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Decumulation: The Hidden Strategy That Could Save Your Retirement

by Eric Seyboldt

For decades, retirement planning has revolved around a single goal: building the biggest nest egg possible. Yet, for many retirees, the moment the paychecks stop, an unsettling reality sets in. The challenge is no longer how to grow their savings—it’s how to make it last. Every withdrawal feels like a gamble. Every market downturn feels like a threat. Retirement is supposed to be a time of peace, not sleepless nights spent staring at spreadsheets.

This is the crossroads where many retirees find themselves today. The solution lies in a concept few have mastered: decumulation. Not just withdrawing money from savings, but doing so in a way that balances income, stability, and long-term security. It’s the missing piece that turns financial anxiety into lasting confidence.

WHY DECUMULATION MATTERS:
Retirement changes the rules of the game. Accumulation—saving and investing for growth—is no longer the primary goal. Now, it’s about preservation and creating a reliable income stream that withstands time and uncertainty. Without a decumulation strategy, a strategy for spending down your retirement funds, even well-prepared retirees risk running out of money—or worse, spending their golden years paralyzed by fear of spending at all.

Consider the stories of two retirees:

• Margaret’s Misstep: At 65, Margaret retired with $1.2 million in savings. Confident she had more than enough, she began withdrawing $60,000 annually. But after a few years of market downturns and unexpected healthcare costs, Margaret realized her savings were depleting far faster than expected. Without a strategy, her nest egg couldn’t keep pace with her needs.

• Tom’s Triumph: Tom, on the other hand, retired with $800,000—less than Margaret. But he partnered with a financial advisor who helped him create a decumulation plan. By incorporating dividend-paying stocks, annuities, and a bond ladder, Tom maintained steady income while keeping a portion of his portfolio growing. Today, at 75, Tom not only enjoys a comfortable lifestyle but also has funds set aside for his grandchildren’s education.

THE DEEPER BENEFITS OF DECUMULATION:
Decumulation isn’t just about ensuring your money lasts; it’s about giving retirees their lives back. A well-crafted plan can mimic the security of a paycheck, providing predictable income while preserving assets for future needs. It integrates tax planning, inflation adjustments, and contingency funds for healthcare, leaving nothing to chance.

With tools like dynamic withdrawal strategies and decumulation platforms that adjust to market conditions, retirees can achieve both stability and flexibility. This approach not only safeguards against outliving savings but also offers peace of mind—priceless in retirement.

HOW TO IMPLEMENT A DECUMULATION STRATEGY:
Implementation begins with a comprehensive review of your financial situation. First, identify essential and discretionary expenses. Then, match these needs with reliable income sources such as Social Security, pensions, or annuities. Next, allocate a portion of your portfolio to income-generating investments like dividend-paying stocks and bonds. Diversification remains key—alternative assets and inflation-protected securities can add stability.

Tax efficiency should not be overlooked. Consider which accounts to draw from first to minimize tax burdens—Roth IRAs, traditional IRAs, and taxable accounts all have different implications. Healthcare contingencies must also be funded through health savings accounts or long-term care insurance. Regular reviews ensure your plan adapts to changes in market conditions and personal needs, keeping your strategy on track.

Margaret’s story is a cautionary tale, but Tom’s is a beacon of hope. The difference wasn’t in how much they saved but in how they planned. Retirement is far too precious to leave to chance. Decumulation is not just a financial strategy—it’s the key to a worry-free future.

The time to act is now. Every day without a plan is a step closer to uncertainty. Call today to ensure your retirement years are as golden as they should be. Your future self will thank you.

Reach out to us for a complimentary, 10-minute consultation call. Let's explore together how we can help you protect your assets, ensuring your golden years are as fulfilling and worry-free as you’ve always imagined. Give us a call today at 614-943-2265 to schedule your consultation. Let's make your retirement dreams a reality!

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Inflation: The Silent Thief of Retirement Dreams

Client: "Eric, I’ve worked hard my entire life, saved diligently, and now, just a few years away from retirement, I’m terrified about inflation. How can I protect my savings from losing value as costs keep climbing?"

Eric: Your concern is both valid and pressing. Inflation isn't just an abstract economic concept; it's a silent thief that erodes the value of your hard-earned savings. As we approach 2025, several factors are converging to create a challenging environment for retirees: persistent inflationary pressures, escalating healthcare costs, and rising expenses in essential areas like housing and food.

Let's delve into the specifics. In October 2024, the U.S. inflation rate rose to 2.6%, up from 2.4% in September.

While this may seem modest, it's crucial to recognize that certain sectors are experiencing more significant increases. For instance, healthcare costs have risen by 12% over the past year, outpacing general inflation.

Housing expenses have also surged, with shelter costs increasing by 0.4% in October alone.

