How to manage your retirement income concerns
Retirement ... after years with your nose to the grindstone, it’s something you might love to fantasize about. It means working on your own terms, and it offers time to focus on what matters most — spending time with loved ones, traveling, or pursuing a new interest. You might even lose track of which day it is!
While planning for the great times ahead, retirement can also be a source of stress.
In the US, 10,000 people turn 65 every day.1 Workers are worried that their retirement savings won’t last as long as they need it to, and they worry about having a source of income in retirement — no paychecks combined with inflation is daunting.2
But there are many things you can do to prepare for a long retirement. Developing a realistic financial plan, establishing ways to maintain income, and monitoring your financial health will help to ensure your expenses don’t surpass your income.
Consider trying these simple steps to help you enjoy the retirement you’ve been saving for and retire with financial confidence.
1. Apply the 75% rule
First, figure out how much money you need to support your current lifestyle. A good rule of thumb: it takes about 75% of your pre-retirement earnings to live comfortably in retirement.3 For example, if you average $100,000 in annual salary throughout your career, you’ll need about $75,000 in annual retirement income.
2. Consider delaying Social Security
Your monthly Social Security amounts will be substantially greater if you can postpone receiving benefits. You become eligible to start collecting Social Security at age 62, but if you wait until you’re 70 to receive it, you may qualify for the maximum payment. Your benefit increases each year you delay, up to 8% per year when you postpone beyond your full retirement age.4 These benefits may be taxable depending on your total income and filing status.5
3. Avoid early withdrawals from 401(k)s and traditional IRAs
If you make withdrawals from your retirement savings accounts before age 59 ½ , they may be subject to a 10% early withdrawal penalty. By law, you are required to begin withdrawing money annually from your 401(k) and traditional IRA accounts at age 73.6 Delaying withdrawals can help build your wealth and avoid unwanted penalties.
4. Consider an annuity
You’re saving to build a nest egg for retirement. But once you stop working, how will you turn your savings into a regular income stream? An annuity is a contract between you and an insurance company that can give you guaranteed income in your later years. Unlike withdrawals from your retirement funds, disbursements from annuities can be both guaranteed and can last your lifetime. Annuities can provide a reliable, steady source of income that can be received right away, or later, based on a schedule you decide.
5. Receive regular income through stocks and bonds
Review the stocks and bonds you have in your portfolio for opportunities to receive income. Many stocks pay dividends (usually quarterly). Bonds pay interest and some bonds pay tax-free income. Instead of reinvesting these earnings, you could opt to receive the income as checks, which can provide you with an additional source of income in retirement.
6. Keep annual withdrawals from savings in check
Many financial professionals suggest limiting annual withdrawals to 3-4% of your initial retirement portfolio’s value.7 This can help ensure that your savings remain available throughout your retirement.
7. Review your finances regularly
Of those who have a retirement plan, 89% rate their financial health high compared to 11% who don’t have one.8A financial professional can help you stay on track by reviewing your financial picture, assisting you in deciding when to take account withdrawals, and by adjusting your investments. It’s important to meet with your financial professional at least annually to help protect your income and ensure that your investments fit your needs as they evolve throughout your retirement.
Many Americans have a limited understanding of how much savings they’ll need to retire. Professional financial guidance is especially valuable for workers who didn’t have access to retirement account contributions through their employer or had to manage retirement savings themselves, such as small business owners.9
Approaching retirement may not be as simple or as stress-free as you may have hoped, but know that these are very common anxieties. Attempting one or two of the tips above may help you to feel more in charge of your finances. Speaking with a financial professional about your retirement planning anxieties can also help boost your financial confidence and give you a clearer picture of what your retirement might look like. Reach out to me for help!
Disclaimer:
1, 2, 7,9 Mind, Body, and Wallet® 2024: Addressing well-being during life’s pivotal moments, Guardian’s 13th Annual Workplace Benefits Study, 2024, https://www.guardianlife.com/reports/mind-body-wallet
3How to Determine the Amount of Income You Will Need at Retirement, T. Rowe Price, 2024, https://www.troweprice.com/personal-investing/resources/insights/how-to-determine-amount-of-income-you-will-need-at-retirement.html
4 Retirement Benefits, Social Security Administration. https://www.ssa.gov/pubs/EN-05-10035.pdf
5 Starting Your Retirement Benefits Early, Social Security Administration, Social Security Administration, https://www.ssa.gov/benefits/retirement/planner/agereduction.html#:~:text=You%20can%20start%20receiving%20your,$708
6 Retirement plan and IRA required minimum distributions FAQs, IRS, 2025, https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs
8 What Is the 4% Rule for Withdrawals in Retirement?, Investopedia, 2024, Investopedia, 2022, https://www.investopedia.com/terms/f/four-percent-rule.asp#:~:text=The%204%25%20rule%20was%20created,you%20have%20less%20spending%20flexibility.f
This material is intended for general use. By providing this content Park Avenue Securities LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact a financial representative for guidance and information that is specific to your individual situation.
Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.
Contact the Social Security Administration for complete details regarding eligibility for benefits.
Annuity guarantees are backed exclusively by the strength and claims-paying ability of the issuing insurance company.
All investments contain risk and may lose value. Diversification does not guarantee profit or protect against market loss. Investing in the bond market is subject to certain risks including market, interest rate, issuer, credit and inflation risk. Equities may decline in value due to both real and perceived general market, economic and industry conditions.
Investors should consider the investment objectives, risks, charges, and expenses of mutual funds carefully before investing. This and other information are contained in the fund’s prospectus, which may be obtained from your investment professional. Please read it before you invest or send money. Investments in mutual funds are subject to risk, including possible loss of the principal amount invested.
Securities products and advisory services offered through Park Avenue Securities LLC (PAS), a registered broker-dealer and investment adviser.
PAS is a wholly owned subsidiary of Guardian and a member FINRA, SIPC.
7655345.1 Exp. 2/27 *pre-approved content*
