How much of my retirement income should come from guaranteed sources versus my portfolio?
A widely used framework is to cover your essential, must-pay expenses, housing, food, insurance, utilities, with guaranteed income like Social Security, a pension, or an annuity, and fund discretionary spending, travel and hobbies, from your investment portfolio. That way a market crash threatens your vacations, not your rent. Add up your bare-bones annual expenses, subtract expected Social Security and any pension, and if a gap remains you can decide whether an annuity should fill it. Retirees who floor their essentials with guaranteed income tend to report less anxiety and are less likely to panic-sell in downturns, because their basic security doesn't depend on the market.
Educational disclaimer: All content on WealthSerene.com is for educational purposes only and does not constitute investment advice. Projections and calculations are illustrative — actual results will vary based on market conditions, your specific situation, and many factors outside this tool’s scope. Always consult a qualified financial professional for advice specific to your situation. View full disclosures →