How to Create a Retirement Paycheck That Lasts

Turn Your Savings Into a Steady Retirement Paycheck

You’ve spent your entire career earning a paycheck. But in retirement, there’s no employer sending you a direct deposit every two weeks.

So… how do you pay yourself?

That’s the heart of retirement readiness: creating a personal, sustainable, and secure income stream that lasts as long as you do.

In this article, we’ll show you how to turn your savings into a retirement paycheck—with less stress and more confidence.

Step 1: Know Your Income Needs

Start with the basics:
How much money will you need each month?

Break it into two categories:

• Essential expenses – housing, healthcare, food, utilities, insurance
• Discretionary expenses – travel, hobbies, dining out, entertainment

Total these together to estimate your monthly retirement budget.

Then identify how much of that will be covered by guaranteed sources, like:

• Social Security
• Pension income
• Annuity payments

The rest? That’s what your personal retirement paycheck needs to cover.

Step 2: Build a Reliable Income Foundation

The more guaranteed income you have, the easier it is to plan. That’s why many retirees use tools like annuities to fill income gaps and build confidence.

Popular tools to create a retirement paycheck:

• Fixed Indexed Annuities (FIAs): Provide income for life with no market downside
• Multi-Year Guaranteed Annuities (MYGAs): Offer fixed interest over a set period
• Immediate Annuities: Turn a lump sum into an instant income stream
• Deferred Income Annuities (DIAs): Delay payments until later, like age 70 or beyond

These tools help convert savings into predictable, lifelong income—essentially replacing the paycheck you no longer receive from work.

Step 3: Coordinate Withdrawals from Investment Accounts

Once your foundation is in place, the next step is to strategically withdraw from your remaining assets, such as:

• Traditional IRAs or 401(k)s
• Roth IRAs
• Taxable brokerage accounts

Use a withdrawal strategy that:

• Minimizes taxes
• Extends portfolio longevity
• Adjusts for inflation
• Supports both spouses

A financial professional can help you design a “tax-smart paycheck” from your accounts.

Step 4: Use the Bucket Strategy

The bucket strategy is a popular way to organize your income based on time horizon and risk:

1. Short-Term Bucket (0–3 years)

• Cash, money market, MYGAs
• Low risk, high liquidity

2. Mid-Term Bucket (3–10 years)

• FIAs, conservative bond funds
• Moderate risk, principal protection

3. Long-Term Bucket (10+ years)

• Growth-focused investments, equities
• Designed to fight inflation and grow over time

As each bucket depletes, you refill it from the next. This keeps your “paycheck” going—without needing to sell investments in a downturn.

Step 5: Plan for Longevity

Your retirement paycheck should last as long as you do. That means planning for:

• Longer lifespans
• Rising healthcare costs
• Inflation
• A surviving spouse’s needs

Fixed Indexed Annuities can be structured to pay income for life—even if you live into your 90s or beyond.

Tip: Add Flexibility and Protection

Want to add flexibility? Some annuities include:

• Income riders that adjust based on inflation
• Long-term care benefits that increase payouts if care is needed
• Joint payout options to protect both spouses

These features help your retirement paycheck adapt to life’s changes.

Comparing Retirement Income Tools

 

Final Thought: Pay Yourself with Confidence

You worked hard for your savings—now it’s time to make your money work for you.

By creating a structured, reliable retirement paycheck, you can enjoy life without the constant worry of “Will I have enough?”

Tip of the Month: You can still take advantage of favorable annuity rates in 2025 and lock in income now or later.

Ready to Build Your Paycheck Plan?

Visit SafeMoney.com to learn how to structure your own personal pension—and connect with a retirement income specialist near you.

Written by Brent Meyer, founder of SafeMoney.com. With more than 20 years of hands-on experience in annuities and retirement planning, Brent is committed to helping Americans make informed, confident financial decisions.

Disclaimer: This article offers general retirement planning tips and is not personal financial advice. Consult a licensed professional before making any decisions.

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