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How to choose the right retirement income distribution options

Knowing that you have a secure, ongoing income in retirement can allow you to focus on other more important things like spending time with family and friends. There are many potential sources of retirement income distribution options, though, so it is important that you have a strategy in place for coordinating and maximizing them. Otherwise, you could end up receiving less than you are eligible for.

Sources of Income in Retirement

If you are an employee or business owner, it is likely that your primary source of income comes from just one place. But this isn’t typically the case in retirement. For instance, you could receive incoming cash flow from one or more of the following:
  • Social Security
  • Employer-sponsored pension plan
  • Reverse mortgage
  • Rental income
  • Interest and/or dividends from personal savings and investments
  • Annuity

Social Security

There are literally hundreds of different ways to claim your Social Security benefits – and if you are married, your spouse may also be eligible. If you file for these benefits before you reach your full retirement age, the dollar amount will be permanently reduced. However, you will also collect income for a longer period of time. So, it is important to go over your possible strategy with a retirement income expert.

Social Security Full Retirement Age

Year of BirthMinimum Retirement Age for Full Benefits
1937 or Before65
193865 + 2 months
193965 + 4 months
194065 + 6 months
194165 + 8 months
194265 + 10 months
1943 to 195466
195566 + 2 months
195666 + 4 months
195766 + 6 months
195866 + 8 months
195966 + 10 months
1960 or Later67

Source: Social Security Administration

Employer-Sponsored Pension Plan

If you work (or worked) at a company that offered a defined benefit pension plan, you could receive income from that – and it is possible that some or all of this income will continue for your spouse if you pre-decease him or her. Unfortunately, with many businesses doing away with defined benefit plans, the number of retirees who are eligible for this type of income is getting smaller.

Reverse Mortgage

Owning a home can provide you with retirement income, too. In this case, a reverse mortgage allows you to receive either a stream of payments or a lump sum of cash to use for anything you choose. In this case, you have to be at least 62 years old and have a significant portion of equity in your home.

Rental Income

If you own residential and/or commercial real estate, you could be receiving regular rent checks from your tenants. In addition, your renters can essentially help you to pay off your mortgage, in turn building more equity in your investment(s). It is important to note, though, that investment property can be a lot of work. For instance, you (or someone you hire) must fill vacancies, collect rent, respond to maintenance and repair needs, and evict tenants who aren’t following the rules of the lease.

Interest and/or Dividends from Personal Savings and Investments

If you have personal savings and investments, you could receive income in the form of interest and/or dividends. While this type of “passive” income can be nice, fluctuations in the stock market and interest rates could bring down the amount of income you receive.


Many retirees are turning to annuities as a source of income in retirement. Fixed and fixed indexed annuity are designed to pay out on a regular basis, such as monthly or annually, for a set period of time, or even for the remainder of your lifetime. Depending on the type of annuity, you could also receive tax-deferred growth while your money is in the account. Not all annuities are exactly the same, though. So, it is recommended that you discuss your short- and long-term objectives with a retirement income professional before you make a commitment to an annuity or any other type of income-producing financial vehicle.

Does Your Retirement Income Plan Need an Update?

If you don’t yet have a retirement income strategy in place – or if you do have one but it needs to be updated – feel free to contact us and talk with an income specialist. At Annuity Gator, our primary focus is on assisting investors and retirees with coordinating and maximizing their future income. You can reach us by phone at (888) 440-2468 and via email by going to our secure online contact form. We look forward to assisting you with your retirement income planning. How to choose the right retirement income distribution options

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