Retirement Income

Brent O’Mara has sat with clients through deaths in the family, divorces and other transitions, and celebrated new grandchildren, anniversaries, business transitions and retirements with them. The entries in this subject take the last item on that list and treat it as general education: how a working income becomes a retirement income, and what the rules and the research say about making it last.

The oldest piece of the system is Social Security. History.com records that the act signed in 1935 paid benefits to retirees over 65 on the strength of lifetime payroll contributions, with the working generation funding the retired one.⁶ When to claim is the decision most retirees face first. The Consumer Financial Protection Bureau explains that benefits may be claimed as early as 62 or as late as 70, that the full claiming age is 67 for anyone born after 1960, and that waiting moves the monthly amount from 30 percent below the full benefit to 24 percent above it.² The Social Security Administration publishes the table behind that: for those born in 1943 or later the benefit rises by two thirds of one percent for each month claiming is delayed past full retirement age, until the increase stops at 70.¹

Savings are the other half, and the best known rule of thumb for drawing on them has a documented origin. The New York Times told how a California planner, finding no guidance in his textbooks, computed in 1994 that a retiree who withdrew 4 percent of a starting balance and then adjusted that dollar amount for inflation each year would have been paid for thirty years through every period since 1926, and how the rule has been replicated, criticized and refined since.³ CNBC interviewed its author in 2025, who stressed that the rate applies only to the first year and called inflation the greatest enemy of retirees.⁴ What people actually do is different again: the Employee Benefit Research Institute found that retirees drew down their non housing assets slowly, that those with pensions drew them down least, and that about a third had more at the eighteen year mark than when they retired.⁵ Required distributions, Medicare and how each account is taxed turn on personal circumstances, and the decisions rest with qualified professionals in tax, law and finance.

The entries in this subject are Sequence of Returns Risk, Social Security Claiming Basics, Medicare Basics, Required Minimum Distributions, The Four Percent Rule, Pensions and Defined Contribution Plans, Inflation and a Long Retirement, Working Longer and Phased Retirement and Longevity and Planning Horizons.