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talking through how to build your personalized income distribution strategy how to make sure that you guys have the income that you want when you want and then it illustrates effectively throughout your life to meet the given goals that you guys have and there's a big issue that i believe we have in the traditional retirement planning space you'll often notice from watching our videos here in the our facebook group here as well as on youtube that we have a lot of issues with traditional advice oftentimes when a retiree comes in for retirement planning a lot of the traditional advisement model is making that retiree fit their goals to a given traditional retirement plan and i think it should certainly be the other way around it's it's a lot like advisors are trying to fit a square a square peg into a round hole as a as we if you will uh and so this is a big issue that we're going to try to meet and try to fix that specifically on the distribution side the income side here in today's presentation and talk through how based on the goals that you have based on the goals that actual people have how we can make that retirement plan fit those giving goals okay so um as we talk through retirement planning there is let me step back for a second as we talk through building a plan i believe everybody should have a plan that's built under something called a monte carlo and so for instance a big issue that we see already with traditional advice is when there's only one plan built for a retiree and there are too many things that we have to try to estimate going forward in the future for instance market environment what can we expect for future market returns if we're just building one retirement plan with one simulation through time as soon as we build that plan it's guaranteed to be wrong there are too many variables that we have to try to assume or predict now many of us don't have crystal balls that we can adequately predict moving forward in the future even us as retirement planners we don't have those crystal balls and so instead we try to replace prediction with uh probabilities okay and statistics and using something called the monte carlo where we're running a thousand simulations let's say and under those thousand simulations were varying returns through time and at the end when we have a specific goal let's say that's spending eighty five thousand dollars through time net of taxes and health care we then add health care and taxes on top of that uh based on the assets that this person has looking at all these varying return sequences through time we get a probability of success and again this is where a lot of people stop looking just at the probability of success and this is a big thing where we're starting to talk a lot about it in our practice that this number this probability success number is a great summary number but as with most summary numbers it doesn't tell the whole story and there's further context that needs to be added here for instance in the eight percent of failures what are we looking at from a failing standpoint okay and maybe we might be fine taking the risk with those eight percent of failures but again there's a lot of context that has to happen with this probability success we'll talk a lot about that as we go through this presentation but here's a big issue that i see with with traditional advisement that again really breaks the molds for what retirees actually want out of their retirement they have a number uh let's say 85 000 and so that's what you need to spend at the beginning of retirement and through retirement so yes we want to add health care and taxes on top of that and hopefully that's already being adequately done unfortunately in a lot of cases it's not um but then we're growing that through inflate for inflation through retirement so what you see this is basically just a uh income graph that we we took from our planning software and what we see here is this person prior to medicare is paying a little bit more for health care okay so there's an adjustment here where they're going to be paying for aca insurance and thus paying a little bit more for aca insurance so they have a few larger expenses here at the beginning of retirement and then we see later in retirement there's a dip here this is a married couple and one person is passing away and typically when one person passes away they don't that surviving spouse doesn't quite need as much to live on an ongoing basis but again what are some of the issues here is this really a realistic illustration of income need and generally with the discussions that i'm having with retirees not really and maybe you can kind of uh see where i'm going here but a lot of retirees again if we think about the natural health span of of your of your life for instance we know that when you those first 10 15 years maybe of retirement depending on when you retire are going to be your most active years and so typically people are wanting to spend a little bit more in those active years okay as we uh you know drift later into retirement as we've seen with a lot of maybe relatives that we know maybe our parents maybe our grandparents if we see if we think back into the day when they reach those higher 70s those 80 that 80 age range we often see that they're typically not spending as much as they did at the early part of their retirement okay so they don't need their maybe their income to adjust for inflation at the same rate or maybe they even see an income adjustment at that point but this kind of uh you know picture of taking income and just you know very brute force just growing it for inflation through retirement oftentimes doesn't mimic what an actual retiree wants it's oftentimes assuming we need a lot more income let's say in the back half of this stretch here and a lot less income in the first half of this stretch here so it doesn't really meet a retirees