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M.A. Kluemke and Associates

Your 401(k): A Retirement Income Source

For some of us, retirement is just around the corner - maybe even this year. While we may have spent a lot of time throughout our career fixated on how to develop our nest egg, some may find that they have not given any serious thought as to how to turn this nest egg into a reliable and lasting source of retirement income.

One reason for this could be the lack an extensive knowledge of and support on the matter. In general, people don’t, understand the differences between a 401(k), IRA, or the combination of retirement accounts they may have available to them. Understanding the difference requires research and, for many of us, one-on-one guidance so that we can create a plan that clearly outlines how much income is needed to transition smoothly into retirement.

A simple way to start is by establishing whether or not Social Security and any pension(s) will meet your daily living expenses requirement. When factoring, don’t forget to consider withdrawal rates, discretionary expenses, and to leave room for any unexpected expenses that may occur. If you discover that you fall short, you will need to find more guaranteed income *. One source to consider is an annuity or changing your Social Security strategy.

From here you could discuss with a financial professional the various withdrawal rates and what these could mean when looking at the duration of your retirement. Securing a reasonable withdrawal rate will leave you with more investment liberties, which could in turn support your retirement expenses. You could also segment your investments by when you’re going to use them rather than taking a total return approach. You may choose to take less risk on your short term income producing assets, which allows you to be less concerned with market fluctuations of your assets which you are not planning to use for ten or more years. 

Remember that retirement planning takes time, a close assessment of your goals, and an insightful look at your financial status. If you’re unsure how these options could apply to you and ready to learn how your 401(k) could work as a reliable retirement income source, visit us at or call us at 217.679.1043.  

*Guarantees are based upon the claims-paying ability of the underlying issuer.

By Mark Kluemke

Check the background of this financial professional on FINRA's BrokerCheck
Check the background of this financial professional on FINRA's BrokerCheck