What’s Your Income Number?
Most people can tell you exactly what is in their savings account. Far fewer can tell you how much monthly income those savings will actually produce in retirement, which is what makes up their Income Number.

That gap is one of the most common blind spots in retirement planning, and here at Investors Life, we want to ensure you are equipped with the knowledge you need for the retirement you deserve.

The Number That Actually Matters
Account balances are easy to track. They appear on statements, and though some of them may go up and down with the market, they feel concrete and accessible. However, a balance is not the same as income. What you have saved is not the same as what you can spend reliably, every month, for the rest of your life.

Your Income Number is the amount of monthly income your retirement needs to produce to cover your monthly expenses, as well as the things you want to spend more time doing now that you are retired, such as travelling and hobbies.

Your Income Number determines whether you can maintain your lifestyle after your paycheck stops. Yet, it is the number most people have never actually calculated.

Where Retirement Income Comes From..
Retirement income does not come from one place. For most people, it is built from several sources, each contributing a different amount and carrying different characteristics.

• Social Security– provides a guaranteed monthly benefit, though the amount depends on your earnings history and the age at which you begin claiming.
• Savings- including personal savings accounts and other liquid assets. This can supplement income, but is not designed to generate it reliably over decades.
• Investments- such as a 401(k), IRA, or brokerage account can grow over time and be drawn down in retirement. But the income they produce varies with market performance, and withdrawals reduce the principal available for future years.
• Pension (where available)- provides a fixed monthly payment for life; this is a form of guaranteed income that fewer employer plans still offer today.
• Guaranteed income products- this includes products such as annuities, designed specifically to convert a portion of your savings into a predictable income stream that you cannot outlive.

Added together, these sources produce your Income Number. The question is whether that number is enough.

The Problem with Focusing Only on Assets
Savings, investments, and a 401(k) are essential parts of retirement preparation, but there is a difference between having assets and having income.

An asset has a balance. Income has a rate. In retirement, it is the rate that keeps the lights on.

If your savings sit in accounts that do not generate regular income, you are dependent on drawing them down, or selling assets to cover expenses. That approach works while the market cooperates, and your balance holds. It becomes a problem when markets fall, expenses rise unexpectedly, or you live longer than your projections assumed.

The goal of retirement is not to have money sitting somewhere. It is to have money arriving dependably, month after month, for as long as you need it.

Accumulating Is Only Half the Work
For most of your working life, the focus is on accumulation. Save more. Invest consistently. Grow the balance. That discipline matters and is essential to build your finances for the life you want to live.

But at some point, the goal shifts. Accumulation is not the end of the process; it is a part of a larger strategy. Turning those assets into income is a separate task for the next phase of life, retirement. This requires different tools and a different set of decisions.

Retirement planning that stops at accumulation leaves the harder question unanswered: how do you convert what you have built into a reliable income that lasts?

How to Find Your Income Number
Your income number starts with a straightforward question: how much do you need each month to cover your essential expenses, maintain your lifestyle, and account for costs that tend to rise over time?

Once you have that figure, map your current and projected income sources against it. Add up what Social Security will provide, what a pension/401k pays if you have one, and what your savings and investments can realistically generate on an ongoing basis.

The difference between what your sources will produce and what you actually need is your income gap. Closing that gap is the purpose of a retirement income strategy.
Guaranteed income products, like Fixed Annuities, can play a role here. So can the timing of Social Security claims, and decisions about how and when to draw from investment accounts. The right combination depends on your situation, your timeline, and how much certainty you need.

Knowing your income number is one of the most essential pieces of a retirement strategy. If you do not know your number yet, remember: the time to find out is before you need it.

#KNOWYOURNUMBER

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