Retirement should be a time to enjoy life, not worry about running out of money. Yet one of the top concerns for retirees is how to generate consistent, reliable income once paychecks stop. Whether you are decades away from retirement or preparing to leave the workforce soon, building a retirement income strategy is essential.
In this article, we’ll cover three proven retirement income strategies that can help you retire with confidence. Along the way, we’ll touch on important concepts like retirement income planning, tax-efficient retirement planning, and what to do with your 401(k) when retiring.
A strong investment portfolio is only part of the picture. You also need a plan for how, and when, you’ll draw income from various sources like:
Without a clear retirement strategy, you risk depleting your savings too quickly, paying more in taxes than necessary, or missing out on potential investment growth.
A key part of retirement income strategies is not relying too heavily on any one source of money. A well-diversified income plan might include:
Diversifying income also gives you more control over how much taxable income you generate in any given year, an important tactic for tax-efficient retirement planning.
Not all retirement accounts are taxed the same. Drawing from them in the wrong order can lead to unexpected tax bills.
A common retirement strategy is to:
This sequence can help keep you in a lower tax bracket, reduce Required Minimum Distributions (RMDs), and stretch your portfolio.
If you’re wondering what to do with your 401(k) when retiring, consider how it fits into your overall income plan, not just the rollover options.
At Legacy Wealth Management, we prefer that the income you need each month will be available to you, no matter what happens in the markets.
One way we do this is by utilizing what we call, "The Three Bucket Strategy” (sometimes also referred to as an "income floor"). In this approach, one bucket is dedicated to providing your monthly income, which is kept safe and unaffected by market fluctuations. The other two buckets hold the funds used in your investment portfolio as well as an emergency fund. This strategy gives peace of mind by shielding your everyday living expenses from market volatility. From there, you can use your investment bucket to generate surplus income and long-term growth.
If you're not sure where to start, the best move is to work with a trusted advisor who specializes in retirement planning and income strategies.
A fiduciary financial advisor is legally required to put your interests first, and can help you:
Searching for the best financial planning strategies is a good first step, but finding the right advisor can take those ideas and turn them into a successful plan.
At Legacy Wealth Management, we help individuals and families navigate retirement with confidence.
If you’re looking for a trusted retirement plan or want expert guidance on retirement income planning, we are here to help.
Schedule a complimentary consultation at www.lwealthmanagement.com or call us at (877) 650-4738 to start building your tax-efficient, sustainable retirement income plan today.
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