We’ve just launched some new content on vanguard.com designed to provide insights into generating and taking income in retirement, and we’re interested in hearing your thoughts about it.
Our new web content is based on 3 ideas. First, if you’re comfortable with your existing portfolio, the question may be how to generate a reasonable income from your portfolio in a tax-efficient way. The process starts with redirecting income distributions (i.e., dividend and interest income) from taxable accounts into a cash buffer account, such as a money market fund. You would then direct withdrawals from tax-deferred accounts into that same cash buffer. Over time, you also need to think about how quickly you are “spending down” your savings.
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Just saw this—Linda Stern punches holes in some of the more common misconceptions about retirement:
Stern Advice: Busting retirement myths
What she has to say lines up well with my own observations and thoughts. What about you?
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With a new year well underway, at Vanguard our attention is turning to IRAs, 401(k)s, and tax planning. This year, I, like a lot of others, seem to have Roth IRAs on the brain.
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This blog post was written jointly by Steve Utkus and John Ameriks.
Vanguard is not an insurance company, but that doesn’t mean we don’t appreciate the potential value that some see in having a guaranteed income in retirement.
In fact, you may have heard that Vanguard recently introduced Vanguard Annuity Access™, powered by the Income Solutions® platform. This is an online annuity marketplace where you can compare quotes on comparable fixed annuities from a set of leading insurers. The program is designed to facilitate easy, apples-to-apples comparisons among different annuity contracts, with the highest degree of fee transparency possible. This new service may be very helpful to those people seeking the kind of income guarantees an annuity can provide.
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What’s the typical income of a U.S. retiree? $40,000? $50,000? Higher, lower?
It’s $31,157 as of 2008.
That’s the median income of households age 65 and older as reported by Pat Purcell of the Congressional Research Service. The median means that half of older households had a higher income, half lower. Technically, it’s not the income of “retirees,” because it includes the income of older households whether they are fully retired or still working. Still, it’s a good metric of the income of retired Americans.
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