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Understanding How Retirement Income Works is Vital

What is the underlying premise for all long-term savings? Why are we giving up current enjoyment of our income? The answer is to have an income stream in retirement. It makes sense to learn how retirement income streams work economically and define how to allocate your savings today. The sooner you get on an efficient path, the greater the impact you have on your retirement income streams.

Products vs. Strategy

The key is to have the skill and technique to combine different products together to create efficiency. We all have a finite amount of money to work with so we have to be as efficient as possible to create the highest and most reliable income stream in retirement by utilizing our Two Economic Powers® approach.

Two Main Retirement Income Problems


We do not know how long we are going to live. If we knew this, then retirement planning would be easy. By simply dividing the number of years into the total amount of retirement assets, you would find your retirement income. So, do you plan for the best or the worst-case scenario? Whichever you plan for, does that increase or decrease your distribution rate?

Distribution Rate

Determine a distribution rate before knowing the rate of return of our Retirement Assets in any given year. Most traditional retirement plans show a constant rate of return vs. variable return. How do Retirement Assets react to fluctuating rate of returns? We have no idea what our sequence of returns will be the day we retire. What if your portfolio loses 10-15% in a given year, what is your plan of action for the following year?

Accumulation and Distribution

Think of it like climbing a mountain. What’s the objective? Is getting to the top the objective? Or is it really getting to the top then making it back down safely the ultimate objective? This is a metaphor for our financial lives. Getting up the mountain is our Pre-Retirement/Accumulation phase and getting back down is our Retirement/Distribution phase. The key is this one continuous journey. Understanding how retirement income streams work (distribution) defines “how you pack your bags” in Pre-Retirement.

If you were going to climb a mountain, would you get a guide? What if the guide said they could get you to the top of the mountain, but they weren’t sure how you were going to get back down? Would you continue to use that guide or find another one? Let me be your guide to all things retirement.

Thinking About Retirement Planning

Why is this Strategy So Important?


All of us only have a finite amount of money. Inefficiencies cause major losses to occur. We must be efficient in where we allocate our money in the short time we have to save for your retirement plan.

Inefficient losses can be reflected in:

  • Lower Current Lifestyle

  • Lower Retirement Income

  • Inadequate Protection

  • Loss of Financial Control

  • Financial Vulnerability

  • Higher Taxes and Fees

  • Less Benefits

The problem in many cases isn’t the accumulation of money in retirement plans like 401(k)’s, but the low distribution rates we could be on track for if that’s all we do. What if today you could put yourself on a path that provides higher distribution rates from the retirement assets you’re accumulating? It is possible using our Two Economic Powers® approach.

The Solution

Approach your yearly retirement income with the Two Economic Powers® Strategy.

Two Economic Powers® Examples
The example below uses the same amount of savings to generate annual Retirement Income Comparisons. Actual results may be more or less favorable.


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