Income not Net Worth
Robert C. Merton, a Noble Prize winning economist and Professor of Finance at MIT's Sloane School of Business, wrote an article in the Harvard Business Review titled "The Crisis in Retirement Planning".
The key take from his article was this quote:
"Our approach to savings is all wrong; we need to think about monthly income, not net worth"
I believe that the most important strategy to maintain your current lifestyle, adjusted for inflation, and never run out of money, is to concentrate on Protected Income as your first priority.
Protected Income is income that is:
Examples are:
Social Security, Pensions and Lifetime Annuities with highly rated Insurance Companies
The key take from his article was this quote:
"Our approach to savings is all wrong; we need to think about monthly income, not net worth"
I believe that the most important strategy to maintain your current lifestyle, adjusted for inflation, and never run out of money, is to concentrate on Protected Income as your first priority.
Protected Income is income that is:
- Backed by the government or financial institution
- Guarnteed for Life
- Increases to offset inflation
- Safe from Market Volatility
Examples are:
Social Security, Pensions and Lifetime Annuities with highly rated Insurance Companies
