While you were still in the workforce, you could count on your paycheck regularly hitting your bank account every two weeks. Now that you’re retired, a reliable source of retirement income isn’t always guaranteed. U.S. News & World Report found that the following are the 10 largest sources for retirement income for retirees today.

• Social Security. A Gallup survey of 1,020 Americans, found that 54% of retirees count on senior Social Security as a major source of retirement income. Approximately 34% of current workers plan to depend on senior Social Security to fund their retirement income.

• Retirement investing. The survey also found that nearly all Americans expect to fund their retirement income with a 401(k), IRA or retirement mutual funds. However, only 22% of current retirees believe that withdrawals from their retirement accounts are a primary source of retirement income.

• Pensions. These seem to be pretty much a thing of the past. Today, fewer companies are offering pensions and those just entering the workforce may receive smaller payouts than long-term employees. About 37% of current retirees receive retirement income from a pension.

• Savings accounts and CDs. The Gallup poll reports that 13% of current retirees use the money in their retirement savings accounts and certificates of deposit to pay for expenses, while 22% of current employees hope to tap into their savings as a source of retirement income. Investment advisors recommend that retirees keep between two and four years’ worth of retirement income outside of the stock market to protect against market downturns.

• Stocks for retirement and retirement mutual funds. About 14% of current retirees count on dividends and sales of stocks or retirement mutual funds to help boost their retirement income.

• Home equity. Given the state of the real estate market, using your home equity to supplement your retirement income isn’t the best idea. The Gallup survey found that only 20% of today’s retirees plan on using this tactic. If you are in need of additional retirement income, a reverse mortgage can be an option, but proceed with caution.

• Supplemental retirement income. While only 4% of retirees in the Gallup survey said they currently work part-time, 18% of employees think they will work part time in retirement. To learn more about working in retirement check out RetirementJobSite.com.

• Inheritance. Expecting a windfall to fund your retirement can be risky at best. Your relative may change his or her beneficiary forms or live longer than expected and need to use those funds. Only 3% of current retirees surveyed said that an inheritance is a source of retirement income.

• Annuities or insurance. An annuity is a financial product that guarantees you will receive payments for a specified period of time – or even a lifetime. Only 8% of those responding to the Gallup survey note that annuity payments or insurance plans will become a large part of their retirement income. As always, consult your financial advisor before purchasing any insurance or annuity policy to see if it is appropriate for your situation.

• Rental income. If you own property, you may be looking toward rents to help provide retirement income. Nearly 6% of working Americans expect to receive income from rental properties. Of course, you shouldn’t count on rental income as the main source of your retirement finances, it can help provide a steady stream of retirement income.

Changing careers when you are in your late 20s is one thing, but what about the baby boomers who have had to postpone retirement from lack of retirement investments and retirement savings? Is it possible for seniors to change their source of supplemental retirement income so late in the game? The quick answer is, yes. The choice for many seniors still in the workplace has become either

• How do I make sure I am indispensible to my company
• Should I be looking to change careers

Success stories:

• Karen needs a bachelor’s degree to be promoted by her state government employer and at 59 she is on track to graduate with her bachelor’s of science in criminal justice next fall. She also says that “continually learning on a daily basis keeps the brain young and alive and in proper working order!
• At 55 Robert retired from engineering to fulfill his long time dream of working in health care. Today, he is in his second year of Kaplan’s bachelor of science in health care management.
• Inspired by her grandmother’s college education in her 50s, Patricia returned to school and received her bachelor’s degree at 54; one year later she is in the midst of getting her master’s in legal studies.

Tips for changing careers:

• Make a list of the skills and knowledge acquired from each position you’ve held. Realistically evaluate your transferable skills and compare them directly to the requirements for the career or job you’d like to pursue.
• Keep your skills current, taking every opportunity to improve and keep up with industry trends. • Seek out people in your newly chosen field to guide you and show you the ropes. Most will be more than happy to help.
• Be flexible about job options — consider part-time or even volunteer work to get your foot in the door.
• Remember the mantra, “It’s never too late.” Don’t be put off by naysayers or negative reactions. While it’s scary to change careers, it’s scarier to not live out your dreams.

Times change, and with them also change the best states to retire in with the lowest taxes on retirement income. We told you where in 2010 the best tax-exempt states were, and now we’ll give you the 2011 list! All these retiree tax heavens exempt Social Security benefits from state income taxes. Many of them exclude government and military pensions from income taxes, too, or offer blanket exclusions up to a specific dollar amount for a wide variety of retirement income. Although relocating to an income-tax-free state such as Florida or Texas may sound appealing, sometimes the best retirement destination is a state that imposes an income tax but offers generous exemptions for retirement income. Take a look and see if these states offer you the retirement activities you’ve always wanted out of retirement in a climate you love, and at a price you can afford! Wyoming State Income Tax: None State Sales Tax: 4% Estate Tax/Inheritance Tax: No/No Mississippi State Income Tax: 3%-5% State Sales Tax: 7% Estate Tax/Inheritance Tax: No/No Pennsylvania State Income Tax: Flat rate of 3.07% State Sales Tax: 6% Estate Tax/Inheritance Tax: Yes/Yes Kentucky State Income Tax: 2%-6% State Sales Tax: 6% Estate Tax/Inheritance Tax: No/Yes Alabama State Income Tax: 2%-5% State Sales Tax: 4% Estate Tax/Inheritance Tax: No/No

According to a recent JP Morgan survey of 1,000 401k investors, many retirees are ill prepared with basic retirement budget knowledge once they retire, such as how to turn their retirement investments into retirement income, or how to access their retirement savings data. American retirees are seemingly having trouble determining how much retirement income they will actually need in retirement.  In addition, understanding how much is in their 401k investments, knowing how to take money out and turn it into repeatable income, and other financial obstacles have become challenges for the boomer generation. In fact,

• 86% of retirees said they will need to know how much of their pre-retirement salary they can replace, but 22% are not sure what they are on track to receive once they stop working.
• Only 40% feel comfortable that they will be able to reach their financial goals in retirement.
• 45% of retirees believing they will need less than 75% of their pre-retirement salary. JPMorgan recommends at least 70% or more.
• 66% don’t know how much they should be saving for retirement.
• Nearly half are scared they will outlive their retirement savings.
• Of those who think they will need 75% to 100% of their pre-retirement salary, less than a third had enough savings to provide this level of income.

