Your Retirement Income Game Plan: 4 Key Sources You Should Know

“Your Retirement Income Game Plan: 4 Key Sources You Should Know”

Retirement should be a time of peace of mind—not financial stress. One of the most important steps in planning for a successful retirement is understanding where your money will come from once you stop working. The truth is, most retirees don’t rely on just one income stream. Instead, they build a retirement paycheck from several sources.

Here are the four primary sources of retirement income, and what you should know about each one:

1. Social Security Benefits

For most Americans, Social Security is a foundation of retirement income. Your benefit amount depends on your earnings history and the age you start collecting. While you can begin receiving payments as early as 62, you’ll get a reduced amount. Waiting until full retirement age—or even delaying to age 70—can increase your monthly benefit substantially.

Social Security benefits are adjusted for inflation each year and are generally not taxed, unless your total income exceeds certain thresholds. According to the Social Security Administration, around 40% of beneficiaries do end up paying some tax on their benefits.

2. Employer Retirement Plans & IRAs

These include both defined benefit plans (traditional pensions) and defined contribution plans like 401(k)s and 403(b)s. A defined benefit plan pays you a fixed monthly amount based on your salary and years of service. In contrast, defined contribution plans depend on how much you and your employer have contributed, plus investment growth over time.

IRAs—whether traditional or Roth—can also play a big role in retirement. Traditional IRAs allow for tax-deductible contributions and tax-deferred growth, but withdrawals are taxed as ordinary income. Roth IRAs are funded with after-tax dollars but grow tax-free and offer tax-free withdrawals under the right conditions.

3. Personal Savings & Investments

If you’ve built a nest egg outside of retirement accounts, these personal assets can help fill in the income gaps. Common vehicles include:

• Savings accounts and CDs

• Money market mutual funds

• Government bonds

• Stocks, ETFs, and mutual funds

• Real estate

• Annuities

Annuities, in particular, can offer guaranteed lifetime income and can be customized to suit your needs. Just remember: all annuity guarantees depend on the financial strength of the issuing insurer.

Real estate and home equity can also be tapped, but retirees should weigh the long-term risks of borrowing against their home carefully.

4. Post-Retirement Employment

More and more retirees are choosing to work part-time or pursue passion projects after leaving full-time work. Whether it’s consulting, freelancing, or turning a hobby into income, working during retirement can offer flexibility and financial breathing room.

However, be mindful of tax implications: wages are subject to income taxes, Social Security, and Medicare taxes, and additional income might increase the taxable portion of your Social Security.

✅ The Takeaway

A secure retirement isn’t just about having one big source of income—it’s about diversifying your income streams, understanding how they interact, and planning for taxes. The earlier you start and the more informed your strategy, the more confident and comfortable your retirement years can be.

So ask yourself: Are your income sources lined up—and working together—to create a stress-free retirement?

Found out your COMRA Score by clicking here.

‍