Your Retirement Income: Why Diversification Matters

When investing for retirement, there are many things to think about in order to get it right. But there are five specific risks that must be addressed in order to preserve both your money and your standard of living as you begin to make withdrawals:

  • Longevity
  • Inflation
  • Withdrawal Rate
  • Market Volatility
  • Health Care

How can these risks be addressed? The answer is quite simple: diversify! Having a diversified income plan helps balance all these risks, helping to increase the odds your money will outlast you.

A diversified income plan seeks to cover essential expenses with guaranteed income sources, while providing funds for discretionary expenses through investment portfolio withdrawals.

Some of the different sources of this diversification plan will include the following:

  • Investment Portfolio – either professionally managed, personally managed or a combination of both
  • Social Security & Pensions
  • Fixed Annuities – immediate income, deferred income, fixed deferred with guaranteed lifetime withdrawal benefit

In summary, while diversification is important when investing for retirement, it is just as important when withdrawing these funds. Preservation of that which you have worked so hard to accumulate is critical to see your plan through.


About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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