Retirement money: Five common sources

In retirement, you’ll live on money saved, received, earned, and invested. Review each item to learn more.

Key sources of income during retirement

Social Security
The amount you receive in Social Security will vary based on how much you earn, but for many retirees today, their benefits equal 20% to 30% of their preretirement income.

This is the money you set aside in personal savings accounts. Build your savings by contributing regularly — try to find the highest rate of interest you can earn. In addition, consider starting a separate emergency fund to cover or offset the expenses of an unforeseen situation. Typically, emergency funds contain between three and six months worth of expenses.

Your portfolio of investments might include stocks, mutual funds, bonds, etc.

A pension is a type of retirement plan in which an employer contributes to a common asset pool of funds set aside for employees’ future benefit. These funds are then invested on the employees’ behalf. The employees receive the funds upon retirement.
Not too many people are lucky enough to have a pension. Even when pension plans were at their peak in 1985, fewer than half of Americans working for private companies were covered. Even less are covered today.

New Income
Many people — if they can — continue to earn money by working part-time, running a small business, or cycling between periods of employment and leisure. In addition to the income, continuing to work helps many people feel connected, useful, and satisfied with life.

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