How Do You Replace an Income Stream During Retirement?
As you prepare for retirement, you may be looking forward to some deserved time for relaxation, travel, and hobbies. Determining how to replace an income stream so you can fully enjoy your retirement is an essential step in the process.
How to Finance Your Retirement
You can take several steps to prepare financially for retirement:
- Calculate your expenses: Think about how much you need for your living costs and added expenses, such as travel. This number can help you understand how much you’ll need to have monthly and yearly.
- Consider income sources: Make sure you understand where your retirement money can come from. You can sell assets you no longer need or look to your savings, pensions, and investments. You may also convert part of your savings into a fixed annuity for a steady income.
- Create a retirement funds withdrawal strategy: When you leave some of your money invested, your assets can continue to grow. If your savings are in a tax-protected account, you may be able to protect some of your assets from income tax, too.
- Look at Social Security: You’ve been paying into Social Security with every eligible paycheck, and if you’re a qualified retiree, you may be eligible to receive replacement income.
- Consider any pension you have: You may be getting a set amount each month from a pension. Taking your pension can impact your spouse and your taxes, so consult with an advisor to ensure you use your pension at the right time.
Investing During Retirement
If you can, invest during your retirement and make an income through dividends and interest on your savings. The more you can rely on interests and investments, the more you can keep a portion of your savings for unexpected expenses or beneficiaries. If you can invest all or part of your savings and create an income from your investments without touching the main savings, your money can be there for you year after year.
Working During Retirement
There are many reasons to work during retirement. Some retirees are interested in giving back, pursuing a new interest, or staying busy. Working also provides an additional income, but it can impact your taxes, Medicare, Social Security, pensions, and other benefits. If you are considering working during retirement, speak with an advisor before getting started.
Talk With an Advisor Today
Before you decide on a strategy to generate income in retirement, speak with an advisor at Fort Pitt Capital. We’ve been helping individuals and families make smart financial choices with our wealth management, financial advisory, and portfolio management services since 1995. Our exceptional client service, thoughtful investment strategies, internal expertise, and transparency can help you on your retirement journey.