The 10 Biggest Sources of Retirement Income

Most retirees derive income from multiple sources.

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Inheritance. An inheritance could solve all your retirement income worries. About 9 percent of current workers expect a significant amount of wealth to be willed to them, but only 3 percent of current retirees said an inheritance is helping to pay for retirement. The lesson: Inheritances don't always come through. "You benefactor could live longer than expected and need more of those assets," cautions Portnoff. "Beneficiary forms are very easy to change."

Annuities or insurance. Annuities are financial products that guarantee purchasers payments as long as they live. Some 8 percent of both current workers and retirees say annuity payments or insurance plans will make up a significant part of their retirement strategy. Retirees should be cautious about the fine print and expenses associated with these financial products. "Annuities are sold very commonly to older people that they are very inappropriate for," says Sheryl Rowling, an accountant and personal financial specialist for Moss Adams Wealth Advisors in San Diego, Calif. Ask an independent financial adviser to review your annuity paperwork before purchasing.

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Rent and royalties. Royalty payments typically come from patents, trademarks, or copyrights. Property owners can also earn money from their real estate investments. Some 6 percent of working Americans expect to receive income from rental properties or royalty payments throughout their retirement, and 5 percent of retirees continue to receive income this way. While it is generally not a good idea to make rental income the centerpiece of your retirement finances, it can make up a good portion of your retirement income. Says Rowling: "If you have real estate as a supplement to an investment portfolio and IRAs and other retirement income, then that can be a very good thing."