What is the Independent Income System? It is our investment methodology that we use to help manage your financial future. There are three parts to the Independent Income System- how to manage your money, how to protect your assets, and how to plan your estate.
Our system is unique because we create a specific purpose for each of your investment accounts. This can help the investor try to avoid risk and capture more opportunities. Here are the most common buckets we create using our Independent Income System:
This can be used for investors who need current income and or will need income over the next five years. Because the markets are less predictable in the short term, this bucket of money usually holds more conservative investments.
This helps avoid the common approach of just owning a bunch of investments and picking at them for retirement income. Many investors and advisors sell off investments a little each month or as needed to cover current income. The problem with this approach is as equity prices decline, more and more shares are sold to meet current needs, which accelerates the decline of the account value and can increase the risk of outliving the income. The Independent Income System helps address this common trap.
Predictable and reliable income is important for peace of mind when it comes to having a comfortable retirement. Trying to make smart and calculated decisions with social security income, pensions, and accounts that provide more predictable income is the primary focus for this bucket of money.
According to the most recent numbers published by the Social Security Administration, nearly 70% of current retirees opt to start social security income before reaching full retirement age. This creates a lifetime income penalty for the family. The Independent Income System helps a family create a written retirement income plan to avoid this common mistake.
Equities can be a great opportunity for growth for investors who have time on their side. If accounts have been created for current income, reliable income, and future pay raises, an investor may have more time on their side when it comes to investing in equities. We use defined investment approaches to pick our equity holdings and can even incorporate our circuit breaker technology for investors looking for an added layer of downside protection.
By using this approach in our Independent Income System, this can help eliminate the lottery of returns for the retiree hoping the stock market keeps going up each year to keep up with withdrawal needs and not having a backup plan if and when the market declines.
Once an investor has an understanding of what each of their accounts or buckets are designed to do, the next question is, what can blow this up? Often, it is an unexcepted and unplanned health care crisis for a retiree. In our Independent Income System, we look for ways to leverage what are often considered “lazy” assets to help put a shield over the investment assets and to protect the income of the surviving spouse in the event of premature death.
How do we protect your assets? With Long-Term Care, do you have a plan in place? If not, the Life Leverage Plan can help put a plan for your loved ones for the future. Part of the estate planning process is to look at how much income the surviving spouse will have if the other spouse passes away. The planning starts by picking the correct pension option and having a plan in place to cover any shortfalls, such as a loss of one of the Social Security Incomes. Then we look at strategies to cover any potential gaps.
To get started with your financial strategy, please complete the form below: