Where Will Your Retirement Money Come From?

For many people, retirement income may come from a variety of sources. Here’s a quick review of the six main sources:

Social Security

Social Security is the government-administered retirement income program. Workers become eligible after paying Social Security taxes for 10 years. Benefits are based on each worker’s 35 highest earning years. (If there are fewer than 35 years of earnings, non-earning years may be counted in the calculation.) In mid-2018, the average monthly benefit was $1,413.[1][2]

Personal Savings and Investments

These resources can also provide income during retirement. Depending on your risk tolerance, time horizon and goals, you may want investments that offer steady monthly income over vehicles giving you the potential for double digit returns. A quick chat with a financial professional can help you understand your risk tolerance as you approach retirement.

Individual Retirement Accounts

Traditional IRAs have been around since 1974. Contributions you make to a traditional IRA are commonly deductible. Distributions from a traditional IRA are taxed as ordinary income, and if taken before age 59½, may be subject to a federal income tax penalty. Once you reach age 70½, these accounts require mandatory withdrawals.[3]

Roth IRAs were created in 1997. Contributions you make to a Roth IRA are non-deductible, as they are made using money that has already been taxed. Sometimes, only partial Roth IRA contributions can be made by taxpayers with six-figure incomes; some especially high-earning individuals and couples cannot direct money into Roth IRAs at all. To qualify for the tax-free and penalty-free withdrawal of earnings, Roth IRA distributions must meet a five year holding requirement and occur after age 59½. Contributions may be withdrawn penalty-free at any time. Roth IRAs do not have any required minimum distribution rules.[3]

Defined Contribution Plans

Many workers are eligible to participate in a defined-contribution plan such as a 401(k), 403(b), or 457 plan. Eligible workers can set aside a portion of their pretax income into an account, and the invested assets may accumulate with taxes deferred, year after year. Generally, once you reach age 70½, you must begin taking required minimum distributions from these workplace plans.[4]

Defined Benefit Plans

Defined benefit plans are “traditional” pensions – employer-sponsored plans under which benefits, rather than contributions, are defined. Benefits are normally based on specific factors, such as salary history and duration of employment. Relatively few employers offer these kinds of plans today.[5]

Continued Employment

In a recent survey, 68% o f workers stated that they planned to keep working in retirement. In contrast, only 26% of retirees reported that continued employment was a major or minor source of retirement income. Many retirees choose to continue working as a way to stay active and socially engaged. Choosing to work during retirement however, is a personal decision that should be made after considering your finances and personal goals.[6]

“Always bear in mind that your own resolution to succeed is more important than any one thing.”

– Abraham Lincoln

Recipe of the Week

Salty/Sour Preserved Lemons

Lemon and half of lemon on brown background. Lemon on brown wooden table

Serves 6


  • 5 lemons
  • 1/4 cup salt or more, if desired

Optional Add-ins

  • 1 cinnamon stick
  • 3 cloves
  • 5-6 coriander seeds
  • 3-4 black peppercorns
  • 1 bay leaf


  1. Soak the lemons in lukewarm water for 3 days to soften the peels. Be sure to change the water every day.
  2. With a sharp knife, quarter the lemons from the top to within ½ inch of the bottom. Dust salt on the fruit, then reshape.
  3. Put a Tbsp. of salt at the bottom of a mason jar. Start layering and packing the lemons, adding salt in between each layer. Push the lemons down and sprinkle in the add-in spices between layers if you’re using them. Pushing the lemons down will release their juice; add additional lemon juice, if needed. When the jar is full, leave some air space before sealing the jar.
  4. Put the jar of lemons in a warm place and shake the jar at least once a day to mix the salt, lemon juice, and spices. Leave the lemons to ripen for 30 days.

To use the lemons, rinse them and remove the pulp. The preserved lemons don’t need to be refrigerated and will keep up to a year.

