Top tips to develop a retirement income strategy

Top tips to develop a retirement income strategy

If you are about to retire and you still need to have an income, this is a must-read. Here you will find the best tips & tricks. Keep reading to discover all bout it!

If you are about to retire and you still need to have an income, this is a must-read. Here you will find the best tips & tricks. Keep reading to discover all bout it!

If you retire at 65, retirement could easily last three decades. These guidelines can help you develop an income stream that can potentially last your lifetime.

Start by reviewing your income sources. Are you eligible for a pension or other guaranteed benefits? If not, consider allocating some assets to purchase annuities that can provide the opportunity for monthly guaranteed income for life. Rule of thumb: match your lifetime income to essential expenses.

Start by reviewing your income sources. 

Also, create a drawdown strategy.  A drawdown strategy based on your life expectancy is designed to help you avoid outliving your savings. It can help determine the kind of life you lead in retirement, and you'll probably need to revisit it regularly.

If you can live on interest and dividends, your principal can remain intact; for most retirees, though, a combination of interest and principal is the most common drawdown strategy.

When you're creating a drawdown strategy, consider your asset allocation. A common mistake during retirement is investing too conservatively; since Americans are living longer, it may make sense to consider maintaining some exposure to stocks so that your assets may continue to grow.

When you're creating a drawdown strategy, consider your asset allocation.

What is more, you should consider annuities for a predictable income. Annuities are long-term investments designed specifically for retirement purposes. Depending on the type of annuity you choose, you can receive a predictable stream of retirement income based on the claims-paying ability of the issuing insurance company.

Finally, determine your Required Minimum Distribution (RMD). RMDs are amounts that the federal government requires you to withdraw annually from your retirement plans after age 72Footnote *. Traditional IRAs require a certain amount be withdrawn each year past age 72Footnote *, regardless of whether you are retired or not. Don't draw more than is required unless you have to: Keep your tax-deferred funds working for you as long as possible.

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