Income in Retirement

Sources of Income in Retirement

You know the sources of your income today, but do you know what income sources you will need to allow you to live comfortably in retirement? The answer is probably a combination of Social Security and deferred compensation. You may also be among the shrinking number of people who will receive a company pension. Many retirees also depend on part-time work as a major source of retirement income.

Here are some retirement income sources to consider:

Deferred compensation

For retirement savings, consider contributing to a 401(k), 403(b), 457 or similar plan. These plans come with tax benefits, such as pre-tax contributions and the opportunity for tax-deferred growth. Plus, investing is easy because the money comes right out of your paycheck and is automatically deducted before you have a chance to think about spending it.

Keep in mind that when you take withdrawals, the money is taxed as ordinary income and may be subject to a 10% penalty if you take it before age 59½.


Knowing what pension benefits you may receive at retirement will help you work through your plans for the future. Your pension benefit is typically calculated based on your years of service, the age you retire and your ending salary.

If you're eligible to receive a pension benefit in retirement, call your benefits office and ask for your accrued and projected pension benefits.

Social Security

If you were born after 1960, you're not eligible for Social Security until age 67. Keep in mind, if you’ll be covered by a government pension in retirement, it may be reduced by your Social Security benefit.

Learn about choosing when to start Social Security.

Next steps

Talk to your financial advisor to develop a clear picture of your current financial situation and determine the steps to reach your financial goals.

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