Turning Savings Into Retirement Income
How retirees combine income sources, what a withdrawal rate is, why the order of returns matters, and how time-segment frameworks organize spending.
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Key Terms
Words You Will Meet
Short definitions from the glossary for this topic.
Open the full glossary- Required minimum distribution (RMD)
- The amount that owners of certain tax-deferred retirement accounts must withdraw each year once they reach an age set by law. The rules and starting age have changed over time and depend on the account type.
- Roth account
- A retirement account funded with money that has already been taxed, so that qualified withdrawals in retirement are generally tax-free. Eligibility, contribution rules, and withdrawal conditions are set by law and change over time.
- Sequence-of-returns risk
- The risk that poor returns arrive early in retirement, when withdrawals are being taken, and permanently reduce what a portfolio can support. The same returns in a different order can produce very different outcomes.
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