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Retirement Income
Definition
Retirement income is the money received during retirement from various sources including savings, pensions, Social Security, and investments.
Explanation
Common retirement income sources: Social Security, pensions, 401(k)/IRA withdrawals, part-time work, rental income, dividends, and annuities. The goal of retirement planning is to create a sustainable income stream that covers expenses throughout retirement.
A common strategy is the three-legged stool: Social Security, pension/retirement accounts, and personal savings. Each source has different tax treatment and timing considerations.
Example
A retiree's monthly income might include $1,900 from Social Security, $1,500 from a pension, and $1,600 from 401(k) withdrawals, totaling $5,000.