Creating your retirement income strategy

It’s smart to plan for multiple sources of retirement income to supplement Social Security. This helps ensure you have a cushion if your retirement expenses change unexpectedly. We’ll work with you to:

  • Review expenses. We can help you review essential and nonessential retirement expenses and pinpoint adjustments to make your retirement income strategy work for you.
  • Identify income. Together we’ll identify potential income sources and the tax implications of distribution timing.
  • Diversify. We’ll help you create a diversified portfolio that includes long-term, growth-oriented investments as well as investments designed for near-term income needs.
  • Consider insurance. Insurance protection strategies can help guard against risks that could potentially derail your retirement plans.
  • Consolidate. Consolidating assets such as workplace saving plans and individual retirement accounts (IRAs) with a single financial institution can potentially make investing more cost effective.
  • Monitor and re-balance. We’ll help you review your retirement plan regularly, adjusting for market conditions and modifying spending as needed.

 

Our U.S. Bancorp Investments advisors provide wealth planning, investments and insurance support. U.S. Bank wealth specialists offer trust and estates and wealth management banking services.

Sources of retirement income

Retirement income may be drawn from a mix of different income streams. Each can play a specialized part in your overall retirement portfolio strategy.

Annuities

Annuities from U.S. Bancorp Investments may offer various ways to create income throughout your retirement and provide lifetime payouts to joint beneficiaries.

Health savings accounts (HSAs)

Contributing to an HSA lets you accumulate tax-sheltered savings that you can use to pay for expenses in retirement.

Life insurance

Cash value provided by life insurance offered from U.S. Bancorp Investments can be a tax-advantaged way to supplement retirement income, and help fund your spouse’s retirement if they survive you.

Social Security

Consider the financial impact of when you start taking distributions. You can start collecting payments as soon as age 62, but you’ll receive significantly less income overall than you would if you start receiving payments at 70.

Personal savings and investments

Building up your personal savings and investments after you've maxed out your IRA, 401(k) and other tax-advantaged retirement accounts can provide added flexibility for income during retirement.

Employer-sponsored plans

Contributing to an employer-sponsored plan, such as a 401(k), 403(b) and 457(b), can provide a good source of retirement income. Distributions are taxed as ordinary income and may be subject to penalties if taken prior to age 59-1/2. Similar to traditional IRAs, you'll have to start taking required minimum distributions (RMDs) when you're 72.

Traditional IRAs

Traditional IRAs provide tax-deferred growth, which means any earnings won’t be taxed until you start taking distributions. There are penalties for taking withdrawals before age 59-1/2 and RMDs start at age 72. This is a popular strategy for those who expect to be in a lower tax bracket in retirement.

Roth IRAs

Roth IRAs provide tax-free growth. While you'll pay taxes at current rates on your contributions, your earnings grow tax free and qualified withdrawals aren’t taxed. Although there are penalties for taking withdrawals before age 59-1/2, Roth IRAs don't have RMDs like traditional IRAs or employer-sponsored plans, which allows more flexibility, including the transfer of funds to your beneficiaries.

Rolling over1 a traditional IRA, 401(k) or other employer-sponsored plan into a Roth IRA can be a good option since it lets you keep retirement savings in reserve until you need them.

Plan ahead for tax savings.

While some types of retirement income are tax exempt, many are not. Given the complexities, tax planning is key to get the most from your income. Work with an advisor to build a tax-efficient distribution plan that considers:

  • Diversification by tax status. Diversify your holdings based on their tax status to give yourself a mix of taxable, tax-deferred and tax-free investments.
  • Roth conversion. Converting traditional IRA or workplace retirement plan assets to a Roth IRA may be a good long-term tax strategy.
  • Regular tax payments. Be prepared to pay taxes on your withdrawals at least quarterly.
  • Required minimum distributions (RMDs). Adhere to RMD rules each year after you turn age 72 to avoid severe penalties.
  • Consulting a tax advisor. Get guidance from a qualified tax advisor about the potential tax impact of your withdrawal plans.

Insights from our experts

3 retirement withdrawal strategies

You’ve worked hard to save money for retirement, but do you have a plan in place for spending it?

4 retirement income considerations

Consider these four things when planning your retirement income.

How 7 common sources of retirement income are taxed

Don’t overlook the impact of taxes as you plot out your retirement income strategy.

Disclosures

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  1. A rollover of qualified plan assets into an IRA is not your only option. Before deciding whether to keep an existing plan, or roll assets into an IRA, be sure to consider potential benefits and limitations of all options. These include total fees and expenses, range of investment options available, penalty-free withdrawals, availability of services, protection from creditors, RMD planning, and taxation of employer stock. Discuss rollover options with your tax advisor for tax considerations.

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Investment and insurance products and services including annuities are:
Not a deposit ● Not FDIC insured ● May lose value ● Not bank guaranteed ● Not insured by any federal government agency.

U.S. Wealth Management – U.S. Bank | U.S. Bancorp Investments is the marketing logo for U.S. Bank and its affiliate U.S. Bancorp Investments.

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U.S. Bank, U.S. Bancorp Investments and their representatives do not provide tax or legal advice. Each individual's tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.

This information represents the opinion of U.S. Bank and U.S. Bancorp Investments and is designed to be educational and informative. The views are subject to change at any time based on market or other conditions and are current as of the date indicated on the materials. This is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide recommendations and/or specific advice concerning retirement accounts or investment planning. It is not intended to be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation.

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Diversification and asset allocation do not guarantee returns or protect against losses.

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For U.S. Bank:

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U.S. Bank is not responsible for and does not guarantee the products, services or performance of U.S. Bancorp Investments, Inc.

U.S. Bank does not offer insurance products. Insurance products are available through our affiliate U.S. Bancorp Investments.

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For U.S. Bancorp Investments:

Investment and insurance products and services including annuities are available through U.S. Bancorp Investments, the marketing name for U.S. Bancorp Investments, Inc., member FINRA and SIPC, an investment adviser and a brokerage subsidiary of U.S. Bancorp and affiliate of U.S. Bank.

U.S. Bancorp Investments is registered with the Securities and Exchange Commission as both a broker-dealer and an investment adviser. To understand how brokerage and investment advisory services and fees differ, the Client Relationship Summary and Regulation Best Interest Disclosure are available for you to review.

Insurance products are available through various affiliated non-bank insurance agencies, which are U.S. Bancorp subsidiaries. Products may not be available in all states. CA Insurance License #0E24641.

Pursuant to the Securities Exchange Act of 1934, U.S. Bancorp Investments must provide clients with certain financial information. The U.S. Bancorp Investments Statement of Financial Condition is available for you to review, print and download.

The Financial Industry Regulatory Authority (FINRA) Rule 2267 provides for BrokerCheck to allow investors to learn about the professional background, business practices, and conduct of FINRA member firms or their brokers. To request such information, contact FINRA toll-free at 1-800‐289‐9999 or via https://brokercheck.finra.org. An investor brochure describing BrokerCheck is also available through FINRA.

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