Free for 90 days: Sign up now and get 90 days managed free after your first deposit. See offer details

Income in Retirement

Understanding Retirement Income

For those in retirement, we offer advice on how much you can safely withdraw each month. Learn more about what you can expect when using your Betterment account for income in retirement.

Articles by Betterment Editors

By the Editorial Staff
Betterment Resource Center  |  Published: September 1, 2018




Income Advice on Retirement Goals at Betterment

The “Monthly Safe Withdrawal” recommended amount on the Advice Tab for retirement income goals is based on our retirement income model that assumes you update your withdrawal amount and allocation at least annually according to our recommendations, and that your age and lifetime horizon are correct. The recommendations will vary based on market performance, your cashflows and allocation changes. If you follow this advice, updating at least annually, we estimate that there is a 4% or less chance of depleting your portfolio before the end of your designated time horizon.

This is based on our research which uses Monte Carlo simulation. This means that test results are hypothetical and based on a specific set of assumptions. Withdrawal amounts are not guaranteed income. You should consider all of your sources of income both guaranteed and variable, as well as your expected cost of living, to make a cohesive income plan.

You can read more in our article about retirement income.

How much do Betterment’s retirement income features cost?

Retirement Income is a service that comes at no additional cost for our qualified retired customers. Customers will simply need to set their goal to be a “Retirement Income” goal and set their withdrawal amount accordingly. You can choose the goal type on your advice page. This process is very similar to when you create auto-deposits in your account.

Learn more about Betterment’s pricing

Can I get income from multiple accounts?

Yes-if you plan to draw income from both a Traditional IRA and a Roth account, for example, you will need to set up an automatic withdrawal from each one.

How do I add a retirement income goal?

To see our Safe Withdrawal advice, you first need to have a Retirement Income goal. Once created, use the tools on the goal’s Plan to see recommended safe withdrawal advice even before you fund your account.

To add a retirement income goal, first click “Add New” from the menu after logging in from a web browser. Or, from the mobile app, log in and click “Add goal/account.”

After you choose your account type (individual, joint, trust or IRA), you will choose the “Retirement” option and pick “No, I’m retired and looking to make regular withdrawals.”

I’d like to just “live off the gains” and not use my principal—is that possible?

In today’s low-rate environment, this is not possible unless you are willing to significantly reduce your withdrawals and therefore standard of living. “Yield chasing”, or seeking other sources of higher interest beyond CDs and risk-free treasuries, can result in unwanted risk concentrations in high-yield bonds and high dividend stocks.

We recommend a total-return investing strategy, which manages risk through broad diversification, and delivers income through the dividends and capital appreciation of the underlying portfolio.

Can you send me my Required Minimum Distributions (RMDs)?

We calculate RMDs for Traditional IRAs annually, and show the amount on your tax statement at the end of January. You can take this amount and set up automatic withdrawals at the frequency you like within Transfer, or take the withdrawal manually.

Can I withhold taxes from my withdrawals?

Tax withholding is the percentage of income tax that you elect to have withheld from your IRA distribution and sent directly to the IRS in an effort to mitigate your future tax liability.

The amount you withhold, if any, may differ from your ultimate tax liability. If your withholding ends up being too much, you will be due a refund when you file your tax return. If your withholding ends up being too little, you will owe an additional amount to the government when you file your tax return.

When you initiate a distribution from your IRA, you will automatically be prompted to choose a federal tax withholding amount. All customers will be defaulted to 10% withholding, but can select 0% or any other value between 10% and 100%.

What if I want to leave investments to my heirs?

Our advice model does not currently account for leaving assets to your heirs, but we plan to add this in the future.  For now, you can use the graphing capabilities on the Advice tab to estimate how much will be left at the end of the horizon given the withdrawals you enter.

That being said, can also add beneficiaries to any of your Betterment accounts, which would supersede any will or trust.

Back to Top

Recommended Content

View All Resources
How We Use Your Dividends To Keep Your Tax Bill Low

How We Use Your Dividends To Keep Your Tax Bill Low

Every penny that comes into your account is used to rebalance dynamically—and in a tax-savvy way.

Why Flexibility is Key in Withdrawing Retirement Income

Why Flexibility is Key in Withdrawing Retirement Income

A strong retirement plan relies on proper preparation. But flexibility in your plan may be the most important quality you can have.

Understanding Our BlackRock Target Income Portfolio

Understanding Our BlackRock Target Income Portfolio

Learn more about our BlackRock Target Income Portfolio, which is a bond portfolio designed to provide a steady stream of dividend income for retired customers.

Explore your first goal

Safety Net

This is a great place to start—an emergency fund for life's unplanned hiccups. A safety net is a conservative portfolio.


Whether it's a long way off or just around the corner, we'll help you save for the retirement you deserve.

General Investing

If you want to invest and build wealth over time, then this is the goal for you. This is an excellent goal type for unknown future needs or money you plan to pass to future generations.


Search our site

For more information and disclosures about the Betterment Resource Center, click here. | See our contributors.

*The Betterment Everyday Savings ("Savings") annual percentage yield ("APY") is as of . Individuals who sign up for the Betterment Everyday Checking waitlist receive a APY, which includes a promotional rate increase that extends at least for the duration of 2019 and until every individual on the waitlist has an opportunity to access Checking. Additional promotional rate increase offers will be made available upon the full launch of Checking. APY is as of without the promotional rate increase. APY is a variable rate that can fluctuate daily, based on the Federal Funds Rate and terms offered by banks participating in Savings. APY may change at any time without notice. Current APY can be found here. No minimum balance is required. There is a minimum deposit of $10.

Checking accounts and the Betterment Visa Debit Card (collectively "Betterment Everyday Checking" or "Checking") provided by and issued by nbkc bank, Overland Park, Kansas, Member FDIC. Funds deposited into Checking will be eligible for up to $250,000 of FDIC insurance. Betterment Everyday Checking made available through Betterment Financial LLC. Betterment Financial LLC does not charge foreign transaction fees for the use of the Betterment Visa Debit Card outside of the United States. However, Visa charges a foreign transaction fee of 1%. Betterment Financial LLC does not reimburse this 1% transaction fee on foreign ATM transactions or on any other foreign transactions or purchases.