During your working years, your employer may have deposited your paycheck into your bank account and automatically handled “back-end” issues, like deducting taxes, health insurance premiums, and 401(k) contributions. After retirement, those details — and how to budget for them — become your responsibility. Here are some ways to manage your monthly income in retirement.

Determine your sources of retirement income

Before you retire, think about where your money will come from when you stop working. Start by assessing your stable sources of income.

Social Security is a stable source of income that lasts the length of your retirement. The amount you receive each month depends on your eligibility, the number of years you paid Social Security taxes, and when you begin collecting benefits.

Some retirees have a pension from a past employer. You can choose to take pension benefits as a lump sum, in payments, or a combination of both. Pension funds can also be rolled into an Individual Retirement Account (IRA), giving you control of where and how the money is invested.

Consider whether annuities offer a benefit

You may have or you may wish to purchase an annuity, which is a type of insurance policy. Annuities are flexible financial tools that may offer lifetime income with regular payments.

Immediate annuities are funded with a single premium and payments can begin as soon as 30 days. With a deferred annuity , assets grow on a tax-deferred basis until you’re ready to withdraw the money.

Annuities are either fixed or variable. With a fixed annuity, your payments have a fixed rate of return guaranteed by the insurance company. If you choose a variable annuity, benefits paid will be dependent on the underlying investments.

Choose your withdrawal methods

After you’ve identified your income streams, decide how and when you’d like to receive your money. Because your needs will likely change, flexibility and variety will help you adjust when the unexpected happens. You can:

  • Receive fixed payments from Social Security, pensions, and many annuities at regular intervals. You can also choose this approach for withdrawing from an investment account.
  • Withdraw a percentage of your invested assets’ total value at scheduled intervals (monthly or quarterly). The amount will vary due to market volatility.
  • Plan to withdraw interest and dividends only, leaving the principal amount untouched. The principal will continue to produce income and will be available to you in later life or to your heirs.
  • Rebalance your assets systematically to maintain your desired asset allocation as you withdraw regular payments.

Revisit your decisions regularly to ensure they’re meeting your needs. Think of it as a living plan. A Financial Advisor can help make sure you are firmly in control of your retirement paycheck.

Empower yourself with financial knowledge

We’re committed to your financial success. Here you’ll find a wide range of helpful information, interactive tools, practical strategies, and more — all designed to help you increase your financial literacy and reach your financial goals.

My Financial Guide