Your retirement paycheck is funded by the different savings vehicles you have used. This can be a combination of stocks, bonds, mutual funds, individual retirement accounts, Social Security or for some, pensions. Ensuring you have a steady stream of income after you stop working should be a key part of your retirement planning.

For decades, your employer has paid you as you worked hard to earn a salary. When you start retirement, you can enjoy not working, but you might still wonder, “How am I going to be paid after all these years of saving?” The short answer is you will receive distributions from the different accounts you have established.

Understanding individual retirement accounts

An individual retirement account (IRA) comes in two account types: Roth or traditional. IRAs prepare you for retirement and provide tax advantages, allowing you to choose whether to make contributions tax-free (traditional) or receive your distributions tax-free (Roth). The sooner you begin putting money into an IRA, the more time your money has to grow before you reach 73, the age at which you are required to begin taking distributions from a traditional IRA account.

Understanding employer sponsored accounts


An employer has a few different saving vehicles that they can offer employees. One being a 401(k), which is a tax-deferred retirement savings account. Employees contribute money to their account via elective salary deferrals, meaning a percentage of their salary is withheld and contributed to the 401(k). Oftentimes, employers will match employee contributions up to a certain limit or percentage as an added employer benefit.


A pension is a defined benefit from your employer, meaning your employer will pay you a set amount for the rest of your life after you retire. This benefit has disappeared for many, but some in public service jobs may still receive one. Look through your employee benefits to see if this is something you will receive. There could be different parameters such as working a certain number of years that you will want to be mindful of to receive the benefit. In addition, if you receive a pension, you will want to investigate if you have been contributing to Social Security. If not, you will not qualify for Social Security payments in retirement.

Understanding taxable investment accounts

A taxable investment account consists of stocks, bonds or mutual funds. These accounts can help you earn a return on the money that you invest ; however, they each come with a different amount of risk. Talk to your financial planner to see how much risk you are comfortable with as you plan for retirement. These accounts can ebb and flow with the stock market.

Receiving payments

Each of your accounts is going to have different distribution parameters and pros and cons to when you withdraw money. You might have minimum distribution requirements for certain accounts that you’ll need to follow to avoid penalty fees or taxes. When you receive payments, which accounts you withdraw from and how you receive them is a topic you should discuss with your financial team to ensure you have the best strategy in place for your unique needs.

After you have established your payment strategy, one of the easiest ways to receive a retirement payment is through a direct deposit. You can set this up from your different accounts to be automatically deposited into your checking account. These payments can come once a month or once a year. Either option depends on your goals, spending habits and ability to budget. Your financial team can work with you on a strategy that suits your needs and is best for your account structure.

Have a savings reserve

As you enter retirement and become used to your new distribution structure, remember to continue to keep some money in savings. Even in retirement, you want to have approximately the equivalent of three to six months of expenses in an easily accessible savings account for unexpected purchases or expenses. These funds can also come in handy if you decide to take a last-minute trip or you want to spend some on gifts for others.

Communication is key as you plan for your retirement. Your financial team can help you structure your retirement payments to meet your goals and ensure you enjoy your golden years.

Interested in learning more about Private Wealth Management? With UMB, you have a guiding partner from financial advising and investment portfolio management, to wealth-building strategies and retirement and legacy preservation plans.

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Financial planning services are offered by UMB Private Wealth Management. UMB Private Wealth Management is a division within UMB Bank, n.a. that manages active portfolios for individuals, fiduciary accounts, employee benefit plans, endowments and foundations. UMB Bank, n.a., is a subsidiary of UMB Financial Corporation.

This material is provided for informational purposes only and contains no investment advice or recommendations to buy or sell any specific securities or engage in any specific investment strategy. Statements in the presentation are based on the opinions of the author and are subject to change at any time without notice. You should not use this presentation as a substitute for your own judgment, and you should consult the appropriate financial professional before making any tax, legal, financial planning or investment decisions.

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