By LouAnn Schulfer, AWMA, AIF, Accredited Wealth Management AdvisorSM, Accredited Investment Fiduciary

Planning for retirement can seem intimidating and is often filled with ambivalence.

On the one hand, we fantasize about how great it would be to have a schedule filled just with our own personal activities, not having to report to work anymore. On the other hand, it’s often scary to think about a life without the paycheck we’ve received and relied upon for our entire adult lives.

Fewer and fewer people are retiring with a guaranteed pension, therefore need to rely on their own personal retirement accounts and savings to pay bills and lead the lifestyle they want.

Structuring income from your nest egg for the retirement chapter of your life can feel like a daunting task. I ask every new client two crucial questions: “What is the most important thing I can help you with?”, and, “What is your biggest fear?” When facing retirement, the answers are consistently some variation of, “I would like a comfortable retirement,” and, “I don’t want to run out of money,” due to a significant market loss or spending too much too soon.

Some even say they’d like me to help them so that they spend their last dollar on their last day. Wouldn’t that be great?!

There are few absolutes that apply to everyone in retirement planning because every situation is different. One of those absolutes is to maintain a level of flexibility in your retirement accounts.

Diversification is important not only in your investments but also in your sources of retirement income. You may choose an annuity for guaranteed income.

While the guarantee may be great, the flexibility may be limiting. The contract likely includes surrender charges for taking lump sums of money out (usually in excess of 10 percent) within the first several years, and the guarantee either changes or goes away if excess money is withdrawn.

These rules are not necessarily bad as long as you fully understand and build your strategy around them.

Pair that with one or more accounts in your strategy that have full liquidity so that money is accessible in lump sums for things like a new vehicle or a vacation. If you are analyzing investments that produce income, consider the flexibility to start and stop income when you want. Sometimes in retirement, people end up not spending all of the inflows that they are receiving. It’s great to have the ability to stop the income, reinvesting into new shares and/or deferring to avoid withdrawals that result in income taxation.

Consider the flexibility to completely sell out of your investment. How do you liquidate when you want to? Your “best” investment today may no longer be desirable in the future. Markets change. Interest rates change. Your needs will change.

Your sources of retirement income should be diversified, complimentary to each other and have a degree of flexibility. You’ll know in your stage of planning when you reach this point because the outlook for the future is less daunting and is often replaced with a sigh of relief.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. Investing involves risk including loss of principal. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio.

Diversification does not protect against market risk.

(Author’s note: Due to industry regulations, I am prohibited from responding to any online comments. I welcome you to contact me via e-mail: [email protected]).LouAnn Schulfer is co-owner of Schulfer & Associates, LLC Financial Professionals and can be reached at (715) 343-9600 or [email protected].

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC. Accredited Wealth Management Advisor SM and AWMA® are trademarks or registered service marks of the College for Financial Planning in the United States and/or other countries. The Accredited Investment Fiduciary® designation is earned through the Center for Fiduciary Studies.