Retirement isn’t about stopping investing — it’s about investing for income. The goal: make your money last 30+ years while providing steady income.
Here’s how to structure your portfolio for retirement.
Retirement Income Sources
| Source | Average Amount | % of Income |
|---|---|---|
| Social Security | $1,900/month | 30-40% |
| Portfolio withdrawals | $2,000-4,000/month | 40-50% |
| Pension | Varies | 0-20% |
| Part-time work | Varies | 0-10% |
Social Security Maximization
| Strategy | Impact |
|---|---|
| Claim at 62 | Reduced benefits (30% less) |
| Claim at 67 (FRA) | Full benefits |
| Claim at 70 | +24% bonus benefits |
| Best for most | Wait until 70 if healthy |
The 4% Withdrawal Rule
The safest way to withdraw from your portfolio:
| Portfolio Size | Annual Withdrawal | Monthly Income |
|---|---|---|
| $500,000 | $20,000 | $1,667 |
| $750,000 | $30,000 | $2,500 |
| $1,000,000 | $40,000 | $3,333 |
| $1,500,000 | $60,000 | $5,000 |
| $2,000,000 | $80,000 | $6,667 |
How the 4% Rule Works
- Withdraw 4% of your portfolio in year 1
- Adjust for inflation each year
- Portfolio lasts 30+ years (95% success rate)
Example: $1M portfolio → $40,000/year → $3,333/month
Your 60s Portfolio
Income & Preservation (Age 60-65)
| Asset | Allocation | Fund | Purpose |
|---|---|---|---|
| U.S. Stocks | 40% | VTI | Growth + dividends |
| International | 10% | VXUS | Diversification |
| Bonds | 30% | BND | Stability + income |
| TIPS | 10% | SCHP | Inflation protection |
| REITs | 10% | VNQ | Real estate income |
Expected return: 5-7%/year
Withdrawal Strategy
Bucket Strategy
| Bucket | Amount | Purpose | Timeframe |
|---|---|---|---|
| Bucket 1 | 2 years expenses | Cash + money market | Years 1-2 |
| Bucket 2 | 5 years expenses | Bonds + short-term | Years 3-7 |
| Bucket 3 | Remaining | Stocks + growth | Years 8+ |
How it works: Live off cash while markets recover from downturns.
Healthcare Planning
| Age | Medicare Eligible | Action |
|---|---|---|
| 60-64 | Not yet | Budget for ACA insurance |
| 65+ | Yes | Enroll in Medicare |
| All ages | Max HSA contributions |
Healthcare costs: Budget $300-500/month for Medicare premiums + out-of-pocket.
Common 60s Mistakes
| Mistake | Why It Hurts |
|---|---|
| Being too conservative | Inflation eats purchasing power |
| Claiming Social Security early | 30% permanent reduction |
| Not having healthcare plan | $300-500/month surprise |
| Giving too much to kids | Your retirement first |
| Ignoring inflation | 3% inflation = prices double in 24 years |