The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

Let’s blow up the New Year’s financial resolution delusion. Instead, set a life-changing plan.

Rather than saving money for “retirement,” aim to generate a specific future monthly income that can be a springboard for how you really want to spend your time.

Here’s how to realistically plan for and generate a lifetime income.

Remember the 2 main ways of generating lifetime income

For reasons we’ll discuss in a moment, we’re considering the two primary ways of generating long-term cash flow: spending savings or buying an income stream.

Spend to the end

Your nest egg is a long-term savings stash you’ve diligently amassed over time. It’s a 401(k), individual retirement account, investment account or cache of cash hidden in the basement. And it’s a liquid asset, meaning you can spend it — it’s not real estate or metaverse property.

That sum needs to be spent over time so that it lasts as long as you do, so it’s likely invested in a diversified portfolio. A formula called the 4% rule comes into play here. It’s a basic guideline that says you can spend 4% of an invested portfolio each year, adjusted annually for inflation. Average investment returns are expected to help offset withdrawals over time, extending the shelf life of your money.

To see what a lump sum will provide as a monthly income, use NerdWallet’s How Long Will My Savings Last? calculator to run the numbers for you.

Buy an income stream

Investing a lump sum in an annuity will also provide a lifetime income stream. Sales of annuities have been setting records in recent months, according to the Life Insurance Marketing and Research Association.

As with many insurance products, annuities can take time to understand. You’ll want to:

  • Thoroughly understand the upfront and ongoing costs, fees and surrender charges.
  • Know the benefits you’ll receive and how long they will continue.
  • Ask what the credit rating is for the issuing insurance company. The more A’s in the rating, the better (AAA, AA+, etc.).
  • Understand how a rising or falling stock market will affect the value of the annuity, if at all.

When considering an annuity, the insurance company will show you several “illustrations” outlining “likely performance” over time. Use this Department of Labor lifetime income calculator as a reality check.

Finally, there is growing interest in allowing employers to add pension-style payout options to 401(k) retirement plans. If the built-in annuity has low fees and good benefits, it could be a game-changer for the retirement security of the younger workforce.

Don’t count on the rest

There are other ways you might generate a rest-of-your-lifetime income stream that we’re not considering here: a viral TikTok or YouTube channel, Social Security. Oh, and winning the lottery. Let’s just say most of us shouldn’t count on these. Sure, that hilarious lip-sync might spin up a buzz on social media for a while — but income to last the rest of your life? Uh, no.

Let’s not even talk about Social Security right now. We’re still waiting on the government to figure out student loan forgiveness.

And what about all of those “I make $40,000 a month and work just two hours a day” passive income schemes you see daily in your news feed? Bookmark that story and check out their website in a couple of years. It will probably show a “this domain is for sale” notice. Selling online courses and how-to videos is a fast-churn proposition.

Stick with the conventional methods of generating extended income, and if kismet strikes, consider it gravy.

Google pays for tracking our every move

First, it’s clear our phones are listening to us. I mean, how can they show us an ad for something we were just talking about in the kitchen over a glass of wine? And now we know Big Data is following us, too. Even when they’re not supposed to.

Google will shell out nearly $400 million to 40 states in a settlement over consumer privacy. A collection of state attorneys general said Google continued to track the movement and location of users even when consumers thought they had turned off location-tracking features in their device settings. That info was shared with advertisers — and it has been going on since “at least 2014,” the attorneys general said.

In addition to the monetary settlement, Google must provide more disclosures to users about its tracking methods.

Crypto isn’t broken, but how we use it is

In our knee-jerk world, many people are quick to jump to conclusions. With the latest cryptocurrency failures, there are those who are proclaiming Bitcoin and its digital brethren aren’t long for this world.

It’s not a crypto issue.

Investment fraud has plundered many portfolios. Madoff, Ebbers, Lay & Skilling and, yes, the namesake for pyramid schemes, Mr. Ponzi himself, ravaged the riches of trusting clients. If all of your eggs are in one basket and someone steals that basket …

The biggest crypto risk is mixing a DeFi technology with a centralized platform. If you trade and store your crypto only in an unregulated exchange rather than combined with — or exclusively in — a crypto wallet you control, you will always live at the mercy of the unscrupulous.