Lump Sum

Determining income needs is the critical factor in successful retirement planning . Reaching a desired amount of savings is useful, but translating that lump sum of savings into an income stream that lasts for many years is the most important financial planning challenge that retirees face. "“When it comes to retirement planning, Americans need to look beyond the ‘number,’” said Fishbein. “We all know what the number is: That magic dollar figure that, when reached, means you’re set in...

"Unlike traditional pensions, which provide participants with a steady stream of income for as long as they live, 401(k) plans generally pay out benefits as lump sums. Lump-sum payments mean that retirees have to decide how much to withdraw each year. That's really hard to do, because people don't know how long they are going to live. If they live longer than expected, they face the horrible prospect of running out of money in old age...The way to have the highest standard of living in...