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In a time like this, creating a retirement income is a challenge, but the challenge can be met. The goal is to turn a retirement account into a payout stream that lasts a long while.

For the purposes of our model we will start with a $1 million account and target a 4% withdrawal rate, or $40,000 a year. Our recommended portfolio is conservative, but it allows a retiree to live fairly well while taking only a small risk of outliving assets.

U.S. Treasury bonds, safe against default, pay meager interest: 1.3% on those due in 20 or 25 years. Our plan calls for boosting the payout rate to 2.4% by selecting a premium bond. That is one that was issued when interest rates were higher and so has a higher coupon.

One good choice: the bond with a 3-3/8% coupon that matures in May 2044. Recent price in the secondary market: 141% of par value. We recommend that you put 25% of your savings into this. That would mean buying 177 bonds, each of $1,000 par value, for something close to $250,000.

The Treasury would pay you a bit less than $6,000 a year. Twenty-four years from now, you or your heirs would collect the par value of $177,000. At that point in life you could risk drawing down the remaining principal at a fairly high rate.

Understand what you’re getting and what you’re not getting. You’re getting a higher cash flow than would be available on a recently issued Treasury of similar maturity. You’re not getting a higher yield. Some of that $6,000 represents a return of principal, since the bonds’ value will erode over the next 24 years from $250,000 to $177,000.

The plan is to hang onto this bond until it matures, but you are not obliged to do that. Treasury bonds are highly liquid, and you can sell some or all of the position at any time. If you sell early, you might get a disappointing price (that will happen if interest rates go up). If you stay put, though, there’s no uncertainty: You’ll get precisely the 24 years of coupons and the one par value payment you expect.

You can turn cash into a fixed annuity that lasts a lifetime. We recommend a 25% allocation to this investment. The monthly payouts start either immediately or at a certain age, like 70 or 80. They end when you die.

The payout rate is very high. It will vary with your age, gender and state of residence, but 6% is a good estimate. That’s about what a 70-year-old resident of New York would get with an immediate start date.

It is important to understand why the payout is high. Most of the money coming to you ($15,000 a year in our portfolio) is a return of principal; very little of it is income in the sense of interest or profit.

How is this different from just plopping the $250,000 into a bank account and withdrawing $15,000 a year? With the annuity, you insure against the risk that you will live a long time. You can live to 99 or 109 and the money won’t stop.

The counterpart to this benefit is that if you die young, your cumulative payout will have been meager. In effect, the annuity is a mechanism for transferring money from retirees who die young to retirees who die old.

On this part of the $1 million portfolio, there’s no asset being left to children or grandchildren. This makes some people uneasy. But it’s how Social Security works.

There are variations on these fixed annuities. You can arrange for the monthly payment to last as long as either you or your spouse is alive. You can guarantee that if you die very young, your family gets a certain minimum return. Either of these enhancements, however, cuts into that monthly payout.

In our portfolio, we aim for the maximum payout by opting for a single-life contract that has no minimum payout guarantee. We assume that your spouse is able to buy a second single-life annuity from his or her own retirement assets.

Long-term corporate bonds act much like that Treasury IOU in part 1, except that they entail a bit of credit risk. They pay better, around 3%. Best way to acquire them: via a corporate bond fund.

Our model portfolio calls for a 10% allocation. Your $100,000 will generate $3,000 a year.

There’s a critical piece missing in the three fixed-income assets above: inflation protection. You can get it from equities.

Over the past century U.S. stocks have delivered a total return averaging better than 7 percentage points a year more than inflation. But with stock prices now high in relation to earnings, it’s wise to curb your expectations for future returns.

Let’s be conservative and trim the 7%-plus real return to a projection of 4%. If that’s all stocks do over the next quarter of a century, they would permit someone drawing out 4% every year to maintain the stock portfolio’s value in purchasing power. That 4% withdrawal is built into our income plan.

The average dividend yield on the U.S. stock market is only 1.6%. That’s not enough. So, collect those dividends, then supplement the income with a liquidation of 2.4% of your fund shares annually, or 0.2% a month.

Our portfolio has a 40% allocation to stocks. A 4% drawdown yields $16,000 at the start. This amount will fluctuate with the market’s performance, but it should climb, holding its own in purchasing power over a very long stretch. If stocks do better than our low-ball expectation of a 4% real return, your annual withdrawal will eventually outpace inflation, making up for the absence of inflation protection on the bonds and the fixed annuity.

You can cope with the volatility by slightly modifying your withdrawal pattern. During a stock crash, such as the one seen in March, you could liquidate less than 0.2% a month of your equity position, while maintaining your withdrawal by dipping into the corporate or Treasury bonds. When stock prices are high, you could sell a bit more than 0.2%, putting the excess back into bonds.

Let’s add up the income streams: $6,000 plus $15,000 plus $3,000 plus $16,000. That’s $40,000.

At the outset we described our model portfolio as conservative. Indeed, many experts would urge you to kick up the stock allocation to 50% or 60%. With a greater reliance on equities, you will be exposed to more uncertainty in your payout but you will have a shot at better living a decade or two into retirement. Whether you aim for 40% stocks or 60% is a function of your tolerance for uncertainty.

A final note on assembling this four-part portfolio: Young workers, who can tolerate volatility, should focus on the last and riskiest piece. That means putting most of their 401(k) contributions in a stock index fund. Older workers should direct most of their contributions into the fixed-income elements. The last piece to put in place is #2, the conversion of retirement assets into an income stream. That annuity purchase might happen as late as the day you retire.