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How to create a pension equal to salary

Creating a reliable cash flow upon retirement is not an easy task. Sustainable income for the rest of life can be provided by the right choice of each person. Retirement includes many important decisions writes StarTribune.com.
How to create a pension equal to salary

The critical time for income planning in old age is 10 years before retirement. Understanding of some key principles can make a future life easier.

Annuities

Retirement annuities are insurance products that can offer lifetime income. If you have been saving for a future pension for over 30 years, then a considerable sum is formed on the accounts.

The 4% rule

Investment accounts can make a good increase in RA. Scientists have come up with a formula called the "The 4% Rule". In 1998, several professors from Trinity University conducted a study, "What Happens to a Cash Account at Different Withdrawals”. Mathematicians found that with an annual withdrawal of 4% of the amount of investment accounts, in 96% of the scenarios the sum remains unchanged even after 30 years of using the money.

Keep being investors

Many retirees are tempted to transfer their money into “safe” investments, such as bonds, certificates of deposit, or savings accounts. Unfortunately, these investments can seriously lose out inflation. In this case it is better to divide the portfolio into safe, low-risk and high-risk instruments.

If you use three tips, then the pension may exceed salary.

Source: http://www.startribune.com/how-to-create-a-retirement-paycheck/566662341/

Photos are from open sources.

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