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Retirement Income
Retiring can bring changes to both your lifestyle and financial situation. To ensure a secure retirement, it is essential to have a plan that addresses potential risks that could impact your financial stability.
For employers, defined contribution retirement plans offer several benefits, including protection from financial volatility, traditional pension risk, market volatility, and long-term financial uncertainty. However, these plans also come with new risks and responsibilities for the employer. Employees, on the other hand, can enjoy greater control, flexibility, and potentially access to institutional-grade investments with defined contribution plans.
To secure your financial future during retirement, it is important to consider the risks that may impact your retirement security and plan accordingly.
Put Your Money to Work
As you near retirement, it is important to plan for how you will generate an income to support yourself during this phase of your life. This often involves relying on the retirement income sources that you have been building up over your working years, such as savings in a 401(k) or IRA, pension income, or Social Security benefits.
It is crucial to have a clear understanding of your retirement income sources and how they will be able to sustain you during retirement, so that you can make informed decisions about your retirement planning and budgeting.
Determine your retirement income sources
Start by determining your potential sources of retirement income, and how much income they are likely to provide in retirement. Our investment portfolio can help you get started, and common income sources include:
1. Guaranteed Income (i.e. Social Security, Annuities)
2. Pension plans (i.e., defined benefit plans)
3. IRAs
4. Retirement savings, including 401(k), 403(b), and 457 plans
5. Other non-retirement savings, including brokerage accounts, savings accounts and certificates of deposit (CDs)
Diversify your retirement income sources
Because each retirement income category represents a different type of income, and mitigates different retirement risks, diversifying your retirement income across all three can help you generate income in retirement that may last a lifetime.
- Dividend: Equity income investments. Designed to provide long-term growth and income, equity income investments can help offset the effects of inflation. As you approach retirement, keeping a portion of your investable assets invested in high-quality, dividend-producing stocks and equity mutual funds can help hedge your retirement portfolio from inflation risk. These investments also give your portfolio the opportunity to benefit from strong market performance — which is increasingly important for retirees, as many people are spending 20 or more years in retirement. However, equity investments are, of course, subject to market volatility.
- Interest: Bond and fixed income investments. Interest-bearing investments offer the potential for a stable, low-risk income stream, while also preserving your principal investment. As you near retirement, increasing your interest-bearing investments may help your portfolio weather market fluctuations; however, these investments are subject to credit and other risks.
- Lifetime: Social Security and pensions. Social Security benefits are the primary source of lifetime income for many of today’s retirees. Although you can start receiving Social Security benefits as early as age 62, or defer your benefits until age 70, the monthly payment amount you receive varies based on your retirement age. The Social Security Administration’s Social Security tool can help you decide when to start receiving Social Security benefits.
Get started today
- Learn more about investing options available to you.
- Request a free retirement consultation to see if your retirement planning is on track.
- Consider partnering with a Financial Advisor to create an investment strategy for your retirement portfolio.
Nioglow can help you invest your savings to create predictable retirement income
To get started, you can contact Nioglow to request a retirement consultation or learn more about different withdrawal strategies for your retirement savings. This will help you make informed decisions about your retirement income plan and ensure that you are well-prepared for the financial challenges of retirement.
No lifetime income sources?
If you don’t expect to receive Social Security benefits and pension plan payments, or if these amounts won’t cover your essential living expenses, consider converting a portion of your investments into an annuity.
Guarantees are based on the claims-paying ability of the issuing insurance company. Guarantees apply to minimum income from an annuity; therefore, they do guarantee an investment return or the safety of the underlying funds.