-advantaged income streams. Permanent life insurance policies allow tax-free loans and withdrawals against cash value, potentially earning 5-9% annually. When suited to your situation, integrate insurance and annuities.

Consider the following income generators:

  • Part-time work - Many retirees work part-time in retirement, whether in the same field or a new pursuit, to earn supplemental income.
  • Invest in real estate - Owning rental property can provide steady rental income with the right property management.
  • Rent out unused space - Leverage extra living space by listing rooms or full properties on rental sites like Airbnb to generate hands-off income.
  • Royalties/Licensing - Receive ongoing passive payments for assets you create, from books to music to inventions.
  • Buy precious metals - Precious metals like gold and silver act as a hedge against inflation, can appreciate over time and be sold at a profit.

Get creative in finding ways to establish passive income channels so your retirement isn't dependent on just one income source.

Pillar 4: Prepare for rising healthcare costs

planning for healthcare costs in retirement

Skyrocketing medical expenses threaten even watertight retirement strategies. With healthcare outpacing inflation, vigilantly prepare for this financial drain. Survey Medicare plans like Medigap and Medicare Advantage to handle copays, coinsurance, deductibles, and unexpected costs Medicare misses.

While no one likes “what if” scenarios, recognize long-term care needs could arise - whether injury, illness, or aging. Run numbers on long-term care insurance to estimate coverage for in-home care or facility nursing. Account for all premiums, medications, dental, hearing, procedures, and healthcare costs in retirement budget projections.

Together we stress test savings rates based on life expectancy and medical inflation. Ensure your nest egg is sustained through increased longevity and rising expenses. Though no perfect formula exists, a prudent plan covers healthcare unknowns so you can enjoy a worry-free retirement. Stay proactive; contain costs where possible. 

Getting clarity on likely healthcare expenses early and having customizable coverage, reserves, and inflation-protected funding vehicles in place gives retirement confidence.

Pillar 5: Entering retirement “bad debt free”

bad debt from credit cards

Not all debt is equal when planning for retirement. Debt used wisely can increase your income and retirement security. Debt used poorly can put your retirement at risk.

Good debt applies borrowed money to buy income-generating assets like rental properties or dividend stocks. Even with mortgage payments or interest, these assets make money for you.

Bad debt, like unpaid credit card debt, uses borrowed money for things that lose value, like extravagant vacations or impulse purchases. This debt drains your finances over time.

Before retiring: Minimize bad debt which only costs you money long-term. Keep or add good debt that builds assets making money for you.

In retirement: Good debt income streams keep producing income to live comfortably. Eliminating bad debt payments frees up more retirement cash flow.

The key is knowing which debts add financial value and which simply amount to money owed. Use borrowing power strategically to improve retirement finances, not jeopardize them.

Pillar 6: Build accessible cash reserves 

savings for retirement

Despite best laid plans, unexpected expenses happen - home repairs, urgent travel, medical events, car trouble, and more. 

  • Maintain accessible cash reserves equal to 12-18 months of retirement living expenses to handle surprises without derailing your finances. 
  • Park funds in accessible accounts like high-yield savings, money markets or cash value life insurance.
  • Revisit the adequacy of your reserves regularly as income sources, market conditions, health status, and spending habits evolve. 

Pillar 7: Seek guidance from a financial advisor

Retirement planning can be complex, requiring wisdom and expertise. Partnering with an experienced financial advisor provides invaluable support. 

M Wealth Group specializes in retirement planning and gets to know your unique situation and goals, providing tailored guidance to help you reach them. A trusted advisor stays on top of changing market conditions and new products, ensuring your plan remains nimble and optimized.

We will track your progress and adjust to counteract inflation and other threats. With your future in expert hands, you can enter retirement with confidence. Click here to set up a consultation with our accomplished advising team today.

Pillar 8: Create a lasting legacy 

legacy planning for future generations

Your retirement and estate plans are closely linked, and it's important to factor in your legacy intentions. 

  • Be sure to designate beneficiaries for assets such as retirement accounts and insurance policies. 
  • It's also wise to establish powers of attorney and healthcare directives. 
  • Regularly updating your estate documents is crucial to reflect any changes in family dynamics, asset values, or tax legislation. 
  • Seeking advice from estate planning professionals can be very beneficial. 

While it’s essential to provide for your heirs, remember not to overlook your own retirement needs. Striking the right balance is key, and clear communication of your plans can help prevent familial disagreements. With thoughtful planning, you can ensure that your loved ones are cared for well after your time.


Like any major life transition, retiring securely requires thoughtfulness and diligent preparation. M Wealth Group’s advisors bring clarity to retirement planning complexities. 

Contact us today for a complimentary assessment to review your retirement pillars and see if anything needs reinforcement. Discover how custom strategies can help safeguard the financial future you envision. Our team looks forward to guiding you toward the retirement you desire!

Book your complimentary financial review!

Ready to change your financial future? Schedule your free consultation with Martin and Chelsea Matthews, owners of M Wealth Group.
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M Wealth Group
M Wealth Group
Together, Martin and Chelsea use their professional expertise and life experiences to provide personalized financial strategies to help clients achieve their goals.
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