Thinking about retirement? Wondering where your income will be coming from. Here are the top 7 sources of income for your retirement:
INCOME SOURCE #1
Provides Foundation for Average Person’s Retirement
Social Security provides the foundation for the average person’s retirement income. So long as you’ve paid into the system, you will receive it. It’s a good starting point, but unfortunately it usually isn’t enough to help you maintain the lifestyle you may be accustomed to.
INCOME SOURCE #2
DEFINED BENEFIT PENSIONS
Employer Funds This Plan and Provides Lifetime Income
If you have a pension, congrats. Unfortunately pensions are becoming a thing of the past as the burden of retirement funding is falling on the employee. In a pension, the employer funds the plan and agrees to provide you a specified amount of lifetime income. This is a direct contrast to #3 the defined contribution plan
INCOME SOURCE #3
DEFINED CONTRIBUTION PLANS
These Are Your 401(k)’s and 403(b)’s
These are designed to help you , the employee, save for your retirement. They can be funded by both you and your employer but it is your responsibility to contribute and choose the investments. During retirement it is up to you to figure out how to convert these funds into retirement income
INCOME SOURCE #4
Funded With Money You Contribute or Rollover
IRAs are individual retirement accounts funded with money you contribute or with money you have rolled over from an old employer’s retirement plan. You can begin withdrawing money from the account for retirement without penalty after you turn 59 1/2
INCOME SOURCE #5
Can Provide a Fixed or Variable Amount of Money
Annuities are insurance products that can provide a fixed or variable amount of money during retirement. You do give up some control over your money, however they can help you create guaranteed income for life.
INCOME SOURCE #6
Often Held in Savings or Brokerage Accounts
These are any investments you hold outside your retirement plans. These assets could be held in savings accounts or brokerages accounts. Depending on how have this money invested you can use the dividends, interest and capital gains on these investments to help create retirement income.
INCOME SOURCE #7
You May Still Need or Want to Work in Retirement
Even though you are retired you may still want or need to work. If you are healthy and able to still work, a job can help with your retirement income strategy.