Daniel Broadway | Licensed Insurance Agent | Broadway Financial Group
How Dependable Is Your Retirement Income?
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Answer a few quick questions to get your Retirement Income Score.
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Your Retirement Income Score is an educational planning indicator based only on the answers you provided and simplified assumptions. It is not a credit score, financial rating or guaranteed prediction, and it has not been independently validated. It does not consider your full financial situation.
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Includes hypothetical examples, your dashboard, calculators and research. Each keeps its own labels and disclaimers.
How much of your desired monthly income is covered by dependable sources versus what would need to come from savings.
Hypothetical. Uses your savings, the default base-case assumptions shown in Calculator 2 (which you can change), and your annual income gap as the withdrawal, increased each year by the inflation assumption. No future contributions are assumed. Not a guarantee of future results.
Every value starts with your answers. Change any input and results update instantly. All figures are hypothetical and for education only.
A short, plain-language summary of research often cited in retirement income planning. It is educational, not a recommendation, and it does not affect your score.
Calculated from the Social Security Administration’s 2023 period life table, a 65-year-old has roughly a 51% chance of reaching 85, 30% of reaching 90 and 11% of reaching 95 (average of the male and female tables). For couples, the chance that at least one partner reaches those ages is higher. Planning only to average life expectancy leaves about half of people needing income for longer.
Source: SSA Office of the Chief Actuary, Actuarial Life Table (Period Life Table, 2023).
Yaari (1965) showed that, in a model where a person has no wish to leave a bequest and annuities are fairly priced, a person would choose to hold savings in life annuities, because pooled income adds “mortality credits” that a regular portfolio cannot earn. Pfau (2017) found that, in one case study, risk pooling could meet a spending goal with fewer assets, while an investments-only approach left more for heirs early in retirement. Results depend on assumptions, costs, legacy goals and the need for cash.
Yaari, M. E. (1965). Uncertain Lifetime, Life Insurance, and the Theory of the Consumer. Review of Economic Studies 32(2):137–150. Pfau, W. D. (2017). Retirement Income Showdown: Risk Pooling Versus Risk Premium. Journal of Financial Planning 30(2):40–51.
Babbel and Merrill (2007) suggest covering a minimum acceptable income with lifetime income after Social Security and pensions, and keeping other assets for emergencies, discretionary spending and legacy. This “safety-first” view is one of two main schools of thought (Pfau, 2014); the other relies on a diversified portfolio and a sustainable withdrawal strategy. Each has trade-offs.
Babbel, D. F., & Merrill, C. B. (2007). Investing Your Lump Sum at Retirement. Wharton Financial Institutions Center Policy Brief (study co-sponsored by an insurance company). Pfau, W. D. (2014). 2 Schools of Thought on Retirement Income. Journal of Financial Planning 27(4):30–31.
Studies using a long-running national retirement study (see sources) found that retirees with more of their income from lifetime annuities, mostly traditional employer pensions, reported higher satisfaction and kept it longer (Panis, 2003; Towers Watson, 2012). Wealth and other personal factors were also strongly linked to satisfaction. These studies show a correlation, not cause and effect: they do not show that buying an annuity will make any individual happier.
University of Michigan Health and Retirement Study. Panis, C. W. A. (2003). Annuities and Retirement Satisfaction. RAND Working Paper DRU-3021; also published as “Annuities and Retirement Well-Being” in Mitchell & Utkus (eds.), Pension Design and Structure, Pension Research Council / Oxford University Press (2004). Nyce, S., & Quade, B. J. (2012). Annuities and Retirement Happiness. Towers Watson.
Research summaries are simplified and may not apply to your situation. Some studies were funded by insurance-industry organizations. Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities can carry surrender charges and fees, and life-only income leaves nothing to heirs.
Your results provide a snapshot of your retirement income. But how much of your income goal is covered by dependable income, and where could the rest come from?
Schedule a 20-minute Retirement Income Review call with a licensed insurance agent to walk through your results, look at your sources of dependable income, and talk through insurance options that may fit your income plan. No obligation.
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