First, you need to figure out what your monthly spending needs are likely to be, they include essential spending (e.g. housing, utilities, groceries, insurance, etc.) and discretionary spending (e.g. vacation, restaurant meals, etc.).
Next, you should subtract from that amount the total amount of relatively steady and reliable incomes you are getting from social security, pension, annuities, CD, and US treasuries.
Finally, the amount left is the monthly income you will need to get from the retirement income funds. If this amount is more than 4% of your portfolio to be put into the retirement income fund, you might need to cut back your spending, because as a rule of thumb, 4% is the maximum sustainable annual drawdown from a diversified portfolio of stocks and bonds for a nest egg to have a high probability of lasting 30 days.
In our next blog post, we will show you a few retirement income funds from Vanguard and Charles Schwab.