8 Sources to Generate Retirement Income

Managing retirement income starts with knowing what your sources of income will be. Here’s how to put your money to work.

Preparing for retirement is a milestone in one's life that requires careful planning and a thorough understanding of the various income sources you can tap into during your golden years. 

Here at NJM Wealth Preservation Strategies, we are committed to providing you with the knowledge you need to make informed decisions and navigate your journey into retirement with confidence.

To assist you in understanding the different income sources for retirement, we've put together this comprehensive guide. Let’s get started.

Social Security Benefits

Social Security is a key component of retirement income for most Americans. Benefits are calculated based on your 35 highest-earning years, so the more you earn (up to a certain limit), and the longer you delay taking benefits (up to age 70), the higher your monthly payment will be. 

Remember, Social Security payments were only meant to subsidize approximately 40% of your pre-retirement income, so Social Security alone isn’t enough to fund your lifestyle after leaving the workforce.

Pro tip: Starting early reduces your per-check benefit. If you begin withdrawing Social Security right away at 62, you'll receive only 70% of your scheduled benefit per check if your full retirement age (FRA) is 67 or 75% if your FRA is 66. By contrast, delaying benefits can mean more money over your lifetime, but only if you live a fairly long life. If you delay benefits, you could be eligible for 124% of your scheduled benefit per check at 70 if your FRA is 67 or 132% if your FRA is 66.

Employer-Sponsored Retirement Plans

These include defined benefit plans, such as pensions, and defined contribution plans, like 401(k)s. With pensions, your employer guarantees a specific monthly income in retirement. Unfortunately, pensions are becoming less common. Most people now have access to 401(k) or similar plans, where you contribute a portion of your salary, often matched by your employer, to a tax-deferred investment account.

Individual Retirement Accounts (IRAs)

An IRA is a tax-advantaged account that individuals set up independently to save for retirement. There are two main types: Traditional and Roth. In a Traditional IRA, contributions may be tax-deductible, and the earnings grow tax-deferred until you start making withdrawals in retirement. With a Roth IRA, contributions are made with after-tax dollars, but withdrawals in retirement are generally tax-free.

Personal Savings

Depending on your unique retirement needs and goals, most people should generate between 45%-80% of their retirement income, (before taxes) from personal savings. A Fiduciary advisor can analyze your income needs and help you decide your number.

This category includes any savings accounts you've accumulated outside of tax-advantaged retirement accounts. While these accounts don't have the same tax benefits, they provide more flexibility, as there's no penalty for early withdrawals.


Investing for retirement involves placing money in assets like stocks, bonds, or funds to build a nest egg over time. In retirement, income can be derived from selling portions of these investments, earning dividends from stocks, interest from bonds, or buying income-producing products like annuities. It's crucial to diversify your investments and align your strategy with your retirement goals, often with the guidance of a Wealth Preservation advisor.

Real Estate

Real estate can serve as both an income source and an asset. You can earn income through rental properties or by downsizing and freeing up home equity.

Real estate investments can take time to generate returns, and as a retiree, you may have a longer investment horizon, which can work in your favor. The longer you hold onto your real estate investments, the more likely you are to benefit from appreciation in property values, rental income, and other sources of returns.


An annuity is a financial product that you purchase from an insurance company. In exchange for a lump sum or a series of payments, the company promises to pay you a regular income, typically for the rest of your life. (Some annuities can carry high-risk factors, so always consult with your Wealth Preservation Manager before purchasing.)

Part-Time Work or Consulting

Even after retirement, many individuals opt to continue working part-time or consulting within their field. This option not only provides extra income but also keeps you active and engaged.


Although not guaranteed, an inheritance could form part of your retirement income. However, it's essential not to rely on this uncertain source.

Pro Tip: If you want to choose who will inherit YOUR possessions and valuables, you need to do some estate planning. By doing so, you’ll be able to name your children’s guardians in the event of your premature death, reduce taxes on what you leave behind, and minimize the chances of family strife and ugly legal battles.

To get started, speak with your Wealth Preservation Manager.

To Sum Up

Remember, your retirement should be a time of enjoyment and comfort, not financial stress. 

Understanding the variety of retirement income sources is just the first step in helping to secure your financial future. 

It's essential to figure out how much income you'll need in retirement and create a strategy that combines these sources most effectively and taxably.

Retirement Income Planning with NJM

At NJM Wealth Preservation Strategies, we help thousands of pre-retirees like you plan for a financially secure and fulfilling retirement. Our experienced and ethical team of advisors can guide you through the intricacies of retirement income planning, ensuring you feel confident and prepared as you transition into this exciting new chapter of life.

If you want to partner with a firm that can build a portfolio around your best interests and goals, reach out today. You will learn how so many aspiring and official retirees have been placed back in control of their retirement portfolios.

We look forward to serving you soon.