actual goals actual picture and so what are some of those common income and retirement goals that we see well kind of just speaking to a couple just out of the top of my head again spending more in the early years of retirement okay maybe a common thing that we see is is we work with a lot of people that were great savers okay well they were working they saved for retirement they often forwent a lot of the goals that they might have had they maybe didn't travel as much while they were working and growing a family because again they were constantly delaying future gratification if you will delaying until retirement and now that they're retired wanting to spend a lot more in those first early years make up for a lot of the travel that they missed out on well typically that means a lot larger budget early in retirement and maybe a smaller budget as we move through time as we age and do less spending less as well okay a lot of times we talk with retirees that uh maybe they want to leave a legacy to the next generation but not an unlimited legacy okay in terms of current dollars maybe that might be i want to leave a half million a half a million dollars to the to my two children or i want to leave a million dollars or there's typically some kind of cap where as i'm talking with retirees i ask okay let's say things go really well and you leave five million dollars to the next generation okay and typically i see a you know expression come across their face well that that that feels like it'd be way too much i want to leave a lot but i want to i want to leave some but i also want to enjoy a lot more of my income if results look better than we initially might expect so there's all of these goals that again this traditional financial retirement planning model income model doesn't exactly meet okay and so um it's very important to understand as we move through this that we are not building a plan or you should never build a plan and have that plan be the end of it meaning that you build it at the beginning of your retirement and that's the plan that that you stick with through retirement oftentimes as we saw we've seen in the last few years as we'll see as we go through this presentation a plan has to be dynamic it can't be static for instance when we talk about certain things like tax planning again when we're talking about roth conversions there's a lot of things that can affect how much we want to convert from year to year okay the ongoing growth that we're having in our traditional iras the tax changes that we may see throughout retirement there's changes that our plan needs to adjust and change moving forward in the future well as we think about retirement goals as well when we're laying out those thousand simulations okay some of those simulations are gonna look very good return periods look very good well if we start to see some of those simulations if we're just spending the same static income that we originally planned for one of two things is going to happen we're well i should say if we don't adjust our spending we're going to leave a lot more left at the end of our our life and so just like everything else within our retirement plan our income model should also have some dynamic elements to it again we'll kind of talk through and explain what this means as we move through this presentation but let's talk through a few hurdles that we face in retirement a big one is longevity risk so you carry the most longevity risk the very first year that you retire without knowing how long we might potentially live it gets a little bit difficult to you know figure out how much we can safely spend right now right because spending an extra ten thousand dollars right now might eliminate a hundred thousand dollars of extra safety down the road depending on what given trial that we see well as we move through and age through retirement our longevity risk goes down so spending ten thousand dollars later in our plan let's say within the last five years of our plan we obviously know we're likely not going to need that extra ten thousand dollars at the beginning of retirement we don't know we don't know what the trajectory looks like going forward in the future we don't know which one of those thousand trials we might see so there's a lot more risk at the start of your retirement how do we navigate that from an income distribution model a lot of a lot of planners will just try to build in extra levels of safety and that's also not the answer because building extra levels of safety is good if we're just trying to gain the highest probability of success but it also might mean that you're delaying retirement maybe working a year or two extra in order to have those extra levels of safety well again that doesn't necessarily uh you know offer you the retiree a ton of benefit when the the brute force answer is just levels of safety so we need a better model from that standpoint um for instance in fact as we think through let's say something like withdrawal rate planning i've taken this graph this is actually the rmd withdrawal rate that the government forces you to take but nonetheless it illustrates my point of as we move through time okay when we think about withdrawal rate planning again often quoted four percent rule how we peg our uh our starting income off of again we've talked about how we might disagree with that in a lot of different ways and how withdrawal rate planning doesn't exactly build a very comprehensive plan for you but nonetheless the trend of as we age because we're eliminating that longevity risk we know that we could theoretically raise our annual withdrawal rate again we might have a legacy that we want to set aside for the next generation but up and above that legacy once we have that legacy met again as our our performance is doing well or as our accounts are growing or maybe not even growing maybe staying static after our withdrawals again theoretically if we're trying to