How to turn Retirement Savings into Retirement Income
When it comes to your retirement savings, don’t consider your retirement assets as money you can spend in retirement.
Instead, consider the money to be a monthly paycheck generator. Then, spend no more than this paycheck.
3 Strategies to turn your retirement Savings into Retirement Income:
- Spend just your interest and dividends — your investment income. Spending just your investment income virtually guarantees that you won’t outlive your money.This method works if your investment income is enough to cover your living expenses.
- Spend your principal cautiously. This method requires you withdraw income and principal in a way that minimizes the likelihood you’ll outlive the principal. It works best if you need more income than just interest and dividends.
- Buy an immediate annuity. With an immediate annuity, you give a lump sum to an insurer, which promises to pay you a monthly income for life. It’s really a do-it-yourself pension. You could buy an immediate annuity with built-in inflation increases or one that pays income to a spouse or beneficiary if you die first. Both of these variations cost more money, although the extra price can be worth it.
These strategies are a great start when looking at turning your retirement savings into a plan that can generate retirement income.
However, there are many other variables when considering using your retirement savings as income (taxes, how it effects social security, required minimum withdrawals, etc.).
When you plan for retirement, some simple numbers can help you develop an investment strategy.
How much money do you need each month to cover your essential expenses, and to also cover the fun things that you’d like to do in retirement? Tracking this spending for the first few years of retirement is critical, since expenses can run higher than expected. You’ll want to be aware of these fluctuations and make adjustments accordingly.
Start by determining how much you spend each year: that’s gross income, minus taxes and investments and exceptional outlays.
Your current annual spending should be your target for retirement spending.
Fee Only Financial Advisor in Buffalo NY and Tampa Florida
Your Retirement Plan is Unique to You.
Our retirement and wealth accumulation planning process is far from the typical “fill in the blank”, off-the-shelf, planning software used by the majority of retirement financial planners and brokers.
We don’t rubber stamp retirement financial plans. Your plan is unique to you.
Schedule a complimentary meeting with us!
Contact us in Tampa Florida 813-964-7100
in Buffalo NY 716- 565-1300
Email us at email@example.com
Visit our website www.MintcoFinancial.com