Mark Ahlers

Apr 11 2018

Wealth Management Spotlight: How to Fill the Income Gap


wealth-management-spotlight-income-gap

Today the average Social Security benefit is approximately $1,250 per month, or $15,000 per year. The amount of living expenses not covered by Social Security or other guaranteed sources of income such as a pension or rental income is often referred to as your income gap. I want to share with you how to approach filling your income gap.

Learn more about an Income Gap: https://youtu.be/cFA_R3wK498

The goal is to determine the amount of annual living expenses that are not covered by Social Security, pension, or rental income. This amount is typically going to be covered by IRAs, CDs, savings, or personal investments. By dividing this amount by the size of your investment portfolio, the answer or result, is the target rate of return you need to achieve to maintain your same standard of living in retirement.

For example, if a person’s retirement income needs are $40,000 per year and they receive $20,000 in social security benefits, then their income gap is $20,000. If they have a total investment portfolio of $500,000, consisting of IRAs, CDs, savings, and personal investments, their portfolio will need to return 4% or more per year to match their annual living expenses.

If you have any questions about working with Hills Bank or your Income Gap, please contact one of our Trust and Wealth Management Officers on online at HillsBank.com/Wealth Management or give us a call at 1-800-899-8858.

Some trust products and IRA contributions/balances are not a deposit, not FDIC insured by any federal government agency, not guaranteed by the bank, and may go down in value.
Mark Ahlers

About Mark Ahlers

Mark Ahlers is Vice President, Trust Officer at Hills Bank’s Marion location on 7th Ave. Mark’s area of concentration and expertise includes administering portfolios for non-profit organizations (foundations and endowments) and personal trust, as well as financial and retirement planning for individuals. Mark also administers employer-sponsored retirement plans. Mark is a graduate of Briar Cliff University in Sioux City, Iowa. Prior to joining the bank in 2006, Mark worked in the Trust and Wealth Management Division of a Midwest-based bank. Mark can be reached at mark_ahlers@hillsbank.com.


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