How Do I Maximize Retirement Income From My Portfolio?

Here are 10 ways you might boost your retirement income: 5: Maximize retirement savings accounts. The You can generate income in retirement by selling off shares of stock from your stock portfolio over time -- but with.
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How to boost your retirement income by 50% - MoneySense

With retirement likely to span 30 years or so, you'll want to find a balance between risk and growth potential. You don't know what the future will hold for you, and the financial past is no guarantee of what will come next. To maintain this rate throughout retirement, though, the investor should stick to a balanced portfolio for the duration of their retirement, and review the portfolio at least annually to monitor and rebalance as needed. How can I make my savings last?

The sequence of good and bad market performance years may also have a major effect on your portfolio's ability to sustain your income. For example, a portfolio that starts out strong in retirement and has losses later will likely be in much better shape than one that has down years early, even if strong performance in later years brings its average return back in line with historical averages. For this reason, it's important take into account the potential effects of fluctuating financial markets when you're deciding how much to withdraw early in retirement, as well as your ability to stay invested during these periods of volatility, and how to divide your retirement portfolio among asset types and diverse investments.

OK, so now you know what to keep in mind as you prepare a retirement income plan. Now let's turn to the elements of a sound plan. When you create your plan, first and foremost, you'll want to make sure your day-to-day expenses—nonnegotiable costs, such as housing, food, utilities, and health care—are covered by lifetime guaranteed income sources. There are essentially 3 sources of guaranteed income.

How to boost your retirement income by 50%

This is a foundational source of income for most people. When you decide to take it may have a big impact on your retirement. It can be tempting to claim your benefit as soon as you're eligible for Social Security—typically at age But that can be a costly move. If you start taking Social Security at 62 , rather than waiting until your full retirement age FRA , you will receive reduced monthly benefits. FRA ranges from 66 to 67, depending on the year in which you were born. Find out your full retirement age , and work with your trusted financial consultant to explore your options.

Although pensions used to be commonplace, they aren't so much anymore. If you're one of those people without one, there are other ways to create a pension-like stream of income. A fixed-income annuity is a contract with an insurance company that, in return for an up-front investment, guarantees 3 to pay you or you and your spouse a set amount of income either for the rest of your life and the life of a surviving spouse in the case of a joint and survivor annuity or a set period of time.

There are different types of income annuities you may consider: Fixed payments continue and don't change regardless of what happens in the financial markets. There are a few things to keep in mind, though. You may give up access to the savings you use to purchase an immediate or deferred income, so you'll need to have other money available for unexpected expenses.

Build Your Own Retirement Income Plan in 5 Easy Steps

If you purchased these annuities, you also forgo any growth potential for this money; however, you can pay extra for annual increases in payments to help offset inflation. In addition, you can select to provide protection for your beneficiaries if that is important to you. A fixed deferred annuity with a GLWB allows access to your investment. When you purchase this type of annuity, your future income amount is guaranteed to increase on each contract anniversary for a set period of time or until your first lifetime withdrawal, whichever comes first.

You will know how much income you or you and your spouse for joint contracts will receive each year at any age you decide to take withdrawals. While each annuity offers an attractive blend of features, determining which annuity or a combination of annuities is appropriate for you is part of building a diversified income plan. Create income that can last a lifetime.


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As you build your income plan, it's important to include some investments with growth potential that may help keep up with inflation through the years. You'll want to consider how you can pay for those fun things you've always dreamed about doing when you finally have the time—discretionary expenses like vacations, hobbies, and other nice-to-haves. It's a smart strategy to pay for these discretionary expenses from your investment portfolio. That's because if the market were to perform poorly, you could always cut back on some of these expenses.

It's important to consider a mix of stocks, bonds, and cash that takes into account your time horizon, financial situation, and tolerance for market shifts. An overly conservative strategy can result in missing out on the long-term growth potential of stocks, while an overly aggressive strategy can mean taking on undue risk during volatile markets. Creating and managing an investment portfolio in retirement requires some effort along with the discipline to stay on plan even during volatile markets. You need to carefully research investment options and choose ones that match your goals.

You also need to monitor your investments and portfolio, and rebalance when needed. And it's important to manage taxes on your investments too. You want to have a plan that can adapt to life's inevitable curveballs.

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Five years into your retirement, you might receive an inheritance, have your parents move in, or experience another significant life event. When these things happen, you need a plan that gives you the ability to make adjustments along the way. That's why it's important to combine income from multiple sources to create a diversified income stream in retirement. Complementary income sources can work together to help reduce the effects of some important key risks, such as inflation, longevity, and market volatility.

For example, taking withdrawals from your investment portfolio doesn't guarantee income for life, but gives you the flexibility to change the amount you withdraw each month. On the other hand, income annuities provide guaranteed income for life, but may not offer as much flexibility or income growth potential. As part of your overall financial plan, you may wish to preserve some principal for use in an emergency or to leave a legacy for heirs. You can accomplish this separately from, or in conjunction with, a diversified income plan.

Mutual Funds and Mutual Fund Investing - Fidelity Investments

You'll need to determine the relative importance of growth potential, guarantees, or flexibility to help you pinpoint the strategy that is right for you in retirement. Of course, there are trade-offs. For instance, more growth potential can mean settling for less guaranteed income. With more guarantees, you get less growth potential and less flexibility. Consider, too, your family's history regarding longevity and whether you plan to leave a legacy to your heirs. So, how do you get started?

Here are 5 steps to consider taking to help create a diversified income plan:.

Key takeaways

This information is intended to be educational and is not tailored to the investment needs of any specific investor. Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.

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Smart retirement income strategies

You're investing in your own future. This one isn't always possible, but if you happen to have a nice lump sum of money come into your possession, consider using it as the base of your retirement fund. Graduations and weddings often result in gifts of cash, so use these as the seed of your retirement account for increased compound interest and a larger return when you retire. Individual Retirement Accounts IRA help retirees-to-be contribute to their futures, putting money away into various investments while also being useful tax management tools.

The two most common IRAs are the Traditional and Roth IRAs, and one of the most significant differences is how they tax contributions and distributions. For example, if person A is in a lower tax bracket in retirement than before, he should probably use a Traditional IRA, which allows some tax deductible contributions and taxes distributions as ordinary income.

Which Is Right For You? Obviously, having an additional or matching contribution to your IRA will increase the value, so be sure that you ask your employer to do so. It's a good idea to do your own research, educate yourself on your options and make informed decisions, but you can also get advanced help from a financial professional whose education and career focus on planning and saving for retirement. Get the most out of a financial consultant by doing your homework first. Come to the meeting with some basic understanding of the options, your own financial goals and specific questions about how best to achieve those goals.

With your consultant's insight and your own intelligence, you'll be able to find the best strategies for maximizing your retirement income. Don't be afraid to look at other options for raising and saving your retirement income. You can invest in real estate, become a venture capitalist , raise interest by lending your own money, or invest in items that have appreciable value in order to grow your retirement income.


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The best thing to do is become active in overseeing how your retirement income grows. Get interested, get involved, educate yourself and start managing your future now.