Retirement planning is something many of us have on our minds. Our goal is to create a steady income stream that supports our desired lifestyle for the rest of our lives. But how do we get there? There are several ways to achieve this, and each method has its pros and cons. Today, I'm sharing three strategies you can use to create $10,000 per month in retirement income.


💰 Purchasing an Annuity
An annuity is a contract you enter into with an insurance company. You give them a lump sum, and in exchange, they provide you with a steady income stream for the rest of your life or a predetermined period of time.

On the one hand, you have guaranteed income. As long as the insurance company is solvent, you can count on receiving your monthly payments. You don't have to worry about market fluctuations or managing your portfolio. On the other hand, you don’t get to adjust for inflation which can erode your purchasing power. There’s also a lack of flexibility, which may not align with your changing needs.

The cost to purchase an annuity that generates $10,000 per month in retirement varies depending on whether you're single or married. For a single person, it can cost around $1.35 million, and for a married couple, around $1.2 million.

📈 Maximizing Social Security
Social Security can be a powerful source of retirement income, especially if you maximize your benefits. You can receive a significant monthly benefit by working until age 70 and maximizing your earnings record for 35 years. This offers tax advantages, as Social Security benefits often face less taxation at the state and federal levels. Social Security benefits also increase with a cost-of-living adjustment (COLA), helping maintain your purchasing power.

However, it means working longer and being dependent on dual benefits. For a married couple to reach nearly $10,000 per month, both spouses need to maximize their benefits.

⚖️ Investing in a Diversified Portfolio
A diversified investment portfolio can provide you with the income you need, especially when you use the right withdrawal strategy. This approach involves investing your savings and withdrawing a percentage each year to support your lifestyle. This strategy does offer inflation protection: your withdrawals can increase over time to account for inflation. A diversified portfolio also offers more spending flexibility than annuities.

Yet, you’re still at risk of market volatility, and there's no guarantee that your portfolio will grow steadily.

To generate the desired income, a single person might need around $1.96 million in a portfolio, and a married couple, around $1.5 million.

🏠 Honorable Mention: Real Estate
Real estate can also be an effective way to generate retirement income. However, the specifics can vary greatly depending on the type of real estate, location, and other factors.


Each of these strategies offers unique benefits and challenges. The best approach depends on your individual circumstances and goals. You might even choose to combine methods to create a well-rounded retirement income strategy. Whatever you choose, planning ahead and understanding your options can help ensure a comfortable and financially secure retirement.

=======================
Learn the tips & strategies to get the most out of life with your money.

Get started today → https://www.rootfinancialpartners.com/

Get access to the retirement software I use in this video and more → https://retirement-planning-academy.m...

🔔 Make sure to subscribe here to be notified for future videos!
   / @rootfp  

_ _

👥 Make sure to connect with us on all socials below → https://beacons.ai/rootfinancialpartners

⏱Timestamps:⏱
0:00 - Purchase an annuity
3:52 - Annuity pros and cons
5:03 - Maximize Social Security
8:22 - Honorable mention: real estate
9:50 - Invest in a diversified portfolio
12:44 - Portfolio pros
15:10 - Portfolio cons

Other videos we think you'll like:

About Root:    • Financial advisors with heart.  

Worried about retirement?

Start here:    • Worried About Retirement..Start With ...