Recipe adapted from Epicurious[7]

Tax Tips

Child and Dependent Care Credit

Working moms and dads can get a break with the Child and Dependent Care Credit. Child care is expensive, and this credit is designed to offset some of that cost. The credit covers children age 12 or younger, a spouse if they are unable to take care of themself, or any other person claimed as a dependent who can’t take care of themself. More details:

  • The total expenses that you may use to calculate the credit may not be more than $3,000 (for one individual) or $6,000 (for two or more individuals).
  • You must have paid for the care, so that you could work or look for work.
  • If you are married, you must file a joint tax return.
  • When filing, you’ll need to provide information on the caregiver, such as name, address, and Taxpayer Identification Number.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov[8]

Golf Tip

Posture Makes Perfect

To get the most out of your irons, maintaining good posture throughout the swing is key. Try using this strategy many pros use for all their shots, including their irons:

  1. Keep your right arm fairly straight on the takeaway.
  2. Make sure to use a shoulder turn and not just lift your arms.
  3. From the top, start down by pushing off your right foot.
  4. With your weight on the left, turn your hips through, making room for your arms to swing into impact.

This may sound like a lot of mechanics to keep in mind, but slow, mindful practice will have your posture in alignment for the perfect swing.

Tip adapted from Golf Die Hard[9]

Healthy Lifestyle

Diet Soda: Risks and Replacements

Recent research from the Journal of the American College of Cardiology indicates that drinking even one diet soda a day can increase your risk of heart disease or heart attack by 35%. That one diet soda a day is probably not worth it. These drinks are also loaded with chemicals that are potentially carcinogenic and wreak havoc on your insulin because they trick your body into reacting in similar ways to sugar, releasing insulin in your gut and signaling your body to hold onto extra fat.

The good news is that there are plenty of alternatives to this seemingly harmless habit. The best choice is water. Drink the best water you have access to. If your city has great water, use it! If not, there are plenty of places to fill up on filtered water. Then, try some variations on infused flavors. Just add fruits, vegetables, and herbs to your liking, and sip away throughout the day! Here are a few ideas:

  • Orange Fennel
  • Pineapple-Mint-Ginger
  • Tomato-Celery-Bell Pepper
  • Strawberry Cucumber

Tip adapted from The Washington Post and Food Network[10]

Green Living

Your Kitchen is So Smart

Smart kitchens are smart because they work in connection with automated home technology (devices, apps, and the Internet) to help you manage energy and integrate your smart products. You can engage smart home assistants, such as Amazon Alexa or Google Assistant, to help out too.

Smart lighting. No light switch needed. Turn on and off, dim, or automate your lights by voice command. Program your lights to turn on at certain times or even dim when the kitchen is not in use. Be sure to use LED lights too – they use up to 75% less energy, provide beautiful lighting, and last longer.

Smart Dishwasher. The water savings are astounding – 1,000 gallons of water annually compared to the older models. Monitor or control your dishwasher with a smart app while you’re away.

Smart Cooking. Save money, time, and energy with a smart oven or cooktop. Preheat, turn on, turn off, or adjust from your smartphone.

Tip adapted from Constellation[11]

[1] www.waddell.com/explore-insights/market-news-and-guidance/planning/9-facts-about-social-security
[2] www.cbpp.org/research/social-security/policy-basics-top-ten-facts-about-social-security
[3] www.cnbc.com/2018/07/30/roth-vs-traditional-iras-how-to-decide-where-to-put-your-money.html
[4] www.fool.com/retirement/2018/11/21/the-most-important-401k-rules-for-maximizing-your.aspx
[5] www.investopedia.com/terms/d/definedbenefitpensionplan.asp
[6] www.investopedia.com/articles/personal-finance/101515/planning-retiring-later-think-again.asp
[7] www.epicurious.com/recipes/food/views/preserved-lemons-231570
[8] www.irs.gov/taxtopics/tc602
[9] golfdiehard.com/6-ways-to-hit-your-irons-solid/
[10] www.washingtonpost.com/national/health-science/diet-drinks-may-seem-like-a-good-idea-but-their-effects-maysurprise- you/2018/06/01/85859710-5d06-11e8-a4a4-c070ef53f315_story.html? noredirect=on&utm_term=.fb45ba47ae9c www.foodnetwork.com/healthy/packages/healthy-every-week/healthy-tips/12-ways-to-make-water-the-most-deliciousthing- ever
[11] blog.constellation.com/2018/11/27/smart-kitchen-gadgets/