again take the most from our retirement earn the most ourselves we can raise our withdrawal rate through time because again the reason the withdrawal rate is backed off is again because of this idea of longevity risk we don't know what the future holds and so we need to essentially pair back the distributions we're taking at in early retirement to try to overcome that withdrawal rate risk well as we age obviously that longevity risk um fades out here's the other big issue that i see okay when we think again i'm a huge fan of a monte carlo i think every retirement plan should have a monte carlo and obviously with any monte carlo it's the variables that that that you enter in determine how good that that monte carlo is so a monte carlo alone isn't enough if you put garbage in you're going to get garbage out so again there are additional considerations there but here's another big hurdle that i i think we face and is often unmet by you know retirement planners in general when we run a given plan okay by definition we're going to see a fairly large distribution okay we're going to see certain trial periods that likely look very bad and so at times that can run the risk of roon or that can illustrate out a risk of roon that delivers our our losses our you know the reason we're not at a 99 probability success we also have what i would call pure successes in there that that would be a range where again let's let's say your goal is to spend a certain amount of income and you want to leave a certain amount left to the next generation well there's a narrow band there where we're essentially meeting that let's say that's a fairly average trial or or something like that or maybe it's a a portion of trials that you're able to spend and leave let's say if your goal is is leaving a half a million dollars there are going to be a number of illustrations monte carlo simulations in there where you're leaving between half a million and maybe a million dollars and so that that is exactly what you want but then there's also again we talk about problems there's good problems they have and bad problems to have and guess what both of those problems we need to deal with because at the end of the day they still are problems there is a problem of too much success and again that would be a good problem to have but nonetheless that means that you know as you're spending that that minimum that you want or that that amount that you want um there are going to be certain trials where the returns look very good they look very good for your retirement and so we could adjust spending higher but if we keep with that spending goal it ends up with you leaving a significant amount to the next generation and maybe you don't want to leave a significant amount to the next generation but this static traditional advisement in retirement planning again basically you know doesn't factor in any of this at all doesn't deal with any of these problems well guess what yeah you leave 10 million to the next generation if results look good i guess you can just pat yourself on the back and we were lucky enough to have that simulation play out and i don't love that answer because again you guys have saved this money up to this point i want you to enjoy the money i want to make sure your retirement goals are met not to just have incredibly excess money left at the end that whether it goes to the next generation whether it goes to charity whether it goes to whatever there's more that you could realize and enjoy while you're still living and so let's talk through a couple different income models and show how it wildly can change the probability of success now i said at the beginning that we shouldn't just focus on the probability of success but just for simplicity here i'm going to be focusing on the probability success and using that as kind of our gauge for how this can change retirement planning based on these different income models income distributions that we talk through and what you'll notice by changing the income distribution model we see results change wildly okay and so as a baseline first what i'm starting out with this person has uh you know about a little bit over a million and a half dollars in their retirement in retirement savings and they're looking at spending 85 000 net of taxes and health care is kind of the initial goal that they laid out okay and first off we're going to show no inflation adjustment okay so obviously we want to adjust for inflation into some capacity because we know that as we've seen this last year inflation's running very hot inflation is a consistent thing we've seen through time it causes us to need to take more income need income raises to have the same purchasing power that we did at the starting year let's say and so this is a very unrealistic we're just using this as a baseline but this person uh showing no uh inflation just needing that 85 000 net of net income plus healthcare and i actually did adjust healthcare for inflation here so there's a slight inflation adjustment but we noticed that they're at a 99 probability success which again is generally thought of as a very good thing they have a safe retirement and they're leaving about a million and a half in current dollars very important to note left in the next generation okay what if we go and i would call this very brute force income method with no inflation what happens if we update this with inflation with some kind of inflation target okay and we're updating it with a two and a quarter percent inflation so now again we're going back to that what i would say is more of an unrealistic model for a income plan we're taking that 85 000 and we're just assuming that they need to spend that 85 000 through time and they just are going to continue to spend that 85 000 regardless of what phase of retirement they're in okay so again i think that's unrealistic i think there are you know adjustments as we move through time we'll talk