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4 Retirement Income Strategies: Which One Fits You Best?

In this article, we'll delve into Dr. Wade Pfau's four primary Retirement Income Strategies outlined in his book, "The Retirement Planning Guidebook." I'll provide a simplified overview and share my perspectives on each. Let's get started!

Probability-Based Income Strategies:

1. Pure Probability-Based Strategy

This strategy caters to those seeking a diversified investment portfolio of stocks and bonds, relying on total return investing for income withdrawal. It hinges on portfolio growth to sustain retirement spending, aligning with principles like the 4% rule and safe withdrawal rates.

For success with this strategy, it's crucial to:

  1. Choose a prudent withdrawal rate.

  2. Maintain a well-diversified portfolio.

  3. Steer clear of market timing and panic selling.

2. Probability-Based Strategy with Annuities

This variation involves adding indexed or fixed annuities to a diversified portfolio. It offers a safety net in case your portfolio falls short of providing needed income later in retirement. While some view annuities as low-risk alternatives, careful consideration is advised.

3. Alternative Version of Probability-Based Strategy

For those averse to annuities, consider bolstering your diversified portfolio with 2-5 years of safe investments. This acts as a buffer during market downturns, reducing the need to sell stocks or long-term bonds at a loss.

Safety-First Income Strategies:

1. Safety First Strategy with Annuities

This approach is designed for those apprehensive about market volatility. It involves allocating some or all risk to an insurance company through fixed annuities or Single Premium Immediate Annuities (SPIA). This provides guaranteed income for essential expenses, offering peace of mind.

2. Safety First Strategy with Investment-Based Buckets

This strategy employs individual bonds and rolling bond ladders for short to intermediate-term income, while a diversified portfolio caters to longer-term expenses. This approach helps navigate market downturns without tapping into the growth portfolio prematurely.


Retirement income planning can be complex, with various viewpoints and strategies available. The key is to find a strategy that aligns with your goals and risk tolerance. Seek unbiased advice, conduct thorough research, and make informed decisions.

Remember, there's no one-size-fits-all solution. The best strategy is one that you can implement consistently throughout retirement. I hope this guide has provided you with valuable insights into the four main retirement income strategies.

If you found this information helpful, consider reaching out to me, George Jameson, a Certified Financial Planner Professional with Capital Wealth Group, at for personalized assistance with your retirement plan.

Disclaimer: The information shared here is for educational purposes only and not intended as tax, legal, or investment advice. Consult with your advisor before making any decisions.

Thank you for joining us today, and I look forward to helping you achieve your retirement goals.

Learn more about Capital Wealth Group and George Jameson, CFP®, MBA, a Financial Advisor based in Columbia, SC, CLICK HERE!

George can be reached at (803) 250-6464 or

Check out Capital Wealth Group’s Blog Page CLICK HERE!

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