Making the shift from earning a paycheck to paying living expenses with other sources of income is a tough challenge for many retirees.
Certain income streams, such as Social Security and portfolio withdrawals, get a lot of attention as retirement approaches. But are there other ways to generate cash to help cover living expenses?
Guaranteed Income
In this skeptical day and age, the word “guaranteed” often makes retirees squeamish; it can sound like something from a scammy sales pitch. It might also raise questions about the long-term viability of Social Security or an insurance company’s ability to meet its obligations to annuity holders.
But retiring without some reasonable expectation that income will continue — or could be replaced by another source if necessary — would be especially risky. Maximizing what you could reasonably consider “guaranteed income” is a central goal of financial planning.
“Pensions, annuities and Social Security are all guaranteed income,” said Charley Corbett, a certified financial planner, founder and lead advisor at Local Wealth Advisors in Naples, Florida, in an email.
“The sequencing of when you turn them on is one of the most consequential decisions in retirement planning,” he added.
Here is a look at sources of reliable retirement income, along with some updates to watch for in 2026.
[Read: What Is a Good Monthly Income in Retirement?]
Safe Portfolio Withdrawal Rate
Factoring in your targeted annualized growth rate, your time horizon and your income needs, how much can you afford to take from your investment portfolio each year?
“I don’t have a single withdrawal rate that I recommend to every client; it depends largely on portfolio taxation and a handful of smaller factors,” said Jacob George, a CFP and retirement planner at Worthwhile Retirement in Greenwood, Arkansas, in an email.
“That said, I rarely recommend drawing less than 4.5% on average across an entire 30-year retirement, unless the client is intentionally trying to leave a monetary legacy,” he added.
George cited the research of William Bengen, who developed what’s come to be known as the 4% withdrawal rule in the 1990s. In 2025, Bengen updated his research, raising the baseline safe withdrawal rate to 4.7%.
He also calculated a maximum initial safe withdrawal rate of 5.81% for a 30-year retirement under a more aggressive scenario.
“I tend to think somewhere between 4.5% to 6% is appropriate as a starting withdrawal rate for a 30-year retirement,” George said.
He noted that it’s important to make the distinction between a retirement withdrawal rate and spending rate. “If we confuse ‘drawing 5%’ with ‘spending 5%,’ we can end up working and saving far longer than we need to,” he said.
What’s Changed With Annuities
Annuities are insurance products that convert a lump sum, deposited into an account, into guaranteed periodic payments.
Some are structured to pay out for a certain time period, while others guarantee income for the annuitant’s lifetime.
These products are useful to many retirees who are risk-averse or like the idea of locking up money they can’t easily access. However, they’re also controversial, as some products charge high fees and can be complex and difficult to exit.
“In the last few years, the higher (interest) rate environment has made annuities considerably more interesting than they were during the ultra-low rate years of not so long ago,” said Trent Von Ahsen, a CFP and partner at Cedar Point Capital Partners in Cedar Rapids, Iowa, in an email.
“Insurers can generally offer more attractive guarantees and income levels, and there has also been a tremendous amount of product development across fixed indexed and registered indexed-linked annuities,” he added.
That shift is showing up in the rates retirement savers can find from insurers.
“As of this week, five-year fixed annuity rates are showing roughly between 5% and 6%,” said Jason Gerstenberger, founder of Insured With Jason near Schenectady, New York.
Fixed annuities are typically paying about 1% more than certificates of deposit, he added. That allows savers to benefit from tax deferrals, as long as they aren’t taking withdrawals from the account.
New Types of Annuities
Insurers have responded to changing consumer needs by rolling out new products.
— Registered index-linked, or RILA, annuity sales are expected to grow fromabout $80 billion to $85 billion this year, up from $24 billion in 2020. That’s according to insurance industry researcher and data provider Limra.
— As the name suggests, RILA returns are tied to a market index, such as the S&P 500. They offer growth potential along with some built-in protection against losses.
— Insurers also introduced fee-based annuity products in recent years. Limra reported that sales of these annuities have doubled since 2020 as more registered investment advisory firms, which can’t take commissions for product sales, work annuities into fee-only planning.
Part-Time Work
It may seem like an oxymoron to work in retirement, but that’s exactly what many people are doing to generate additional income.
According to a June 2026 report from LendingTree citing U.S. Census Bureau data, 18.7% of retirement-age Americans were employed in 2025. That percentage has been growing in several states.
Working longer is a proven way of delaying required minimum distributions or Social Security, which can extend the life of a retirement portfolio.
[See: 10 Part-Time Retirement Jobs That Pay Well]
When to Claim Social Security
Waiting until 70 to take Social Security will maximize an individual’s benefit. Even waiting until full retirement age will increase the monthly paycheck, but there are valid reasons why many retirees claim sooner.
Retirees can begin taking Social Security at age 62, but benefits are reduced for those below full retirement age, which is 67 for people born in 1960 and later.
The benefit rises by 8% each year for those who delay claiming beyond full retirement age, up until age 70.
“Waiting until 70 is a default, not a commandment,” said Jim Crider, CFP, a financial planner at Intentional Living Financial Planning in New Braunfels, Texas, in an email.
“Delaying is longevity insurance, and it’s most valuable for healthy people with long-lived parents, and for the higher earner in a marriage, because their claiming age sets the survivor’s income floor for potentially decades,” he added.
Why Guaranteed Income Gets Spent Before Savings
Crider cited 2021 research from David Blanchett and Michael Finke, showing that retirees tend to spend money that comes in as guaranteed income, like Social Security or a pension check, more freely than money coming from an investment portfolio.
According to Blanchett and Finke, “Surveys reveal a clear preference among retirees to live off income, and many don’t feel comfortable spending down assets to fund a lifestyle. This is surprising since funding a lifestyle is presumably what motivates retirement saving to begin with, and few retirees indicate a desire to pass on significant wealth at death.”
Ways of generating spending money outside a portfolio “could take the form of delaying claiming Social Security retirement benefits, choosing a job with an employer pension, or purchasing an income annuity from an insurer,” wrote Blanchett and Finke.
More from U.S. News
10 Reasons to Save for Retirement in a Roth IRA
The 401(k) ‘Super Catch-Up’ Contribution Guide for Ages 60+
2026 Guide: Pros and Cons of Annuities
Guaranteed Income Strategies for Retirement originally appeared on usnews.com
Update 08/19/26: This story was published at an earlier date and has been updated with new information.
