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While working, there is something we call payday, it may happen once a month, more likely two or four times a month. Generally that means money is deposited into our bank account – a steady income stream we count on to pay a new set of bills.
Then we retire and everything changes, no more payday. To me recreating that is the key to a less stressful retirement. I can say that because I am fortunate to be able to do so and know the feeling of a retirement payday.
On the first of the month my pension arrives as does Connie’s tiny ($400) vested pension from fifty years ago. On the 2nd and 4th Wednesdays Social Security is added.
Something else happens too. On the first of the month interest from our bond funds and money market accounts is credited to our investment accounts. Dividends are quarterly. It all stays there for now, but can add to our income stream in the future.
I know from years on HD that retirees have different approaches to creating income in retirement, some take a percentage withdrawal, others cash amounts based on a budget, many seem to reject an annuity purchase to create an income stream.
Some retirees have pensions. Virtually everyone has SS, but many delay that income for years after retiring.
One thing is clear, all retired people need steady income, but creating it is often a challenge, sometimes requiring careful planning and decision making, sometimes rather complicated-at least from my perspective.
I favor simple, steady, all on automatic pilot, a retirement payday little different from working years, but that’s easier said than done.
What have you done or plan to do to create your payday allowing you to sleep soundly at night (or during the afternoon nap if you’re already retired😁)?
Somewhat by dumb happenstance, we get paid seven times per month. Two IRA distributions during the first week, two SS deposits on the Saturday before the 4th Wednesday, two puny pension deposits during the final week, and interest deposits on the last day of the month.
You’re right, Dick, if I ever lose sleep, it’s not due to financial worry.
Good morning, Dick,
I like the way you frame this as a “retirement payday.” That really is the goal for me — to make retirement income feel as close to a regular paycheck as possible. Our plan has been to build a steady income floor first with our military pensions, my FERS retirement when I completely retire in 2029, Cathy’s current Social Security, and eventually my own Social Security. That gives us a dependable monthly base to cover the essentials without feeling like every market swing could threaten next month’s grocery money.
Then the TSP becomes more of a backup, tax-planning tool, and flexibility fund instead of something I have to depend on every month just to live. I’m also open to using part of it for an annuity if it helps create more predictable income. Everyone handles retirement income differently, but for me, the emotional side matters as much as the math. I want simple, steady, and mostly automatic — the kind of payday that lets you sleep at night and only interrupts the afternoon nap when another deposit hits the account. Just 2½ more years, and then that complete retirement payday starts.
All of the above! Wife’s Pension on the last day of each month. My Pension on the first day of each month. Social Security on the 2nd and 4th Wednesday of the month. MYGA annuity payment on the 6th of the month, We are very fortunate to have these income streams in retirement and rarely need to tap into our other retirement accounts for spending other than certain large anticipated purchases or funding i.e.grandkids camp payments.
Sounds very familiar