through a lot of research that has gone into defining your income distribution model but notice what happens to the probability of success now again we shouldn't focus just on probability success but let's say we are just focusing on probability success and they jump they drop down to an 84 probability success so they now have 16 percent of cases that are failures okay we see that the income or the the terminal value that the surplus that they have left at the end basically cuts in half and so now we start to see the toll that inflation can have on someone's situation and so what happens if this retiree and maybe they might be fine with an 84 probability success but let's adjust this down let's say it turned from a 99 down to in the 70 range and all of a sudden this retiree isn't exactly comfortable retiring anymore well are they not comfortable retiring anymore because of the bad income model or are they not comfortable retiring anymore because they don't have enough assets to meet their goals well as we'll start to walk through as we start to mimic more of what i would say a realistic income distribution model for a retiree they may actually be a lot safer in retirement than they originally think but again the problem comes to the bad inputs it's assuming that we just have this unrealistic goal of of of 85 000 net uh you know af growing for inflation through time and there's no adjustments at all okay and so right off the bat what i often see in working with a lot of retirees is uh we might in a plan illustrate that someone is adjusting their income to it through to inflation uh each and every year but in reality i see that rarely happen i see that we rarely again we certainly can but i i don't see a need i don't see retirees calling up and saying hey okay we had a six thousand dollar distribution last year now to adjust for inflation we need to raise that to you know uh 6 300 or whatever it might be okay in fact what i see is typically the batching of inflation adjustments so for instance somebody might take a given distribution six thousand ten thousand dollars a month and only adjust that let's say every five years or every three years or whatever that might look like rather than continual adjustments batching those adjustments and by batching those adjustments again we can realistically see that we're not adjusting and raising our income each and every year we're doing so in batches and so we're having a little bit less stress on our portfolio well in terms of taking that same exact situation that we were just looking at but looking at two and a quarter percent inflation adjustments every five years and that doesn't mean that we're adjusting just two and a quarter percent that means that uh that in the background we're having two and a quarter percent adjustments and then on that five year time period it's as if we've made those five years worth of two and a quarter percent adjustments just to clarify on that front but we see now that this person goes from an 84 probability success success to an eighty seven percent and yet i still don't necessarily agree with this overall income model but nonetheless you can see that it alleviates some stress on this person's portfolio they add about an extra hundred thousand dollars again in current dollars so in future dollars that would actually be about 200 000 that they add to their retirement so are you someone that's going to want and and want to illustrate out inflation adjustments each and every year or some kind of batching of adjustments okay a lot of research has gone into trying to mimietiree's goals uh you know on a wide base on a general basis and obviously everybody's goals are going to be slightly different but on a very general basis this is essentially what a lot of research has led to something called the hatchet distribution and basically what the hatchet distribution is you'll notice we have other retirement income here on the bottom and portfolio withdrawals and so while someone is either delaying both social security benefits delaying one social security benefit um and whatnot they're taking a lot more from their portfolio early in retirement and taking less as we move through time now this is inflation-adjusted income just to make it easier to understand but again what we see oftentimes is someone taking a lot more in income at the early part of their retirement and it fading out through time maybe that might be adjusting slower to inflation maybe that might be just spending less because again as we get older and we are doing less activities we have less hobbies we have less goals we have you know in general are just doing less things we likely need less income ingly and then they'll notice a little bit of a jump there at the end to deal with some of those later year health healthcare expenses and so again what we see is this is for a lot of retirees a lot more realistic picture higher spending in the first years and then fading through time and notice this is a completely different income distribution model for someone's retirement it's going to deliver a different probability of success as we will show here in a second and this is why they call it a hatchet essentially we can kind of see this diagram here of this being a hatchet and you'll notice the handle and then the face of the hatchet and whatnot so they call it the hatchet distribution but again the main thing being that it's more of a dynamic model it's trying to illustrate what an actual person's life looks like rather than just brute force we're just increasing for inflation through time and it leads to something called this decreased real spending smile so this idea that the again we have our minimum budget okay our minimum budget is our basic living expenses that would be things like shelter food utilities um all of those very basic living things that again think of a covid lockdown if you will a complete shutdown of the world how much do we actually