Tips & Advice

For Retirement, Income Matters as Much as Savings

The reality is that once you retire, income is the primary concern. The state of your accumulated retirement savings matters, yes – but retirement is when you start to convert those savings to fund your everyday life.

Could you retire with income equivalent to 80% of your final salary? If you have saved and invested consistently through the years, that objective may be achievable.

Social Security replaces about 40% of income for the average wage earner. (For those at higher income levels, the percentage may be less.) So where will you get the rest of your retirement income?

Discover six sources that could help fund your ideal retirement lifestyle.1


Systematic withdrawals from retirement savings and investment accounts. You may start taking distributions from these accounts at an initial withdrawal rate of 4% (or less). If these accounts are quite large, the income taken could even match or exceed your Social Security benefits.2

Private income contracts. Some retirees opt for these, though the income they receive may not be immediate.

Pensions. The health of some pension funds notwithstanding, here is another prime source of income.

Your home. Selling an expensive residence and buying a cheaper one can free up equity and reduce future expenses, thereby leaving more money for you to live off in the future.

Passive income streams. Examples include business income produced without material participation in the business, rental income, dividends, and royalties.

Work. Part-time work also lessens the pressure to draw down balances in your retirement and investment accounts.

Work longer, and you may indirectly give your retirement income a boost. One recent analysis from the National Bureau of Economic Research concluded that by delaying your retirement even three to six months, you could give yourself the potential to raise your standard of living in retirement as much as you would if you save 1% more of your pay over 30 years.2,3

Talk to a financial professional about that matter before you retire. Start by scheduling a no cost, no obligation consultation with a CFS Financial Advisor at Apple Financial Services*. Together you’ll build a spending and saving plan that’ll make everyone happy.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer, (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. Apple FCU has contracted with CFS to make non-deposit investment products and services available to credit union members. Apple Financial Services LLC is a subsidiary of Apple FCU and is not directly affiliated with CFS.

Citations.
1 - ssa.gov/planners/retire/r&m6.html [1/25/18]
2 - cbsnews.com/news/the-top-retirement-decisions-facing-older-workers/ [1/25/18]
3 - nber.org/papers/w24226.pdf [1/18]