Below we'll offer three ways to achieve these goals. As with anything, there are tradeoffs, and in the second option below you'll see one where, in exchange for your principal, you can buy guaranteed income. The other two options leave you with more control, however with control comes risk and the potential for failure. There is no such thing as a free lunch, and retirement income is no exception, but this does give some ideas and options.

Option One- Traditional Stocks and Bonds

This May Be Right If:

You have enough income from Social Security and pensions to cover most of your basic expenses (so you could weather a market storm) and/or you're confident in your ability to manage your portfolio.

THE PLAN: A diverse selection of stocks and bonds offers the potential for appreciation, and dividend yields for cash flow. Sticking to the 4% rule, you limit withdrawals to no more than 4% of the portfolio per year. Remember, you have your income ALREADY taken care of...

According to Ibbotson Associates, this strategy offers a 77% probability of your money lasting 30 years or more. The higher the withdrawal rate, the lower your odds. So this strategy may not work if you need more income than 4% would provide.

THE DRAWBACKS: A sizable loss early in retirement could undo you. If your portfolio loses 20% the first year, the chances of your savings lasting 30 years could drop to roughly 50%. The idea of entering retirement with that level of risk is a crap shoot destined to fail. Of course, the opposite probability is also true, and the market may lift all ships with its rising tide, leaving you late in life with a large sum of money. But what if it doesn't???

HOW TO DO IT: Allocation is key. Going 100% into bonds might protect you from a market meltdown, but such cataclysms are rare. And fixed income from bonds does not naturally keep up with inflation.
Loading up on stocks gives you a better shot at increasing your income, yet you may get mauled by a bear market. So aim for the middle ground: For someone just entering retirement, a broadly diversified fifty-fifty stock-to-bond blend is a reasonable starting point.
You also have to be flexible with withdrawals. In a declining market you may have to skip the inflation boost or scale back the amount you draw down. Of course, in a bull run you may have more than you need. Check in to AnnuityStraightTalk.com's fine selection of Retirement Income Calculators.

Finally, be strategic in the way you tap assets. Use your taxable dollars first, from investment portfolios. Only then move on to tax deferred vehicles like 401K's and IRA's. Save your tax free money in the Roth IRA for last and let the income compound without the tax man's bite. The main benefit is the magic of compound interest, building up your asses in the most efficient manner.

Strategy 2: Stocks, bonds - and an immediate annuity

YOU'RE A GREAT CANDIDATE IF ...
You need more guaranteed income than Social Security provides, and you don't have a large (or any) pension. Or you'd like to avoid subjecting all your savings to market volatility. immediate annuity, immediate annuities pros and cons