The 6 Most Common Retirement Income Sources

[Midpack]

Just thought it was interesting, some a little surprising to me.

• ~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

Of course this says nothing about the relative amount of each source, e.g. rental income or PT is undoubtedly substantial for some retirees, retirement accounts could be very small in some cases. The source did his best to be accurate but it may a little off, he was just trying to rank sources best he could, no need to pick nits. Here is the video, though I don’t think it adds much to the list other than qualifying remarks. He is a good common sense channel though IMO.

https://youtu.be/USiqwbJK9vs

 

[Alan]

I have the first 3 on that list + UK SS, my wife has SS (UK and US) and retirement savings only. With the UK you can choose to pay into their equivalent of SS with voluntary contributions up to a max of 35 years.

 

[FREE866]

Just thought it was interesting, some a little surprising to me.

• ~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

Of course this says nothing about the relative amount of each source, e.g. rental income or PT is undoubtedly substantial for some retirees, retirement accounts could be very small in some cases. The source did his best to be accurate but it may a little off, he was just trying to rank sources best he could, no need to pick nits. Here is the video, though I don’t think it adds much to the list other than qualifying remarks. He is a good commons sense channel though IMO.

https://youtu.be/USiqwbJK9vs

I'm in my 7th year and I have none of these sources

 

[Aerides]

I'm in my 7th year and I have none of these sources

No 401k, Roth, IRA, Retirement Account?

 

[FREE866]

No 401k, Roth, IRA, Retirement Account?

Not that I'm taking money out of

 

[Midpack]

I'm in my 7th year and I have none of these sources

So what’s your income source(s)?

 

[FREE866]

So what’s your income source(s)?

I liquidate stock holdings 3x a year. Very tax efficient. Also , in my taxable account I take dividends from my ETFs in cash and withdraw those.

 

[Aerides]

Well, even if I'm not "taking it out" it's still income. I take money out of my cash accounts, but I'm earning income in my IRA, Brokerage, Investments, CD's, etc.

No rentals, annuities, pensions, or SS yet.

 

[Midpack]

I liquidate stock holdings 3x a year. Very tax efficient. Also , in my taxable account I take dividends from my ETFs in cash and withdraw those.

That’s personal retirement accounts…

 

[jollystomper]

One category not mentioned in opening post (maybe alluded to in video, which I have not watched) is gifts/inheritances. Likely not for most folks, but some do have that as a (perhaps one time) income source.

 

[FREE866]

That’s personal retirement accounts…

Is it?, yeah guess it is
Most of my “ income” is generated from selling stock in my taxable brokerage account. It’s really cash flow generation. Then a small portion comes from the dividends also coming from that taxable account.

 

[Car-Guy]

I only have income streams from 1 and 2. Never made a dime from any of the others. Now I feel poor.

Surprised that market returns (equities) didn't make the list. Unless it's bundled in personal retirement accounts.

 

[jollystomper]

For grins, and because Quicken makes it easy , I looked at a summary of our income sources for the first 5 years of my retirement, by percentage:

Pension...................57%
Personal Accounts....18% (savings/investment income)
Work........................9% (includes post-retirement Megacorp severance/bonuses)
Gifts/inheritances.......9%
Social security...........4% (just DW's, mine not started)
Other.......................3% (Tax credits, government covid money, class action settlements, etc.)

 

[Midpack]

Here’s my breakdown

• 100% Retirement Accounts

Will start SS next year, then DW in 2026. Won’t have any others.

 

[FREE866]

Here’s my breakdown

• 100% Retirement Accounts

Will start SS next year, then DW in 2026. Won’t have any others.

Midpack I see you've held out till 70---thats so awesome--congrats. I'm 57 today actually and thats been my plan for awhile, but might take it at 67 ( whole nother thread).

 

[LateToFIRE]

One category not mentioned in opening post (maybe alluded to in video, which I have not watched) is gifts/inheritances. Likely not for most folks, but some do have that as a (perhaps one time) income source.

Hmm, Which also makes me think Trust Funds could be a category too, not that I have or will ever have one. But, I used to own an apartment in a MegaCity co-op building where I swear, half the residents (or at least half the ones that bought after me) had trust fund income (not to mention chunky gifts from parents for downpayments). I know because detailed financial disclosures were required to get Board approval to purchase an apt there (and I was on the Board ).

P.S. I loved that apt. Hated being in what amounts to the most invasive form of HOA on the planet. First rule of survival in an HOA - takeover board immediately upon arrival.

 

[Gumby]

....
Surprised that market returns (equities) didn't make the list. Unless it's bundled in personal retirement accounts.

That would be my assumption.

 

[Car-Guy]

When I read "retirement accounts", I think of tax deferred accounts like IRA's and 401k's. But I guess you could say tax paid accounts too.

Depends on how the author wants to slice it up. Sort of like creating a poll here... Hard to get it right for everyone's liking.

 

[LateToFIRE]

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.

 

[ShokWaveRider]

I have the first 2 on that list + UK & Canada SS Equivalents, DW has SS (Canada and US) + a very small (and I mean really small) Local Government pension, and retirement savings only.

 

[Gumby]

When I read "retirement accounts", I think of tax deferred accounts like IRA's and 401k's. But I guess you could say tax paid accounts too.

Depends on how the author wants to slice it up. Sort of like creating a poll here... Hard to get it right for everyone's liking.

The first three items are the traditional "three legged stool" of retirement - social security, pensions and personal savings. No need to complicate things unnecessarily.

 

[FI_RElater]

...and maybe another

Hmm, Which also makes me think Trust Funds could be a category too, not that I have or will ever have one. But, I used to own an apartment in a MegaCity co-op building where I swear, half the residents (or at least half the ones that bought after me) had trust fund income (not to mention chunky gifts from parents for downpayments). I know because detailed financial disclosures were required to get Board approval to purchase an apt there (and I was on the Board ).

P.S. I loved that apt. Hated being in what amounts to the most invasive form of HOA on the planet. First rule of survival in an HOA - takeover board immediately upon arrival.

When reading the OP... I thought of that one as a real niche source (family trusts)
Another source, also very niche, would be residuals and royalties.... from prior books, patents, etc
Also rare would be revenue from extractive work--- producing wells, or from niche rental sources like cell towers or advertising signage

and LateToFire, I would never have bought such a place, but then again I avoided both the NY and Cali Bay Area in early career (had companies in either offering) mostly because what either offered didn't seem like anywhere near enough to survive (and I certainly didn't want to be unemployed, and thus possibly homeless in my mind, in either location at that time)

 

[jollystomper]

Hmm, Which also makes me think Trust Funds could be a category too, not that I have or will ever have one.

From the high level category summary, I would see trust funds within a "gifts/inheritance" category (heck, call it "gifts/inheritances/trusts" category ). It is money you did not work for, nor was produced from the money you worked for, but was given to you from the kindness of someone else's heart .

I do not know if it is a "niche" category, maybe it is with those of the baby boomer generation. But it seems, at least on this forum, a lot of folks in the boomer generation have set up trusts for their children.

 

[pacergal]

We have:
pensions
ss
retirement iras
inherited ira

 

[aja8888]

I'm good for #1 and #2.