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Retirement Income Strategies

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Call us at 888-213-4695 or visit your local branch.

After you've spent so many years saving and investing for your retirement, it can be intimidating to figure out how to live off those funds. Start with a big-picture overview of what it takes to help generate retirement income that lasts.

Your best approach for generating income will depend on a number of factors: how much you’ve saved, how much income you’ll need, and how long you’ll need it.


Interest and dividends
Interest and dividends
Withdrawals from principal
Interest and dividends
Withdrawals from principal
Annuity income

What you can do now:


As you transition from building your nest egg to living on it, your investment approach will likely need to become less growth-oriented and more income-focused. The investments you choose will depend largely on your goals.

With a defined benefit pension plan, you'll likely face a choice at retirement on whether to take a qualified one-time lump-sum payout—which can be rolled over directly into a Traditional IRA—or to receive a monthly annuity payment for the rest of your life.

When considering your choices, life expectancy is an important factor. The longer you live beyond your actuarial life expectancy, the better the annuity deal becomes. A fixed annuity for life can provide a reliable nonvariable cash flow source that could help boost spending power while taking pressure off of a variable, traditional retirement portfolio.

However, there are many factors to consider, including annuity payout rate, life expectancy and your health, other income sources, portfolio size, inflation, your tax situation, and your willingness and ability to manage your own retirement portfolio for income. Keep in mind that it's not an all-or-nothing decision.

Also, keep in mind that annuity guarantees are subject to the financial health and claims-paying ability of the issuing insurance company. 

What you can do now:

  • Watch the short video: 2 ways to generate guaranteed retirement income for life.
  • Consider your life expectancy to estimate how long you may need to live off of your retirement savings.
  • Be sure you’re comfortable with the credit rating of the annuity provider1 or pension fund—the higher the rating, the better—by checking with A.M. Best or Standard & Poor's. Then consider the advantage of leaving the risk of investment performance to others rather than taking it on yourself.
  • Consult your tax professional to understand the tax implications of your choice.
  • Always factor your gift and estate planning goals into any lump-sum-versus-annuity decision. If you take a lump sum, there may be some assets left over for your heirs. Unless there’s a spousal continuation on the annuity you choose, the annuity will stop payments in the event of your death. Consider annuities available through Schwab or call a Schwab Annuity Specialist at 888-311-4889.

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A Schwab Financial Consultant can help.

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