Do you know what your income streams will be in retirement?

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Entering retirement can spawn feelings you may not have felt since the last day of fifth grade.

No more classes!
No more books!
No more teacher’s dirty looks!

When you wrap up a career you can say goodbye to so many things you won’t miss: commuting, staff meetings, report writing, commuting, office politics, limited free time, commuting, business suits, uninspiring bosses and commuting.

But there is one aspect of the job that you might initially long for in retirement — that every-two-weeks-like-clockwork paycheck. You won’t be alone in that nervous wistfulness.

In my role as a financial planner, I’ve discussed this anxiety with countless aspiring and new retirees who wonder if their nest egg will be enough to support them without, you know, a paycheck.

How will you replace your paycheck in retirement?

The specific answer to that question is “that depends” — largely on the size of the nest egg and how its owners plan to spend their post-career years. But the fact is, with some planning, you can receive a steady income throughout your retirement. This post-career “paycheck” will consist of money generated by a variety of income sources.

Here are the main wellsprings that feed retirement income streams:

Part-time jobs

I’m a big proponent of post-career work, especially in the first years of retirement. No, you didn’t retire just to go back to the 9-to-5 grind. But taking up a low-stress job that plays into your passions (working at the golf course or flower shop) or allows you to cash-in on a lifetime of professional knowledge (consulting, teaching) can be a rewarding way to supplement your monthly income.

Equally important, remaining in the workforce (on your terms) can help you adjust to your new circumstances. Many freshly-minted retirees struggle with the free-form nature of post-career life.

The structure and the sense of purpose a part-time job provides can help you ease into the retirement mindset. Spending some time on the job also offers vital social interaction and human connections that are proven to help maintain our sharpness and overall mental health as we age.


Social Security

Don’t minimize the importance of this benefit. Even with the potential changes on the horizon, it’s one of the streams you want flowing into your reservoir.

While some people may get as little as $800 a month and others might receive more than $3,000 a month, the fact of the matter is that it’s another money source. And the great part about Social Security is that once it begins, you can rely on the numbers to generally stay about the same with very modest increases tied to inflation.

Rental Income

There are two approaches to creating a rental income stream:

  1. Wait for retirement and then use a portion of your nest egg to invest in income-oriented properties.
  2. Accumulate rental real estate over time. Some different scenarios:

If you buy a house for $100,000 in cash and there’s no mortgage payment, you will be generating approximately $10,000 a year in gross rental income (a 10% gross yield on the cash you’ve invested); or

You put some money down (say, 20%) and borrow the remaining 80% from a bank (please see below regarding risks). As long as you have a reasonable interest rate on the loan, you should still have some positive cash flow from the property.

In both instances, you now have an income-producing property that will pay you monthly cash flow.

This can be a very effective use of a portion of your retirement nest egg. Not only is it very effective at generating cash flow, but it can also give you a part-time job managing the properties if you have a few of them. Some people enjoy being a landlord. It keeps them busy and keeps another stream of income trickling into the reservoir.

Remember: If you are borrowing money, don’t overextend yourself. Make sure you only leverage what you can handle and not a penny more. What I mean by this is that I want you to imagine that all of your real estate loans were called at once. Sure, you could sell properties and pay the mortgages off. But what if you couldn’t?

Think about the financial situation – banks are demanding their money back, calling your loans. If you don’t have the liquid resources to do so, and if your properties are illiquid, you can quickly become insolvent.


This is an increasingly rare benefit, so consider yourself lucky if you have one. It’s yet another steady income — one that is likely guaranteed by the US government.


Income Investing

Finally, we come to my favorite retirement income source — your portfolio.

By employing a strategy called income investing, you can build a portfolio that throws off income from dividend-paying stocks, bonds and other assets, including shares in Real Estate Investment Trusts (REITs) and energy storage and transportation facilities.

During your working years, this income is reinvested to enhance your portfolio’s growth. When you retire, those proceeds can be directed into your bank account to fund your spending. So, your nest egg is generating income that extends the life of your nest egg. How great is that? Here’s more information on income investing.

How many of these streams are already flowing into your retirement reservoir? No matter where you are on your financial journey, there’s still time to tap new money springs and raise your sense of post-career financial security.

This information is provided to you as a resource for informational purposes only and should not be viewed as investment advice or recommendations.  Investing involves risk, including the possible loss of principal. There is no guarantee offered that investment return, yield, or performance will be achieved.  There will be periods of performance fluctuations, including periods of negative returns. Past performance is not indicative of future results when considering any investment vehicle. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax, or investment advisor before making any investment/tax/estate/financial planning considerations or decisions.

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