still need to spend if we're just sitting at home doing just normal kind of low cost hobbies what's the minimum that we need to spend to basically stay alive and cover our basic living expenses okay we generally want that to increase pretty brute force for inflation but then we have on top of that are what i would say more discretionary spending and again earlier in retirement for a lot of retirees that might mean travel that might be you know different hobbies that they want to do more fly fishing spending time with their grandchildren purchasing a home a second home a vacation home up in the north woods uh in a cabin that they can do a lot of summer activity with their entire family with so we see again higher spending at the first part of retirement and then that slowly drift through time so this is that spending smile and so what happens if we try to essentially mimic that for retirement how does that change our distribution model uh john i appreciate it looking good happy birthday by the way john i just saw your comment um so modeling this hatchet distribution model where we have these more realistic changes through time okay well what does this look like and kind of just illustrating this out what this looks like is we have 50 000 of basic living expenses including health care we want that to increase normally for inflation again that covers our shelter our you know food utilities things that will increase through for inflation that we want to make sure we're adjusting for we want to brute force adjust for that next we have a 35 000 what i would call age based budget this is kind of mimicking that spending smile if you will where we want thirty five thousand dollars at the beginning of retirement but we don't need it to adjust for inflation we're fine with that fading out due to inflation because we're probably going to be spending less with that what i would call that age based budget again that's more of an active budget where early in retirement while we're very active while we're wanting to do all of these things we want that budget to be higher and then let's say a fifteen thousand dollar you could call it a travel budget a hobby budget something up and above that for the first 10 years and illustrating this where if we think about it before we were just looking at this person spending 85 000 a year now we're actually spending for those first 10 years spending a hundred thousand dollars okay certain elements are adjusting for inflation and not not adjusting for inflation um but again we're spending a lot more in those first early years and then fading that out through time again trying to simulate more of a hatchet distribution more of a realistic distribution and now what happens again before if this person was just assuming that they needed that 85 000 through time growing for inflation they might have forgo on gone retiring a year earlier they might have worked a year longer because they weren't happy with that probability success they thought there was too much risk on the table but now when we model more of a realistic distribution notice they're at a 91 probability success certainly in that range that we'd probably be a lot more comfortable we're spending a lot more in the early part of retirement and again adding about a hundred thousand or inflation-adjusted dollars going into the future about 200 000 to their surplus and so we're building a much safer retirement that realistically meets their goals so this is why again with traditional advice it doesn't really meet retirement retirees needs often it's very brute force that's what's the simplest way we can do this uh and unfortunately typically leads to people either not spending as much in certain phases or working longer or just having a worse retirement plan it's having the retiree fit to that retirement plan and so ultimately you need to decide what you want in life okay it's easiest to do this in real terms thinking about real spending how much do we want to spend in the early part of retirement do we want a little bit more spending and then as we age do we believe it will drift as we think through relatives i you think through other people have gone through this experience talk to some of those people talk through how has their retirement how has their spending changed and again you have to translate this to real dollars inflation-adjusted dollars how's their spending changed from let's say when they were in their 60s to when they're in their late 70s or 80s okay we can model anything that you ultimately want and we'll notice that modeling different income distributions completely changes the results but we still have this hurdle that we face even with this hatchet distribution okay modeling this hatch distribution there are certainly still going to be cases where as we saw at 91 probability success there were certainly going to be and by the way this isn't for this person's situation this is just taking that previous slide that i had before there are certain situations where that that situation still has failures and certain simulations there are still these successes that i would say are maybe the majority of those simulations everyone's going to be different as far as what they would classify as a success based on how much they're able to spend and how much their they want to leave at the end and then we have these too much success so how do we still deal with this because the hatchet distribution doesn't exactly deal with us well we can deal with this by basically dynamic spending and there are a lot of different algorithms and ways that we can build this type of model but the whole idea here is we have our let's say our hatchet distribution set up as our if we're in the top quartile or top percentage of our simulations as we move through time and again this comes back to needing a dynamic plan we can adjust our spending up and enjoy more of it ourselves but again to have that we need to