Turn Your Retirement Savings into Income

Many investors spend most of their lives saving for retirement but are unsure of how to turn the capital into actual income once their career comes to an end. Here are five ways to do it:

1. 4% Withdrawal Rate – a traditional approach that allows an investor to withdraw 4% of their savings and increase that amount annually with inflation
2. 7% Withdrawal Rate – considered a more “optimal” approach that helps an investor find a balance between having higher income and preserving their savings
3. Income Annuity – an approach in which an investor purchases an income annuity that is guaranteed for the rest of their life by an insurance company
4. Investment Income – an approach that avoids withdrawals and relies upon dividends and interest income
5. Spending Safely – an approach in which an investor delays Social Security benefits to age 70, withdraws 3.5% of savings from age 65-70, and uses the IRS required minimum distribution tables to determine withdrawals starting at age 70

 
All of these methods have pros and cons, read this article to learn more. As you prepare for or take your first step into retirement, discuss your options with your advisor to help create a plan that works best for you. 

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