Social Security is a significant portion of most retirees total income. In fact, about a third of retirees get 90% of their income from Social Security. Such an important component of your income deserves some attention. In this article you will learn how your benefit is calculated so that you can get an idea of what you will qualify for when you file.
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Tag: RetirementIncome (page 1 of 2)
One withdrawal strategy that you could use for your retirement income is to withdraw a fixed percentage of your portfolio each year. Because of its simplicity this approach may be appealing to you. It is also very easy to implement.
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What are the risks of relying on dividends for retirement income? Like most things used in moderation there isn’t anything wrong with dividends, or the stocks that pay them. In fact, higher-dividend paying stocks are usually older, established, and strong companies. They can be good components of retirement income plans and help provide some diversification in investment portfolios.
The risk comes in their application, and the popular strategy of loading up on dividend paying stocks exposes retirees to more risk than they usually realize.
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If you withdraw money from your tax-deferred IRA or 401k accounts before you turn 59.5 you will owe a 10% penalty in addition to income tax. A 72(t) distribution is a way of accessing the money in your retirement account before you turn 59.5 without incurring the penalty.
No doubt, you are aware that withdrawing from your retirement accounts early is an excellent way to ruin your retirement. For many, its a guarantee that their money will not last for as long as they need it to.
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One of the key considerations in a retirement income plan is the amount of money that you will withdraw from an investment portfolio. Your decision regarding how much income to take from your retirement account necessitates that you strike a balance between current consumption and future account value.
In simple language, this means that you are deciding how much income to take now, and weighing the risk of withdrawing too much and running out of money, or withdrawing too little and leaving more than you anticipated to heirs. The last part may not seem as bad, and it arguably isn’t, but it depends on which end of the income spectrum you are on and how much you value your own consumption.
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