Mark Ahlers

Mar 16 2016

Financial Planning: How Much Can I Spend?—Part 2 of 3

Financial Planning for Retirement.
This is the second in a 3-part series on financial planning and social security.

Once the “income gap” has been determined, the next step is to determine if your accumulated or projected assets are adequate to fill this gap. The goal is to determine the amount of annual living expenses that must be covered by your investable assets such as individual retirement accounts (IRAs), savings, and personal investments.

When this goal amount is divided by the size of your investable asset portfolio, the result is the rate of return you need to achieve. 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.

    $40,000 income needs for year
– $20,000 social security benefits 
= $20,000 income gap

Assume they have a total investment portfolio of $500,000 that consists of an IRA, certificates of deposit (CDs), savings, as well as some personal investments. Their portfolio will need to return 4% per year to match their annual need.

$20,000 income gap/$500,000 investment portfolio = 4% annual target rate of return

How Long Retirement Assets Will Last

The possibility of outliving your assets may be a very real concern. How long your retirement assets will last depends on a number of factors, including the amount you spend, your life span, and the return on your investments.

How long will retirement assets last?

We welcome the opportunity to meet with you for a complimentary review of your goals to make sure you are on the best road for your retirement journey. We invite you to schedule a meeting with one of our experienced financial planning experts by calling 1-800-899-8858 or visiting us online at

Please visit our blog,, next Wednesday for part 3 of our 3 part series, “Financial Planning: How Much Will I Need to Save?” You’ll learn how long your retirement assets will last.

View the complete 3-Part Financial Planning for Retirement Series:

Investment products are not a deposit, not FDIC insured, not insured by any federal government agency, carry no bank guarantee, 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

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