Question 3: What are my sources of income in retirement?
Generating income in retirement without having a consistent salary is daunting at first and looks different for all retirees. Managing retirement income starts with knowing what your sources of income will be, and the rules that govern each various source.
Here are some of the most common sources of income:
Social Security:
Social Security is a government program that provides benefits to retired workers and families. The amount of your Social Security benefits will depend on your earnings history. There is a lot of complexity and strategy around when to claim Social Security. Be sure to discuss with an advisor to ensure you are optimizing your benefits.
Retirement savings:
If you have saved for retirement, you may have a number of different accounts, such as 401(k)s, IRAs, and taxable accounts. The amount of money you have in these accounts will depend on how much you saved and how well your investments have performed. In retirement, it is important to know what type of accounts to pull your income from to reduce your tax bill each year.
Pension:
If you worked for a company that offered a pension plan, you may receive a pension in retirement. The amount of your pension will depend on your years of service and your salary.
Work:
As life expectancies increase, more people tend to have some sort of employment income in retirement. This can help supplement your other income as well as keep you active.
Other sources:
There are a number of other sources of income that you may have in retirement, such as rental income, investment income, or inheritances.
Each retiree's pieces of retirement income fit together to create a different puzzle. If you want to look at income strategies, create a consistent retirement income stream with investments, and optimize your tax bill each year, we would love to connect with you. Click the "Contact Us Today" button below or email us at info@straightpathwealth.com.