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4 Factors Influencing Retirement Income

Retirement portfolios were originally designed to supplement a pension plan and Social Security income. With the decline in defined benefit (DB) plans and the rise in defined contribution (DC) plans, retirement portfolios have shifted from a supplemental source of income to a core source of income – and made proper planning imperative to success.

While there are no account balances for DB plans, the account balances found in DC plans changed the mechanism of retirement planning. Retirees must ensure that they save enough to fund their retirement, and potentially leave money to their heirs. Successful planning depends on coordinating four key factors that influence income.

Let’s take a look at the four factors that influence retirement income and how the current market environment is affecting them.

Be sure to check out the Retirement Channel to learn more about retirement planning concepts and strategies.

Interest Income & Dividends

Treasury yield
10-Year Treasury Yields Over 54 Years - Source: Macrotrends

Principal & Capital Gains

S&P 500 Shiller pe ratio
S&P 500 Shiller P/E Ratio - Source: Multpl

Adjusting to Today’s Market

The Bottom Line