Accumulation vs. Guaranteed Income

It seems that most advice is about accumulating the most amount of wealth possible for retirement. But is that a good model? Is that the right model? Is that the best model?

I don’t believe an accumulation model is the “best model” for most Americans. Americans should not be risking all of their money on a “proper mix of stocks, mutual funds, and bonds.”

What your investments don’t return as much as planned?

And then the other big question is: What do you do when you get to retirement? How do you turn an accumulated amount of money into retirement income? Do you move you money to fixed-return products? If so, then what’s the rate of return going to be on those products in five, 10, 20-plus years?

Of course, the answer is: We have no idea

Actually, all the answers with an accumulation model are that we have no guarantees. Financial planners have investment models that “should” return X, but there is no guarantee. And, again, what are you going to do in the income phase? Assume a rate of return and hope you don’t run out of money when spending principal to generate the needed retirement income?

I don’t like the “what ifs” and I think the accumulation model for most American is not what’s best for most clients

Client example

I created a nine-page summary with an example client’s data explaining why readers should consider using a guaranteed income model to secure their retirement versus an accumulation model. I think readers will really find the summary helpful when trying to fully understand if an accumulation model or guaranteed income model is the best course to follow.

Download the example

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Roccy DeFrancesco, JD, is author of

, and founder of The Wealth Preservation Institute. The

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