Creating Retirement Income

Retirement Income

— Oct 1, 2019

Retirement Income

This article answers three key questions, in an uncommon way:

What –

  • – are the possible sources of income for retirees?
  • – is a retirement income plan?
  • – is the best way to fund retirement?

This article is the first in a 7 part Retirement Income series. The topics are:

  1. Creating Retirement Income (this blog)
  2. How Much Do I Need to Retire?
  3. Jobs for Retirees
  4. Things to Do After Retirement
  5. How to Retire Early
  6. Generating Passive Income for Retirement
  7. Ideas to Boost Retirement Income

Before we get into the solution, let’s identify the problem.

Personal Finance

Most retirement planning advisors recommend having over $1,000,000 in retirement savings by age 65. For those with nothing saved by their late forties, it’s a pipe dream to imagine they can magically come up with about $12,000 a month to prepare for their “golden years.”

This blog is targeted to Gen Xers, and Baby Boomers. Those born between 1946 and 1979 face a retirement income crisis. Why?

In fact, about a third of all boomers have no pension and no money set aside for retirement by they time they reach 58.

According to Plansponsor, Gen Xers lack confidence in their retirement plans and many are behind schedule on their savings.

Furthermore, the boomers who have managed to accumulate some investments for the last three decades of their lives, don’t have enough. Those with a retirement account have a median nest egg of only $200,000. Gen Xers are a few years behind, but face the same situation.


Boomers have a longer life expectancy than previous generations. 11% of Generation X workers expect to live past 100. If you do reach 65, the odds are in favor of your living till you are 84.3 years old.


Here’s the double whammy. Boomers and Generation X are also known as the sandwich generation. On top of caring for aging parents, many of them are also saddled with supporting fully grown children. College loans are never forgiven or discharged.


Yes. You must still pay taxes on income after you retire. Get smart now. By doing some simple retirement income planning you can minimize the tax bite later on. Here’s a good blog from nerdwallet on dong just that.

We all know that you can defer taxes on income by making contributions to a standard IRA. The government gets their share when you begin making mandatory withdrawals. You can avoid that by setting up a Roth IRA. By following the rules, you can avoid taxes not only on what you contributed, but also on all the money you’ve made with your investments. Knowledge can be power.


The bottom line on inflation is this. Your money becomes less valuable every year. In other words, $100 next year will purchase less than $100 today. The Federal Reserve, the organization that sets monetary policy for the U.S. currency, has an explicit goal of maintaining a long term core inflation rate of 2% per year. That means that every year, your dollar loses an average of 2% of its value — and because those effects compound, in 35 years your dollar will be worth exactly half of what it is today.

This means you will need more money tomorrow than today to maintain the same standard of living.


Most articles regarding retirement income focus on how to invest. That’s not the problem. The real issue is, not enough money.

Most people approaching retirement age have been unable to set aside enough money to generate a source of income to last a few decades at the end of life. It’s no wonder so many boomers and Gen Xers are legitimately distressed about the possibility of not having enough money to retire comfortably.

The answer is to get more money.

Wealth Management

The name of the game is this: first, have wealth. Next, manage it to make sure it grows and sustains your needs in retirement. Acquiring sufficient wealth is the part of the equation most people struggle with. The approach taken by the WCM is not the standard advice you hear from most retirement planning advisors.

What Are the Possible Sources of Income for Retirees?

Social Security

Can you count on it or not? There are a lot of myths and misunderstandings surrounding the solvency of the Social Security Trust Fund. Forbes magazine published a helpful article titled – How The Latest Report on Social Security’s Solvency Changes Your Retirement Plan. If you have any concerns about this part of your retirement income plan, it is a worthwhile read.

According the the latest report from the Old-Age and Survivors Insurance trust fund (OASDI) the fund will be drained by 2034. That should concern anyone counting on getting a full allotment of their expected distribution. Even more concerning is that the annual cost of the program is expected to eclipse the amount of money coming in by 2020. That’s already upon us.