The question “will I have enough retirement income when I retire” is being asked by more and more Americans each day. With the instability of senior social security, retirement travel costing more and more, and retirement savings just not going as far as they used to, it’s a valid question to ask. How do you make sure your retirement income is enough to allow your retirement to be comfortable? It’s really quite simple – know your retirement income plan. Being organized and having a plan surrounding your retirement investments, savings, and income will give you the financial confidence you need when dealing with retirement, whether that day is coming next year, or in 20 years. The key is to manage reasonable goals for yourself both now and for retirement.

Goals for Retirement – financial and personal

Finances for the Basics

• Food
• Shelter
• Clothing
• health care
• transportation
• retirement mortgage

Know your Benefits

Retirement Investments

You can’t account for everything, and surprise expenses can put you back months or years of planning in one swoop. Imagine having your water heater or air conditioning break. Do you have enough cash available right now to fix it? This is why you should incorporate an emergency fund in your retirement income plan. An emergency fund should be enough money to cover major expenses. For those not yet retired, this can come in handy if you find yourself without a job and need enough cash to pay bills while seeking new employment. To determine how much money you need to add to your retirement income plan, it’s a good idea to add up your monthly expenses for the last three months. Things to include would be:

• Mortgage payments
• Utilities – including cell phone, cable, internet and landline bills
• Groceries
• Insurance
• Car expenses – include gas and loan payments
• Property tax
• Spending money – face it, you can’t avoid all spending, even in tough times

Choose the Right Account

Check In Once A Year

Take A Deep Breath

The Treasury Department passed a new law, going into effect today, which protects the retirement income of seniors. Banks can no longer garnish funds from consumers receiving federal benefits without leaving at least 2 months worth of those benefits in their accounts. This new law will help retirees and other who depend on the government payments, like from senior social security, as their major source of income. Along with social security benefits, disability payments, Supplemental Security Income, and the majority of other government payments are off limits for banks to touch. However, the law does allow a few loopholes for banks to go through. Banks are allowed to garnish funds from said accounts if the following circumstances occur:

• If the individual has defaulted on debts linked to a credit card
• If the individual is behind payments for utility payments, medical bills, alimony and other types of loans
• If the creditor wins a judgment against the debtor
• If you owe money to the government (like taxes on retirement income)

The hassle of tax season almost seems worth it if you’re one of the lucky who get a nice return 30-60 days later. When a check substantially larger than a typical paycheck gets in your hands, the first thoughts might be to spend it on superfluous items like retirement travel or other retirement activities. However, as the saying goes, it’s better to be safe rather than sorry. Having a plan for how to spend your tax refunds – smartly - can not only put you in a financially healthy place, but can also allow you to be freed up for future spending. The following are 4 smart ways to spend your tax returns this year.

Pay off high interest debt.

Build an emergency fund.

Invest.

Enjoy an experience, not an item.

Today, rising prices for everything from gas, food and clothing are being felt by even the most affluent retirees. If you’re on a fixed income, then wondering how to preserve your retirement income is an increasingly bigger concern. A recent study by LIMRA found that more than half of retirees surveyed fear changes to Medicare and senior Social Security, as well as tax increases, will threaten their retirement income even further than inflating prices are already doing.  Those surveyed were people 55-79 in retired families who were getting by on income of $35,000 or more. The results showed that 85% of those in the survey group were receiving significant retirement income from senior Social Security, with 76% also saying they were receiving retirement income from a traditional defined benefit plan. Only 18% were receiving retirement assets from a defined contribution retirement fund. If your retirement savings are not increasing as fast as your expenses, the first place to start is to cut back as much as you can. Consider:

• Saving on gas by carpooling, walking, biking or taking public transportation.
• Cut down on eating out or on non-essential items such as cable TV.
• Use coupons and shop on sale.
• Buy store brand rather than name brand items, substitute less-expensive cuts of meat for higher-priced ones – or consider a more vegetarian-based diet.

• General help. Benefits.gov, the federal government’s central clearinghouse for aid is varied and offers career help, veteran’s benefits, nutrition assistance and tax advice. Additionally, Eldercare Locator connects people to local services that offer free or discounted food, home repairs and transportation.

• Health care. Federally funded health centers offer treatment, checkups, dental care and prescription drugs. Payments are based on your income. If prescription drugs are a major portion of your retirement budget, ask your pharmacist if there are lower-cost generic drugs available.

• Housing assistance. Contact the U.S. Department of Housing and Urban Development to learn about subsidized housing, public housing and rental vouchers for those with low incomes. Another option is to downsize your current residence or share housing with family members or friends to lower your retirement expenses.

• Energy assistance. If you need help paying utilities, look into the Low-Income Home Energy Assistance Program (LIHEAP). Also consider an energy audit to uncover new ways to lower your bills. Your local gas and energy providers offer free audits.