Having a reliable source of income cultivates confidence in one's ability to face retirement. The aim of building one's retirement plan on cash, income, and long-term retirement is threefold. One, it keeps one liquid. Two, it helps create a sense of calm during downturns. Finally, it allows one to enjoy long-term growth.

However, on average, some American households only save 75 percent of the amount they'll need for retirement, and others only save 50 percent. In addition, some retirement plans focus on wealth accumulation, which ties up cash. Therefore, individuals benefit from dependable retirement plans that cover cash, income, and long-term growth needs.

Focusing solely on accumulating wealth and neglecting income streams renders one illiquid. There are several factors to consider when investing for retirement.

Before investing, it's essential to consider how retirement income will be taxed. Some retirement plans, like Roth IRAs (individual retirement accounts), are funded with after-tax dollars. Others, such as 401(k), are funded with pre-tax money. All withdrawals for contributions made with pre-tax money are taxed. Making withdrawals as tax-efficient as possible reduces expenses.

Some investment vehicles, such as fixed annuities, pensions, and social security, provide guaranteed income. However, such income may not be enough to meet one's financial needs in retirement. The alternative is interest and dividend investing. The latter does not guarantee income, but it has unlimited upside. When selling investments for income, it's vital to consider the logistics of converting the investment into the cash required to meet income and expense needs.

Figuring out one's expenses during retirement and planning for income sources to finance them is the key to financial independence in this phase of life. For example, private equity investing has a term limit of 10 to 12 years, meaning it may take years to receive payouts.

Total return investing is one strategy to meet cash, income, and growth goals. In total return investing, the investor enjoys both income streams and growth.

Total return investing allows one to withdraw the amount they need from the best-performing asset in their portfolio. However, it can breed complacency owing to a sense of security, knowing that the money one needs is "safely" tucked away.

One may combine total return investing with the bucket strategy. The bucket strategy matches different asset types with one's income and growth needs. One invests in different vehicles grouped into buckets.

A safety bucket typically holds highly liquid assets, such as savings accounts, checking accounts, and money market funds. A money market fund is a short-term to near-term, low-risk investment.

Highly liquid investments provide income to meet short-term (one to three years) financial needs. One may put dividend-paying stocks into an income bucket and income-producing assets with long-term growth prospects, like a real estate property, into a growth bucket.

Age plays a role in one's risk appetite. Younger people typically have greater leeway to take on more risk since time is on their side. A younger, working person can lean on their salary, which helps ease the pressure, meaning they can ride market turbulence.

Without dependable income streams, people in retirement may have to sell their assets to generate income. The more one liquidates their assets, the more they will curb their investment's growth potential. It also exposes one to adverse financial challenges should they overdraw from their retirement kitty.