Is your retirement nest egg large enough to retire on? Here are five sources of retirement income to consider:
Being ready financially for retirement comes down to some simple math. Well, the math is simple, but answering this next question can be tricky.
How much do you need to be able to spend each month in retirement? Or, how much do you want to be able to spend each month?
Once you know how much you need or want, then the math is easy.
Where is the money going to come from? Most retirees receive income from a few different sources:
1) Social Security – Make sure you know how much you will be receiving and when.
2) Pension – Not as common as they used to be, make sure you know if you are eligible and what options you have to receive it.
3) Business, farm, or real estate income – Other assets that are sending you income.
4) Part-time jobs - Many people who retire from their full-time job continue to bring an income either from part-time jobs or hobbies.
5) Withdrawals from nest egg - Whatever you cannot cover from one of these other sources will need to be withdrawn from your nest egg. Keep in mind any tax bills produced from making these withdrawals.
For example –
A couple wants to have $5,000 each month in retirement. Social Security will send them $2,500 per month between the two of them. One of the spouses receives $500 a month from a pension They still need $2,000 per month to cover their needs. This will come from their nest egg.
When you know how much you need from your nest egg, a financial advisor can help identify how big that nest egg needs to be to meet your goals. If you want to see if you are on track for retirement, schedule a meeting today.