have defined goals on what do we want to accomplish in retirement do we want to leave a legacy great how much do we want to leave do we want to start with a bare minimum of spending that dynamic doesn't have to go both ways it can go both ways it can mean an adjustment down and an adjustment up but it can also mean that we have a floor and we're only going to adjust up if we see good trials so there's all of these different variations with dynamic spending let me start to talk through a couple of these a very popular way to do this dynamic spending again there are still the devils in the details if you will but there are still a lot of changes and adjustments that can happen around this but dynamic spending based on guard rails so what this would look like is i just took a sample retirement plan and looking at i believe in this case this is someone's this is more of a brute force type of retirement plan where this person before social security is spending more from their assets okay and then this is looking at their withdrawal rate for their portfolio they're spending more from their assets while they're delaying social security but once they're on social security they're spending very little from their assets in terms of the given withdrawal rate so once they're on social security they have a very safe retirement okay and so basically what guard rail planning would do would look like is we set guard rails okay we set a high end that you'll see in red and then we set a low end that you'll see in green and so with this red or green we are going to adjust our spending up and down based on these given guard rails so if we start to hit and i believe i'm illustrating a seven percent withdrawal rate here if we see poor market performance and our portfolio isn't set up properly or maybe we're fine accepting some poor market portfolio and uh uh some fine uh maybe we're fine accepting a little bit more risk within our portfolio sorry there um and so if if we see that given risk we might be fine adjusting our spending but the idea here is as we start to hit this 7 withdrawal rate we want to adjust our spending down so there are two ways that you can essentially have safety add safety to your portfolio we can add it through allocations and basically have again very conventionally we obviously don't agree with this would be a 60 40 portfolio and you're just keeping that safety on an ongoing basis to make sure that you're never in that large of a drawdown that's completely fine there's also a way and you can combine these two ways as well we can combine we can add safety to our situation by adjusting our spending so adjusting our spending through time that if we see a market downturn we adjust our spending now and again every retiree will have a different level that they are willing to accept different goals again that's the whole point of having a dynamic plan but again the idea here would be if we had this seven percent withdrawal rate we adjust our spending now to a more acceptable withdrawal rate if we hit this three and a half i believe i have this at withdrawal rate we're fine adjusting up and so again as we move through time we're adjusting our spending relative to make sure that by the end of our retirement we're leaving our given goal legacy as well as being able to enjoy as much of our income as as we possibly can this would be something looking at more of a hatchet distribution strategy so we see spending um you know having these phases of spending where we're spending a little bit more and then once again adjusting through time now if these this person in this given trial sees a market crash maybe even in this hatchet distribution they're backing the travel budget off again this happens this needs to happen with discussions with the client and the advisor but having a dynamic spending that adjusts to guardrails so we have some awesome software that can do this okay it's there are no good off the shelf software packages that accomplish everything we need to it's the combination of you know combination of software packages as well as filling in the gaps of any software package through programming that we've done proprietarily this is an awesome solution that we have from a planning software standpoint that essentially shows and illustrates through time with those monte carlos what dynamic income would spending would look like and so now we're looking at again that fifty thousand dollar minimum living expense we're using that same eighty five thousand dollar goal okay so we have fifty thousand dollar minimum living expenses so their essentials here is four thousand one hundred sixty six dollars a month their ideal retirement income is eighty five thousand okay so seven thousand eight and eighty three dollars a month and then they want to leave a half million dollar legacy in today's dollars and so that's going to adjust for inflation through time and so based on this we can set parameters on how uh how acceptable is it to have inflation have income adjustments we can uh it's basically a threshold here we can allow for a lot of income adjustments and that would mean any kind of ups and downs in the market we'd be adjusting our income or we can do so on a very infrequent basis so we'd have to see very good multi-year results where our portfolio has grown to adjust our spending up but nonetheless we can see based on our discussions with this given person right off the bat where they're able to spend about 1700 more than they were originally thinking again leading to this dynamic spending and you can see basically as their portfolio adjusts up and down we can see the given kind of adjustments we would we would make at this point and it shows the gross income and as well as the after tax so we can also translate this to historical results now i don't love the idea of just using historical as the one lens that we look through for the future i guarantee you the next 100 years will