Furthermore, the cost of the program is expected to outpace income every year for at least the next 75 years. If that sounds problematic to you, you are in good company. Most retirement income specialists believe the benefit formula will be adjusted to pay out lower retirement benefits. They also advise their clients to expect higher Social Security taxes as well as means testing. In other words, the higher your income, the less benefit, if any, you will receive.

The bottom line. If you are planning on getting 100% of your retirement income from Social Security, think again.


We know we should be investing part of every pay check. Making a monthly contribution to our retirement savings is a wise and worthy goal. That money may be invested in the stock market, annuities, corporate bonds, or municipal bonds or any other income producing asset. Reality sometimes gets in the way.

  • Job disruption
  • medical emergencies
  • divorce
  • business failure
  • excessive spending
  • bankruptcy
  • needs of other family members
  • unexpected births and deaths

There are so many reasons making it impossible to invest regularly, you can’t list them all.


Sure, you can get a job as a greeter at Walmart to supplement your retirement income needs. It’s an option you see people taking advantage of regularly. There are all kinds of opportunities for seniors in the workforce. The real question is, what do you want to spend your time doing in your golden years?

By following the strategy explained below in the section titled Passive Income, I was able to invest $15,000 per month beginning at 54 years old. I was able to continue setting that amount aside for 10 years. The result put me in the top 1% as measured by net worth.

Liquidate Assets

Selling a life insurance policy, taking a reverse mortgage or converting jewelry to cash are all viable ways of converting assets to income. Here again, the problem is usually, not enough equity to supply all of your living expenses for several decades of life.

What Is the Best Way to Fund Retirement?

Build an Income Producing Asset

Working full time till you die is no one’s idea of freedom. Besides, no-one has more than 24 hours in a day. There’s no way to become wealthy or financially free by trading your own time for money. But, if you have no retirement savings or assets to liquidate, what is the alternative? It’s the secret used by the wealthy for centuries. It’s called passive income. We will show you how it works below. Keep reading!

Retirement Income Planning

Here are the first 3 steps in retirement income planning:

  1. Identify how much you need in order to maintain your standard of living
  2. Earn more money by cultivating streams of passive income
  3. Structure your tax accounts so that you can keep as much of your hard-earned money as possible

The sooner you start, the easier it is. Ask yourself this question. “If I continue doing for the next 10 years, exactly the same thing I’m doing today, will I be able to achieve my retirement income goals?” Your answer to this vital question will determine your course of action.


Life is good. Stay the course. Remain disciplined. Continue investing into your retirement savings monthly. Furthermore, add to the diversification of your retirement investment account.


Change what you are doing. The only way to do so is to face the facts. If you continue on the course you’re on now, you will come up short. No-one likes change. Nonetheless, when the pain of remaining the same is greater than the pain of change, you will change.

Creating Retirement Income

There are only two ways to do that.

  1. Money at work (make more investments)
  2. People at work (have a business)

We’ve already faced the facts. Not enough time to save enough money to have financial freedom in retirement. The following example makes that clear.

Money at work

The sooner you start setting money aside for a retirement account, the better. It diminishes the amount you will need to save. Let’s say you want a retirement income of $6,450 per month by the time you’re 65. Assume you can generate a 6% annual rate of return.

If you start saving at 25, you’ll only need to set aside $650 per month. Your total investment will be just $312,000 over 40 years.

If you start saving at 45, you’ll need to set aside $2,780 per month. Your total investment will be $667,200 over 20 years.

If you start saving at 55, you’ll need to set aside $7,850 per month. Your total investment will be $942,000 over 10 years.

The Investment Fallacy

Note: we used a 6% annual return as the basis for our projections. In truth, that is hard to achieve without accepting a higher degree of risk. The S&P 500 is a broad measure of the stock market. The average, long-term dividend yield of stocks in the S&P 500 Index, is 2.09%. That would produce $2,090 for every $100,000 invested. To receive $6,450 per month from the average stock yield would require a portfolio worth $3,700,000.

