Happy Friday Reader ☀️

Welcome back to Safe Money Weekly, where I share retirement income planning strategies, case studies, and ideas to help you retire with more confidence and less uncertainty.

This week’s case study is one of the best examples of my overall retirement planning philosophy in action.

The goal isn’t simply to maximize returns.

And it isn’t simply to create as much guaranteed income as possible.

It’s to build a retirement plan with enough predictability and dependable income that you can be much more strategic with everything else.

Create the safety first.

Create the income you need.

Then let the rest of your money focus on what it does best over long periods of time: growth.

That’s exactly what happened in this case.

Jeff and Stacy are both 59, have approximately $1.9 million saved, and plan to retire at 65.

Their goal is to spend about $15,000 per month in retirement.

But based on their current plan, they were already on track to support approximately:

$17,835 per month.

So they weren’t trying to rescue an underfunded retirement plan.

They were already in great shape.

The question was whether we could structure their assets more efficiently.

Could Their Fixed-Income Dollars Work Harder?

Jeff and Stacy’s original portfolio was approximately 60% stocks and 40% bonds.

That means roughly 40% of their money was already allocated to fixed-income assets — not primarily because they expected bonds to generate tremendous long-term growth, but because those dollars were there to provide income, stability and less uncertainty as they approached retirement.

So the question wasn’t whether we should take money away from their long-term growth assets.

We didn’t touch the stocks.

Instead, we asked:

Could some of the money already dedicated to fixed income accomplish the same job more efficiently?

That’s where the annuity came into the picture.

We modeled moving $600,000 from the lower-yielding bond portion of the portfolio into an indexed annuity designed to maximize lifetime income.

The result was pretty compelling.

Their projected retirement income increased from:

$17,835/month → $19,851/month

That’s roughly an 11% increase in retirement income.

And once Social Security and the annuity income begin, Jeff and Stacy would have approximately $11,400 per month guaranteed for life.

That’s where the rest of the strategy gets really interesting.

More predictable income can create more freedom for growth

Once a large portion of their lifestyle was supported by predictable lifetime income, the investment portfolio didn’t have to do as much of the heavy lifting.

It didn’t need to provide every retirement paycheck.

It didn’t need as much money dedicated to lower-return assets simply to create stability.

And it didn’t need to be managed around the fear of having to sell stocks during a prolonged market decline.

That allowed the remaining portfolio to be structured more intentionally for long-term growth (including all of their new contributions leading up to retirement).

In our projections, the expected return on the remaining investment portfolio increased by approximately 1.5 percentage points per year.

And by age 90, their projected wealth was approximately 40% higher than under the original strategy.

That’s the part I think often gets missed.

The annuity itself wasn’t creating the extra growth.

The income guarantee changed what the rest of the portfolio could do.

“But eventually you’re just spending down your own principal…”

This is one of the most common criticisms I hear about annuities.

And depending on the type of annuity, the account value absolutely can decline over time and eventually reach zero.

But with a lifetime-income guarantee:

The income doesn’t stop when the account value reaches zero.

That’s the insurance component.

And in the right retirement plan, that can be exactly what makes it valuable.

Imagine Jeff and Stacy reaching age 85 or 90.

The account value inside the annuity may have been substantially reduced — or even exhausted.

But the lifetime income continues.

Meanwhile, the investments they didn’t have to continually liquidate to fund their lifestyle have had decades to stay invested.

So when someone says:

“But eventually the principal might be gone…”

My response is:

That can be exactly the point.

You’re intentionally converting part of your portfolio into a lifetime cash-flow engine so the rest of your money can remain focused on long-term growth.

It comes back to one question

I don’t ask:

“Will this annuity outperform the stock market?”

That’s the wrong comparison.

I’m more interested in asking:

“What job is this money supposed to do?”

If a portion of your retirement portfolio is already sitting in bonds because you want stability, predictability and income, it can make sense to evaluate whether some of those dollars could perform that job more efficiently somewhere else.

That won’t be the right strategy for everyone.

But this case shows why retirement planning is about much more than simply picking investments.

Create predictability. Create income. Then be strategic with everything that’s left.

Jeff and Stacy didn’t need an annuity to retire.

But by restructuring part of their portfolio, they increased retirement income by about 11% while increasing projected wealth at age 90 by roughly 40%.

That’s a pretty powerful example of what can happen when every dollar in a retirement plan has a specific job.

— Matt

P.S. As always, below you'll find all of my newest articles, videos, case studies, and retirement resources.

⭐️ Top Content of the Week

📝 4 Smart Ways to Handle Market Volatility in Retirement Market volatility doesn’t disappear when you retire — but your plan can be built to handle it. Here are four ways to create more stability without giving up on long-term growth.

📝 This 62-Year-Old Couple Has $1.2 Million Saved — Can They Retire in 5 Years? A real-world retirement case study looking at income, Social Security, savings and how a small portion of the portfolio can be used to create more predictable retirement cash flow.

🎥 They’re On Track for Retirement — So Why Put $600K Into an Annuity? This week’s featured case study: Jeff & Stacy were already on track to comfortably fund retirement. See how restructuring part of their fixed-income allocation increased projected retirement spending by about 11% while improving projected wealth at age 90 by roughly 40%.

An Investment Plan Isn’t an Income Plan.

The strategy that helped you get to retirement may not be the same strategy that works best in retirement.

If you’re getting close and want to talk through what that transition should look like, let’s chat.

👉 Let’s Chat Retirement​

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