not look exactly like the last 100 years and so this is why i typically lead to monte carlo simulations rather than just using historical but we can certainly use historical as one of those simulations and so what we see if you look at a rolling again i believe this person's retirement we illustrate at 37 years if we look at a rolling 37-year period we can see essentially how based on their given portfolio historically how much they could have optimally taken was still leaving that half million dollar goal and what you'll notice is there is a wide gap between this notice they never really come close to needing to go below that minimum level in fact they don't even touch that in green here that desired monthly income level in fact they're able to take quite a bit more as we start to dynamically adjust through time so what does this look like again through each one of these monte carlos and i eliminated a lot of these uh you know ongoing percentiles i'm just showing the worst media and best trials here but we can see as we start to illustrate their income through time in terms of real terms okay we can see that oftentimes against starting at a higher income goal and adjusting through times there are some adjustments in the median trial it adjusts up and then it adjusts down okay it's very important to make sure that you understand what these given adjustments can be the worst trial we start a little bit higher here in real terms and then just like this hatchet distribution strategy we're fine going a little bit lower and it ultimately goes quite a bit lower okay now the best trial would be again returns looking very good through time and notice there are some adjustments here again first a couple years we're adjusting a lot higher then there's a slight adjustment through time and then we're able to adjust significantly higher as we move through time but the point being is using these guard rails we can see how our income can adjust through time and so again this is another kind of overlay on top of this hatchet distribution that again if to deal with those really good too much success type of trials and have our income adjust ingly okay and then we can also see this in terms of legacy and you'll notice that with all of these given trials we're trying to leave at least a minimum of a half a million dollars in real terms uh in some of these trials again based on some really good trials it might mean leaving a little bit more in this person's situation a little bit more than a million and a half by the end of their life in real terms but again notice that as we adjust our distribution through time it's going to adjust our income through time but the point here being dynamic adjustments to allow for again trying to solve for the end meaning the legacy and the surplus that you have at the end and obviously having a surplus still means you have levels of safety there at the end if there are long-term care needs things like that but adjusting and taking more of your income from your assets through time enjoying more of the assets the hard work that you've saved up through time okay and so a lot of this again as we start to talk through these different income models it's about plugging the leaky bucket if you will of retirement income planning and again traditional advice has a ton of holes within this bucket we often talk about a leaky bucket in terms of a taxable account but retirement planning again if you're not doing it properly can have a lot of other leaky buckets and ultimately it's your wealth that's leaking out of that bucket whether it's from poor income modeling that you're either working longer or taking less from your situation whether it's from having a poor tax plan things like that it's your wealth that's ultimately being leaked out by not having a strong retirement plan so a lot of this is coming back to making sure that we meet your goals and plug a lot of these holes in this leaky bucket here now we've covered a lot on the income distribution plan front if you're watching this on on youtube or maybe you're you're just just recently joined our safeguard wealth management facebook group just know that as with all topics that we talk about in retirement planning there is a forest of retirement planning we've focused on income distribution here in this video but there is obviously a lot more that we need to be coordinating and ultimately comes into building the best plan for your retirement and so don't forget about all those other things as well we talked just solely on the income distribution and how that can change and either increase the value take value away from your retirement allow you to take more income from your retirement but there are all these other topics that are on our safeguard wealth management youtube channel that i'd urge you to watch as well the point being though as we think about income modeling as we think about anything in retirement okay it needs to be dynamic your plan needs to be dynamic and ultimately that plan has to meet your needs and everyone's needs are different there might be some ideas in this presentation that were very interesting to you some of that again maybe you're not as thrilled about that's completely fine it's about what goals you have and knowing that there are a lot of different solutions to meet those goals but ultimately that plan needs to be built for you not for based on our system and how we you know we basically model everybody the same that's not retirement planning the retirement plan has to be built and customized personalized to you so always remember you don't need more money you need a better plan hopefully you guys found this interesting talking through income distribution as we move forward into the future i'll talk a lot and have different trainings either on in this safeguard wealth management facebook group or on our safeguard wealth management youtube channel around different strategies for dynamic