The problem most people have is that by the time they realize they need to start saving for retirement it’s too late! Most simply have no way of setting aside the amount required to assure having enough money to live comfortably for the last few decades of life.

Calculate what you will need with this compound interest calculator.

There has to be a better way. There is! It is passive income from the work of others.

People at work

You can be paid 100% on your own time. Or, you can be paid a small percent of the work done by hundreds or even thousands of others. Which sounds better to you?

Active Income

This income producing strategy is used by about 98% of the working public. It’s called trading time for money. This is what doctors, attorneys, engineers, truck drivers, plumbers, electricians, dental hygienists, Walmart greeters, and almost every worker you can think of are doing. There is a major flaw. Stop putting in time and the money stops. The other drawback is you only have so many hours you can trade for money.

Passive Income

Generating multiple streams of passive income is the strategy we recommend for creating financial security in retirement.

This is the opposite of active income. You do the work once and continue to be paid over and over. You can also leverage it to be paid a small amount on a growing team of other workers. Examples are actors, musicians, authors, and network marketers.

We highly recommend that you read our page about creating multiple streams of passive income.

Before you can decide on how much passive income you need for retirement, first it helps to develop a budget to know what it costs to live.

Living Expenses

Start with the brutal truth. Living is expensive. There are a number of expenses that are non-negotiable.

  • rent or mortgage
  • homeowners association or home maintenance
  • groceries and food
  • utilities
  • health care
  • automobile or transportation
  • taxes
  • inflation (the value of your money)

Some expenses are variable

  • travel
  • entertainment
  • restaurants
  • charitable giving and donations
  • lifestyle choices

I recommend using the Schwab Monthly Budget Planner as a useful way to get a picture of how much to budget for living expenses.

Retirement Income Planning

Once you know how much you need to allocate for fixed expenses and discretionary spending can you design an income plan. By following the WCM Plan for Financial Freedom, you will be able to meet your needs in retirement.


The primary advantage of the WCM plan for financial freedom is that it requires almost no money. Yes, you will generate income, but it will be based on leveraging your own work, and the work of others as well. We all know that when something sounds too good to be true, it is. So, what’s the catch?

The plan calls for two things. First is specialized knowledge. Second is the ability to defer immediate gratification. You see, you will need to get fully informed. You will also need to take very specific action. That’s because generating income is the result of doing things in a certain way.

The Best Way to Fund Retirement

Create a stable $15,000 per month passive income. Another way to think about it is that it is the monetary equivalent of having a retirement account that produces a 6% annual yield. It would take $3,000,000 to generate $180,000 a year. That is $15,000 per month in income.

What does it take?

  • possess or learn the right skills
  • self discipline
  • strong work ethic
  • the ability to follow a proven system
  • minimum of two hours of work daily
  • 2 – 4 year time horizon

Income Stream

The formula for success that we at the Wealth Creation Mastermind advocate is multiple streams of passive income. Our experience has illustrated the benefits of building your income stream with a method called network marketing. We highly recommend that anyone seeking financial security and time freedom in retirement learn about this dynamic channel. Read our blog titled – What is Network Marketing?

It is the first in a seven-part blog series designed to give you all the information so that you can make an informed decision.

Your Best Pathway to Retirement Income Security

Take control of your destiny. Begin today to build the foundation for a secure, happy and fulfilling retirement. Learn the skills, master the mindset and deploy the strategy we teach for the creation of multiple streams of passive income. It begins by enrolling in The WCM’s Law of Attraction Course. It’s free. There is no obligation. No risk to you.

What’s more, you can start at any age. Moreover, it doesn’t matter how young or old you are. This avenue is available to anyone with the desire, discipline and drive to put it into action.

You are invited to learn about it for free. We encourage you to fill out the form to become a member of the Wealth Creation Mastermind.


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Stever (AKA Stephen Rousseau)

We should change our paradigm from waiting for retirement to getting to financial freedom. The goal is the same, but there is no need to wait until you are old… take the same steps to make this happen as soon as possible.


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