Why should you build your own retirement income plan? Because it will help you know if your savings will last you throughout retirement. It will help you allocate your assets in the most low cost, lowest risk way to buy the lifestyle you want in retirement.

To download a free copy of “How To Avoid Annuity Traps” click here: http://retirementplanningmadeeasy.com/annuity-traps

So here are 5 simple steps you can take today to build your own retirement income plan.

1. Determine how much income you need – Go through your credit card bills and bank statements to know where your money is going. Use these to add up how much your expenses are. These are the expenses you will need to cover in retirement.

2. Determine your lifetime guaranteed income sources – Social Security will be one for most people. If you are lucky you’ll have a pension. Do you have any other sources of income, like rental income or existing annuities? Count those too.

3. Determine your income gap – Simply subtract your required expenses from your lifetime income sources. If the expenses are greater than income you will have an income gap. Most people will have an income gap.

4. Determine the effects of inflation – Your income gap will very likely increase each year as your expenses go up with inflation. A good inflation estimate to use is 3%. You can use a simple software program like Excel to show how inflation will increase your expenses over a long time period, like 30 years. This will let you know how much income you will need in later years.

5. Determine how you will fill the income gap – There are many ways to fill the income gap. You could have your savings in a balanced portfolio and withdraw 4% from them each year.

Or you could have all your funds in accounts that have no market risk, like fixed annuities or bank CD’s.

Many people will do a combination of both, having some assets in the market and having others in guaranteed products that have no market risk.

There is no right or wrong way. You have to find a strategy that meets your goals and allows you to sleep comfortably at night.

To download a free copy of “How To Avoid Annuity Traps” click here: http://retirementplanningmadeeasy.com/annuity-traps

To read the full article that accompanies this video click here: http://retirementplanningmadeeasy.com/build-your-own-retirement-income-plan-in-5-easy-steps/

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