The 6 Most Common Retirement Income Sources

LateToFIRE said:
I'm surprised annuities are so prevalent - advisors must be working overtime.
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Employer-funded 'defined-contribution/delayed vestment' annuity products used to be a fairly popular 'retirement benefit' not too many years ago. I have one I'll start drawing from next year (not big $$, but it's something).
 
income sources

60 year old
Pulling 100% from taxable accounts

Considering Annuity at 65 which would provide the following:

$600K annuity providing $60K per year

Seems like a solid guaranteed return due to higher interest rates.

Thoughts?
 
LateToFIRE said:
I'm surprised annuities are so prevalent - advisors must be working overtime.
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When they say "annuities" I wonder exactly what they mean. There are many types. Probably the most straightforward type is Single Premium Immediate Annuity which means you plunk down some of your retirement savings for a monthly payment.

A sort of variation on this theme is the old SPDA (single premium deferred annuity) (you plunk down your retirement savings and it grows at some rate - guaranteed and/or varialbe.) and THEN if you chose, you can have it pay out as an annuity by the current rates.

A similar vehicle is the MYGA (Multi Year Guaranteed Annuity.) In essence, this is a CD offered by an insurance company. AFAIK you can annuitize the proceeds at a later date - but most people take money from the vehicle just like a CD (though you can take at specified intervals over time.)

Then you get into the "free dinner" annuities which have more fees than Carter has little liver pills.:LOL: They supposedly "participate" in the markets and you "can't lose" as you have a guaranteed floor and you "win" if the markets go up.

So, I wonder what annuities we're talking about here.
 
Originally Posted by Midpack

  • ~100% Soc Sec (not actually but almost)
  • 87% Personal Retirement Accts (nest egg accumulated assets)
  • 22% Pensions (and continuing to decline)
  • 14% Annuities
  • 13% Part Time Job Income
  • 7% Rental Income
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DW is seven years younger, but had much-higher six-figure income, the way our two corporations were set up. So I took SS at age 62, & upgraded to half of hers when she took SS at age 70. So, income, from high to low:

  • Part-time j@b income = 52%
  • Personal retirement acounts income = 22%
  • Rental income = 14%
  • Social Security income = 12%
DW wasn't planning on w@rking, but former employer didn't listen, & she had to go back & train her replacement. That happened a second time, so she's still going back half-time, two days a week, with a contract that pays her twice what she was earning, full time. All environmental law stuff that employer can't ignore. I still do some computer consulting, most remotely, but DW is the one bringing in the big bucks! Haven't had to tap into our nest egg, except for required distributions, & a few big "fun" things.
 
catii said:
DW is seven years younger, but had much-higher six-figure income, the way our two corporations were set up. So I took SS at age 62, & upgraded to half of hers when she took SS at age 70. So, income, from high to low:

  • Part-time j@b income = 52%
  • Personal retirement acounts income = 22%
  • Rental income = 14%
  • Social Security income = 12%
DW wasn't planning on w@rking, but former employer didn't listen, & she had to go back & train her replacement. That happened a second time, so she's still going back half-time, two days a week, with a contract that pays her twice what she was earning, full time. All environmental law stuff that employer can't ignore. I still do some computer consulting, most remotely, but DW is the one bringing in the big bucks! Haven't had to tap into our nest egg, except for required distributions, & a few big "fun" things.
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Heh, heh, I bet it feels good to "gauge" the old company since now, they need YOU instead of the other way around. W*rking half time for full pay has a very nice ring to it - though I'd rather be FIRE'd.:cool:
 
My number one source for me is annuities I've been collecting monthly for over 12 years.

SS and RMD's are next and are about an equal amount. I only take the required minimum from the RMD.

Next would be withdrawals from high yield savings accounts only in months I need it to cover a large bill like once a year property tax or a higher than normal credit card bill cuz I got carried away and bought a lot of stuff :dance:
 
Heh, heh, I bet it feels good to "gauge" the old company since now, they need YOU instead of the other way around. W*rking half time for full pay has a very nice ring to it - though I'd rather be FIRE'd.:cool:
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She doesn't mind getting out of the house for 8 hours a week, & I get to take a nap! I never thought they paid her enough, anyway, so not gouging, as much as catching up...after 27 years!
 