The cost of having a home health aid come to your home to help you during your assisted-living years has increased by 7%/yr over the last two years.

Food prices, a daily necessity, have climbed by double digits over the past year, impacting household budgets.

These figures underscore the reality that inflation affects retirees more acutely, as a larger portion of their income is allocated to these essential expenses. To safeguard your retirement savings against this erosion, a multifaceted strategy is essential.

First, diversification is paramount. Traditional fixed-income investments, such as bonds, may not keep pace with inflation. Consider incorporating Index Annuities or Real Assets (like precious metals and the Bourbon portfolio mentioned later in the newsletter) into your portfolio; these are designed to adjust with inflation, preserving your purchasing power. Additionally, equities, particularly in sectors like healthcare and technology, have historically outperformed inflation over the long term.

Next, reassess your withdrawal strategy. The conventional 4% rule may no longer suffice in an inflationary environment. Implementing a dynamic withdrawal plan that adjusts for inflation can help ensure your savings last throughout retirement. Delaying Social Security benefits is another effective tactic; each year you defer up to age 70 increases your monthly benefit, which is adjusted for inflation, providing a higher guaranteed income.

Real estate, in particular, often appreciates over time and can generate rental income that keeps pace with rising costs. However, it's important to approach these investments with careful consideration and align them with your overall risk tolerance and financial goals.

Inflation is a formidable adversary, but with proactive planning and strategic adjustments, you can protect your retirement nest egg. The key lies in staying informed, being adaptable, and making decisions that align with the evolving economic landscape. Together, we can develop a plan that not only preserves but enhances your financial security in the face of inflationary pressures.”

Inflation may be an inevitable part of the economic cycle, but it doesn't have to derail your retirement plans. By taking deliberate and informed steps today, you can ensure that your hard-earned savings continue to provide the lifestyle and security you've envisioned for your golden years. Let's confront this challenge head-on and fortify your financial future."

Contact us for a free, brief 10-minute consultation. Together, we can discuss ways to safeguard your wealth and ensure your retirement years are as enjoyable and stress-free as you've envisioned. To arrange a complimentary 10-minute consultation call us today at 614-943-2265. We're here to help turn your retirement aspirations into reality.

Fixed annuities can be an essential component of a well-rounded retirement strategy, offering security, predictability, and efficiency in financial planning.

Here are current fixed annuity rates and their durations from Top A-rated carriers (subject to change at any time, not FDIC insured):

Rates Just Popped Up! Don’t Wait To Lock These Fixed Annuity Rates In Today!

3-year: 5.20% (under $100k Deposited)

3-year: 5.15% (over $100k Deposited)

5-year: 5.15% (under $100k Deposited)

5-year: 5.35% (over $100k Deposited)

Please feel free to call Eric at 614-943-2265 if you’d like to ask any questions or request information on these fixed annuities or other retirement topics that are on your mind.

REAL ASSETS, Invest Like the Ultra-Wealthy 

Have You Considered Adding ‘Real Assets’ like Gold or Bourbon to Your Investment Portfolio?

Given the current economic uncertainties, many wise investors are opting for physical assets to protect their retirement savings. Tangible investments such as gold and even bourbon barrels are growing in popularity. These Real Assets serve as a robust defense against the consequences of excessive money printing and rising prices. They also provide excellent diversification opportunities during periods of economic stability.

Historically, physical assets have consistently outperformed other types of investments during economic downturns and market instability. They offer reliable protection against potential financial upheavals. Including tangible assets in your investment strategy can be both wise and rewarding.

Considering today's economic volatility, investing in physical assets could be a prudent way to maintain the resilience of your financial plans. Would you like to explore how these tangible investments might enhance your portfolio?

Allocating funds into the asset class known as “Real Assets” may be a strategy that you should consider.

Ask us how to Rollover a portion of Your IRA or 401k To A BOURBON IRA (www.bourbon.fund/how-it-works/) or a GOLD IRA (see link below) and:

• Safeguard your assets from the collapsing dollar

• Incorporate the ‘REAL ASSET’ class into your portfolio like the ultra-wealthy

• Hedge against the current high-inflation conditions

• Protect your retirement assets against economic crises

Just get in touch. We make it easier than ever.

Feedback or Questions?

You’re invited to get in touch with us if you’d like to find out how the Novus Financial Group can help you on your journey to a happy, fulfilling life in Retirement. 

Office: 614-943-2265

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Investment advisory services are offered by duly registered individuals on behalf of CreativeOne Wealth, LLC a Registered Investment Adviser.

The content we provide here isn’t financial advice and cannot be taken as such. Please speak to your financial advisor before making any investment decision. Also, note that every investment comes with its risks and drawbacks. Lastly, we would like to remind you that past results cannot guarantee future returns.

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