Creating a paycheck in retirement isn’t just about collecting stock dividends and bond interest. But selling stocks to cover living expenses in a volatile market can be fraught — all the more reason to have an income plan in place.
After decades of saving and investing, the big pivot to relying on your portfolio to generate income is the central financial challenge of retirement. “The big question on everyone’s mind is how do I create that paycheck,” says Robert Gilliland, managing director and senior wealth advisor at Concenture Wealth Management in Houston. “When we ask our clients about the things that concern them about retirement, numbers one and two are health care and an income stream.”
When you turn to living off of your investments, it’s natural to focus on dividends and interest — the actual income your stocks and bonds produce. You may even hope to leave your principal alone, perhaps out of a reluctance to flip from saving to spending. In a survey by the Employee Benefit Research Institute, nearly 6 in 10 retirees reported no plans to spend down a significant portion of their assets, with the potential for an unforeseen expense late in life given as the chief reason for their reluctance.
Fidelity Insights: https://www.fidelity.com/insights/retirement/income-retirement-portfolio
