1. Think beyond a lump sum goal

When most of us save for retirement, we imagine the final dollar amount we want to reach. But it’s important to consider how much of that amount you’ll need each month or year. This will help shift your thinking from focusing on a specific amount to developing an income stream.

2. Include all your income sources

The more accurate your estimated retirement income is, the stronger your income strategy will be. When calculating how much income you’ll have in retirement, remember to include pensions, Social Security payments and any other savings or investments. To see how much you’ll receive from Social Security, visit ssa.gov.

3. Understand how taxes can have an impact

One of the benefits of most traditional retirement plans is that your contributions are added to your account pre-tax. This can be helpful during your working years (when your taxable income is likely higher than it will be in retirement), but it’s important to remember that you’ll pay taxes on your contributions and earnings when you start taking withdrawals. If you’re contributing to a Roth account, however, your withdrawals will be tax-free because you already paid taxes on those contributions.

4. Pick a withdrawal approach

When it comes to withdrawing money from a retirement account, you can choose from a few different approaches:

• Fixed dollar amount - You withdraw the same amount each month, quarter or year. 
• Fixed percentage - You withdraw the same percentage of your portfolio each year, so your income will vary based on how much you have in your account.
• Investment earnings only - You withdraw only what your account has earned in the last month, quarter or year. This leaves your principal untouched and your income will vary based on market performance.

5. Understand your withdrawal options

Most retirement plans won’t let you take withdrawals before age 59 ½ without paying a penalty, but require you start taking income by age 72. Your financial professional can help you determine the ideal time to start taking income, so you can make the most of your money and meet your needs in retirement.

6. Determine the best time to start withdrawing income

If you’re an Equitable client, you can use our retirement calculator to determine your exact retirement income based on your current contributions. You can also explore how some changes, like increasing your contributions, can make an impact. If you’re not a client, you can still use our retirement calculator and fill out what you know. With an estimate of how much income you’ll have, you can finetune your retirement income strategy and feel more confident about your future.

If you need any help creating or updating your retirement income strategy, please contact your financial professional.