NDSU Extension Service - Ramsey County

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Retirement Income

Retirement Income

 

Ask any assorted number of people what they hope to do during retirement and you will receive a wide variety of answers but all of them will have a quick answer.   People often have no difficulty in explaining in great detail what their goals for retirement are but reaching those goals is another matter – especially in today’s economy.

          The most common concern with retirement is- “Will I have enough money?”    If your money will last, how inflation might affect your budget and what return you will receive on your investments are all retirement concerns.  Planning for both early and late retirement is also a concern. Financial security at the beginning of retirement does not guarantee financial security for all of retirement –which may stretch 20 years or more.  

          Your retirement income is probably coming from one or more of these sources – social security, a pension, an IRA or Keogh account, an annuity and other savings and investments. You may also be working at a new job. One method for improving your potential financial security is to compare information available for each source of your retirement income and how it will relate to inflation.

          Fixed – Amount paid at time of retirement does not change in the future.  While you are guaranteed that the amount will not decrease, it also does not increase in response to inflation.

          Indexed –Has built in cost of living adjustments tied to inflation, though it may be 1or 2 percent lower than the actual rate of inflation

          Growth – Expected to grow faster than inflation and keep ahead of it

          Uncertain –May vary widely; may keep ahead or fall behind inflation; return may be tied to stock market or world wide markets.

 

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