How to Turn Retirement Savings into Retirement Income

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Understanding Retirement Income Sources

Retirement income can come from various sources, each with unique characteristics. Key sources include:

Sources Of Retirement Income

Generating Income from Retirement Savings

  1. Withdrawal Strategy: Create a strategy for withdrawing from retirement accounts. Consider the tax implications and required minimum distributions (RMDs).
  2. Investment Income: Bonds, dividend-paying stocks, and mutual funds can generate income. Focus on investments that match your risk tolerance and income needs.
  3. Annuities: Consider purchasing an annuity for guaranteed income. An immediate annuity starts paying immediately, while a deferred annuity pays out later.
  4. Reverse Mortgage: For homeowners, this option allows you to borrow against your home equity and receive monthly payments.
  5. Social Security Timing: Decide when to start receiving Social Security benefits. Delaying benefits can increase the monthly amount.
Retirement Accounts

Balancing Income and Expenses

  • Budgeting: Estimate your living expenses in retirement and balance them with your expected income.
  • inflation protection: Include investments that offer inflation protection, like Treasury Inflation-Protected Securities (TIPS).
  • Emergency Fund: Maintain a cash reserve for unexpected expenses.

Tax Considerations

Generate Income In Retirement

Income Sources and Characteristics

SourceTypeCharacteristics
Social SecurityGovernment BenefitPredictable, inflation-adjusted
Retirement Accounts (IRA, 401(k))InvestmentTax advantages, RMDs required after age 72
Defined Benefit PlanPensionStable, employer-sponsored
Savings and Investment AccountsAsset-basedVariable income, dependent on market
AnnuitiesInsurance ProductGuaranteed income, various types
Home Equity (Reverse Mortgage)LoanIncome based on home value, repayable

Conclusion

Effective retirement planning involves understanding your income sources, managing your expenses, and developing a tax-efficient withdrawal strategy. By balancing these elements, you can create a steady income stream to support your retirement years. For personalized advice and more detailed planning, consulting with financial advisors can be beneficial. Contact us today for a free quote.

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Questions From Our Readers

I’m currently with Fisher Investments, but I keep losing money. I have $650K saved. I want to convert retirement savings into income. How do I convert, and how much income can I expect from an annuity?

To convert your savings into income, consider a fixed-indexed annuity. This can protect your investment while potentially providing growth. To determine how much income you could get, use our annuity calculator with details like your investment amount and age. The income will depend on the annuity’s terms and your specific circumstances.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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