Turning Savings Into Retirement Income
For decades, a paycheck arrives on a regular schedule. In retirement, you become responsible for creating that paycheck yourself.
A helpful first step is to separate your expenses into two groups: essential expenses, such as housing, food, insurance, and utilities, and flexible expenses, such as travel, gifts, and hobbies.
Many retirees aim to cover essential expenses with reliable income sources such as Social Security, a pension, or an annuity that provides guaranteed lifetime income. Flexible expenses can then come from savings and investments, which can be adjusted as circumstances and markets change.
An income annuity can convert a portion of your savings into a stream of payments that may last for as long as you live or for a specified period, depending on the contract. The guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.
There is no single right mix for every retiree. The goal is to build an income plan that addresses essential expenses, accounts for changing needs, and provides flexibility for the years ahead. Understanding how each income source works can help you make informed decisions about your retirement.
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Spencer Legacy Insurance is an independent, faith-based insurance agency at 828 Lake Avenue Suite C in Gothenburg, in central Nebraska. Independent since 2004, we help families, farms, and businesses with life insurance, health insurance, Medi-Share, Medicare, annuities, long-term care, and the Infinite Banking Concept.