When preparing for retirement, many people focus on maximizing their Social Security benefits — and rightly so, since it currently makes up a significant portion of retirement income for most retirees. But for most, there’s more to an effective retirement income strategy than government checks alone. In fact, the most successful retirees often build multiple income streams designed as a whole to weather market shifts and sustain their lifestyle for the course of their retirement.
The goal is to strike a balance between ensuring a portion of your portfolio is outpacing inflation while ensuring it’s not exposed to too much risk.
Let’s walk through a few of the effective options we regularly discuss with clients as we help them create dependable income in retirement.
Lifetime Income Annuities: Turning Savings Into a Steady Paycheck
Lifetime income annuities offer a simple yet powerful way to convert a lump sum into consistent monthly or annual income for life. For many retirees, this kind of predictability is invaluable — especially when they no longer want to worry about what the market is doing or where their next “paycheck” is coming from.
While the income is guaranteed, it’s important to remember that these annuities generally don’t adjust for inflation. That means the buying power of your payments may decrease over time. Still, for those with longevity in their family or a need for stable, lifelong income, this can be a smart piece of the overall plan.
The downside protection of these products along with the guarantee of a consistent paycheck over the course of your life would make this portion of your portfolio the most risk-averse.
However, too little risk often means not giving enough of your portfolio the opportunity to continue growing, ideally at a rate faster than inflation. This is where our next point of focus comes into play.
Strategically Timed Withdrawals: Retirement Income with Intention
It’s common to assume that if you’ve saved enough, you can simply draw down your accounts however and whenever you want to care for your retirement income needs. But without a thoughtful withdrawal strategy, you could expose yourself to unnecessary taxes or risk depleting your assets too soon.
That’s why we often recommend using a portion of your portfolio apart from lifetime income annuities to create a strategically timed withdrawal strategy. This is a structured approach to accessing your savings in a way that meets your lifestyle needs while allowing your remaining assets to continue growing.
This isn’t just about pulling a fixed amount each month like — it’s about aligning withdrawals with your actual spending needs and market conditions to protect your portfolio long term.
Done well, this strategy uses a blend of retirement accounts, including IRAs, 401(k)s, brokerage accounts, and even real estate or bank assets, to create a sustainable and tax-efficient income flow.
This portion of your portfolio would be the one that is most liquid, most adjustable according to your needs and goals. It would also generally be the portion that we would potentially expose to a greater amount of appropriate risk while allowing the annuities to balance their portion of your portfolio with appropriate risk-aversion.
If you’d like to get your own lifetime income plan tailored to your financial needs and personal goals, click the button below to book a virtual appointment!
What about using a portion of your portfolio to meet in the middle? That is, using a portion of your portfolio to enjoy the downside protection annuities offer but without those funds being committed to a long-term product.
That’s where MYGAs often come into play.
MYGAs: Locking in Guaranteed Medium-Term Growth
Multi-Year Guaranteed Annuities (MYGAs) used to create fixed, predictable returns over time without being exposed to the market. These products are often used for medium-term goals (3–7 years). Over the last several months from the time of publishing this article*, guaranteed MYGA rates have been well over 5% per year for 3-7 year contracts.
This can allow you to predictably grow your savings at an inflation-outpacing rate while not being exposed to market risk in times of heightened volatility.
What about after the ≈3-7 year maturity period? From there we would assess your overall portfolio health in view of market conditions, your present income needs, and risk exposure of the rest of your portfolio. Using these factors we could recommend to place the funds in another MYGA (perhaps a shorter-term maturity this time) or reinvest these funds with the liquid portion of your portfolio being used for your strategically timed withdrawals.
Bringing Retirement Income Streams Together Into a Plan
Each of these strategies — whether it’s annuities, systematic withdrawals, or using MYGAs in times of volatile market conditions — are only parts of a whole. The right mix depends entirely on your unique circumstances.
That’s where thoughtful retirement planning comes in.
If you’re looking to design a retirement income plan that reflects your goals, values, and lifestyle, we’re here to help. Click the button below to schedule a complimentary consultation with one of our retirement plan specialists. Let’s take the guesswork out of your future and build a strategy that’s as personal as your goals.