Pension, SS and a small amount of investments.
 
catii said:
She doesn't mind getting out of the house for 8 hours a week, & I get to take a nap! I never thought they paid her enough, anyway, so not gouging, as much as catching up...after 27 years!
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Anyway: Good for her!:)
 
Midpack said:
Just thought it was interesting, some a little surprising to me.
  • ~100% Soc Sec (not actually but almost) YES
  • 87% Personal Retirement Accts (nest egg accumulated assets) YES
  • 22% Pensions (and continuing to decline) YES (SMALL)
  • 14% Annuities NO
  • 13% Part Time Job Income NO
  • 7% Rental Income NO
https://youtu.be/USiqwbJK9vs
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Cheers!
 
LateToFIRE said:
I'm surprised annuities are so prevalent - advisors must be working overtime. Equally surprised part-time is not higher given all the press about retirement crisis, dismal average savings, blah blah blah.
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I was thinking the same. :)
 
Deferred annuities turned out to be a good deal for my in-laws who bought some modest ones ~30 years ago when FIL retired but didn't start withdrawing until 20+ years later.
 
ncbill said:
Deferred annuities turned out to be a good deal for my in-laws who bought some modest ones ~30 years ago when FIL retired but didn't start withdrawing until 20+ years later.
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Yeah, mine have been paying 5% all these years. Paltry compared to equities (in aggregate) but pretty good during years when CDs were at 2%. AND they're steady. MYGAs now can substitute for CDs if you are careful and don't need the money for a while. Oh, and I converted my SPDAs to Roths. YMMV
 
income streams

4 years in and consider all accounts as part of retirement nest egg

SS YES but not for a few more years
Portfolio Income YES 30% of expenses
Rental Income YES 70% of expenses
Pensions NO
Annuities NO
Part Time Job NO
Inheritance/Trust NO
Sched-C Business Income NO
 
JOBO said:
4 years in and consider all accounts as part of retirement nest egg

SS YES but not for a few more years
Portfolio Income YES 30% of expenses
Rental Income YES 70% of expenses
Pensions NO
Annuities NO
Part Time Job NO
Inheritance/Trust NO
Business Income NO
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Do you have a rental manager who takes care of rent, repairs, emergencies, keeping the rental occupied, expelling bad tenants, etc.?


If you are doing this yourself, then I respectfully submit that you have a part time j*b.
 
My sources in 2023 - spouse's SS, I'll draw mine at 70 and change hers to spousal benefit 7%
Rental partnership passive investment w/K1 31%
Part-time job 11%
Retirement accounts 50%
 
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Koolau said:
Do you have a rental manager who takes care of rent, repairs, emergencies, keeping the rental occupied, expelling bad tenants, etc.?


If you are doing this yourself, then I respectfully submit that you have a part time j*b.
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Yes I use PM and a handyman.
All I do is approve and pay. :dance:
 
Age 58, FIREd 3 years ago, MFJ.
Pension, Taxable brokerage, NG 567(b), part-time w*rk.
 
Koolau said:
Yeah, mine have been paying 5% all these years. Paltry compared to equities (in aggregate) but pretty good during years when CDs were at 2%. AND they're steady. MYGAs now can substitute for CDs if you are careful and don't need the money for a while. Oh, and I converted my SPDAs to Roths. YMMV
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The 5% includes return of principal I assume, so not yielding 5%?
 
capesquan said:
Considering Annuity at 65 which would provide the following:

$600K annuity providing $60K per year

Seems like a solid guaranteed return due to higher interest rates.

Thoughts?
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What for 10 years Certain? Certainly not single or Joint life.

Here are the current rates, which are likely to be the highest and will most likely be lower in 5 years. NYL is not renowned for their high rates, security yes, Rates, Not so much.
 

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If you broaden "personal retirement accounts" to mean the typical taxable accounts which are not part of an IRA or employer-sponsored plan (401k/403b/457b), then I am in that category, and only that one, for the last 15 years. I share Free866's hesitation to do this.

I recently turned 60, so I am eligible to take money out of my tIRA. This is the first of my "reinforcements" which are part of the overall ER plan I set up when I ERed at 45, 15 years ago. My goal was to make it to age ~60 intact, something I easily accomplished. The other reinforcements are SS and a frozen company pension.
 
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