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Do your “must-haves” math
Preretiree Jack determines his “must-haves”
Monthly Household Expenses1
Housing $2,200 Transportation 1,100 Food 900 Health care 660 Other 2,140
$7,000
Social Security
With his full-time work and his wife’s part-time work, their combined Social Security income is $3,000.2
Pension Income
Jack’s wife doesn’t have a pension. Jack is among the small percentage of Americans that have one, but it is only $24,000 a year ($2,000 a month).
Jack’s monthly “must-haves” expenses Minus Social Security payment(s) Minus pension payment(s)
Monthly “must-haves” income gap
+ $7,000 - $3,000 - $2,000 = $2,000
Multiply your monthly expenses and income by 12 to determine your annual amounts and annual income gap.
Do you have an annual “must-haves” income gap?
$-$=$
A Total estimated annual expenses B Total estimated annual income C Yearly income gap (what you’ll need yearly) (yearly income sources)
How much should you consider investing in a variable annuity with a living bene t if you want to take income now? (If you have more years until retirement and choose a living bene t for guaranteed growth, you can invest less.)
÷ [Withdrawal rate] = $ X [Simple interest bonus] + 1) = $
$ ÷ (
D
“must-have” expenses.
1 Hypothetical investor expenses determined according to U.S. Bureau of Labor Statistics, Consumer Expenditure Survey with the following household expenses as a percentage of budget: Housing 32%, Transportation 16%, Food 12%, Health Care 10%, Other 30%, U.S. Bureau of Labor Statistics, Consumer Expenditure Surveys, September 2019. Data extracted from Table 14 for generation with birth year 1946 to 1964.
2 The 2020 average monthly Social Security bene t is $1,503: https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf.
C
Yearly income gap
If income is needed NOW
If income is needed LATER Determining now what you’ll need to ll your income gap in retirement will help you cover your
Number of years until rst withdrawal
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