Retirement Income – 4 Choices
January 20, 2016
Retirement. It is something we are all looking forward to, but it is also something we all need to plan for as early as possible. While enjoying your retirement is key, you will also need income. Once you stop working, those paychecks will stop arriving as well. So how do you pay bills and do the things you love?
There are a few different options for how to get income in your retirement. Below we discuss these in detail.
As of November 2015, the average Social Security benefit was $1,338 per month, or about $16,000 per year. That is clearly not going to be enough to live off off. Remember that is the average, your benefits could be slightly higher or lower, but they still won’t be even close to the paychecks you used to receive. Social Security is meant to be a tax. It is not meant to be your retirement savings and to fully fund your retirement.
Hopefully you have been contributing money to these accounts such as an IRA and 401(k) for many years before you even approach retirement age. These accounts will provide you with income in various ways. Many of them have a Required Minimum Distribution that begins when you are 70 ½ years old. Roth IRA’s are an exception – you can take as much or as little from them at any time without a 10 percent penalty as long as you have had the account for at least 5 years and you are age 59 ½ or older. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.
Other Investment Accounts and Dividends
If you have other investments accounts besides your retirement accounts, these can also be a great source of retirement income. Guarantees are based on the claims paying ability of the issuing company.
Annuities are often overlooked as retirement income. There are many kinds of them and they are worth consideration. Annuities are an option because they can give you a set income stream in retirement.
Don’t leave your retirement income up to chance or rely solely on Social Security. Give the topic some thought and come up with a plan on how you are going to support yourself in retirement. We would love to help you devise your plan to live comfortably in your retirement. Please call us at 763-231-9510 to schedule a time to meet with one of our Wealth Advisors.