How Complex is Retirement Income Planning?
By Nicole Norris
Planning for income in your retirement years isn’t just about saving—it’s about creating viable income streams that will last. There are many types of retirement income, and each plays a different role in your financial situation. I’ll walk through some of the most common types of income and discuss ways to help you better position these sources with a goal of ensuring a confident and tax-efficient retirement.
Types of Retirement Income
1. Social Security
This government benefit is the foundation of many retirement plans. When you claim—at age 62, full retirement age, or later—impacts how much you receive. Unfortunately, there is not a one-size-fits-all approach here. Seeking help in choosing the optimal time to start and how to coordinate the spousal benefit to maximize your lifetime household benefit can make a big difference in the long run.
2. Pensions
If you’re fortunate enough to have a pension, this offers anticipated income for life. Often, you’ll need to choose between lump sum payouts or lifetime annuities. It’s important to carefully consider your full financial picture when making this decision.
3. 401(K)s and IRAs
These tax-advantaged retirement accounts are a primary savings tool for many people. Not everyone realizes that withdrawals should be carefully managed to avoid penalties and unnecessary taxes. Advisors help with withdrawal strategies to minimize the tax burden and make sure required minimum distributions (RMDs) are met.
4. Annuities
Annuities can provide guaranteed income* but tend to come with high fees and complexity. We strongly recommend consulting a financial professional who can evaluate whether an annuity fits your goals and recommend suitable products.
5. Investment Income
Dividends, interest, and capital gains from taxable investment accounts can supplement other income. These accounts can have unique tax advantages when utilized correctly. Investments should be managed based on your goals and risk tolerance while minimizing tax impact.
6. Rental or Business Income
Ongoing income from real estate or part-time work can be an excellent tool for those who wish to “walk” versus “run” into retirement. Having this type of income stream may allow more tax advantage accounts to continue to grow or give the option to put off social security for a few years.
Why Consider Working with a Financial Advisor?
A financial advisor not only manages money—they educate and help you create a strategy. By working together, we can:
• Coordinate all income sources for tax efficiency
• Avoid early withdrawal penalties and plan for RMDs
• Determine a viable withdrawal rate
• Adjust plans based on market conditions or life changes
Guarantee based on the claims paying ability of the insurer.
We would love to meet with you!
At Asset Strategies, it’s our joy to serve clients as both educators and guides. Schedule a complimentary consultation with Nicole Norris, Financial Advisor with Asset Strategies, by calling (402) 933-4642.
Our Locations:
Lincoln, 5630 S. 84th St, Ste 104
Omaha, 14450 Meadows Blvd, Ste 1
Asset Strategies. Securities and advisory services offered through LPL Financial, a registered investment advisor, Member FINRA and SIPC.