As you transition from saving for retirement to living in it, one of the biggest questions becomes how to generate income that supports your lifestyle without draining your savings too quickly. A stable retirement income strategy can help you stay on track—balancing your spending needs with long-term sustainability. While every plan looks different, creating a thoughtful income strategy allows you to navigate retirement with clarity and intention.
Understand Where Your Income Comes From
Your retirement income may come from several sources, such as:
- Social Security
- Pension payments
- Required Minimum Distributions (RMDs)
- Investment withdrawals
- Health Savings Accounts (HSAs)
- Rental income or part-time work
Each source may have different tax implications, timing rules, and levels of predictability. Mapping out where your income will come from—and when—provides a strong foundation for consistent and manageable cash flow.
A fiduciary advisor can help evaluate how to use these sources in a way that supports your needs while helping you remain tax-conscious over time.
Align Spending With Your Lifestyle and Priorities
Many people underestimate or overestimate how much they’ll spend in retirement. A helpful first step is to review your monthly and annual expenses to understand your baseline needs. This includes:
- Essential costs: housing, utilities, food, transportation, insurance, healthcare
- Lifestyle spending: travel, hobbies, entertainment, charitable giving
- Unexpected needs: home repairs, family support, medical care
Your stable retirement income strategy should align with these categories, helping you feel confident in meeting daily needs while leaving room for the lifestyle you want to enjoy.
Choose a Withdrawal Strategy That Works for You
There’s no universal formula for withdrawals, but several common strategies can guide your decision-making:
- Systematic withdrawal approach: Taking a consistent percentage of your portfolio each year, adjusting for inflation and market performance.
- Bucket strategy: Dividing your assets into short-, medium-, and long-term buckets based on when you’ll need the funds.
- Spending floors and ceilings: Setting a minimum and maximum spending range that can flex with market changes.
The goal isn’t perfection—it’s adaptability. A good withdrawal strategy accounts for variability while helping you avoid overspending in strong markets or underspending out of fear during down years.
Manage Taxes Thoughtfully
Taxes don’t disappear in retirement—they just look different. Your income sources may be taxed at different rates depending on how and when you access them.
For example, withdrawals from a traditional IRA or 401(k) are taxable, while Roth IRA withdrawals are generally tax-free after age and time requirements are met. Timing matters, too. Taking large withdrawals in a single year can bump you into a higher tax bracket, potentially reducing the longevity of your savings.
A tax-conscious income strategy can help you structure withdrawals in a way that aligns with your broader financial plan and supports more consistent spending.
Keep an Eye on Inflation and Healthcare Costs
Even with a strong strategy, retirement planning must account for changes in the cost of living. Inflation affects everyday purchases, while healthcare costs often rise as you age. Considering these variables helps you preserve your purchasing power and avoid financial surprises.
This may involve keeping a portion of your portfolio in growth-oriented investments, even in retirement, or reviewing your Medicare choices and long-term care options with your advisor.
Planning for the expected and preparing for the uncertain both contribute to a more stable financial life.
Avoid the Common Trap of Underspending
While overspending can pose a clear risk, many retirees find themselves being overly cautious—even when they have enough resources to support their goals.
Fear of running out of money can lead to missed experiences, delayed plans, or unnecessary stress. That’s why a stable retirement income strategy isn’t just about limiting spending—it’s about finding balance. A clear, personalized plan can help you make decisions that reflect your values while helping you stay financially responsible.
Revisit Your Plan Regularly
Your retirement isn’t static, and your income plan shouldn’t be either. Changes in the market, personal life, or health status can shift your needs. Set regular times to review your spending, income sources, and strategy with your advisor to make adjustments as needed.
Rebalancing your portfolio, updating your tax approach, or shifting how you draw income can keep your plan aligned with your goals.
Find Stability Through Personal Planning
No one can predict the future, but you can build a retirement strategy that supports the lifestyle you want while helping you avoid overspending. A stable retirement income strategy combines thoughtful planning, adaptable withdrawals, and a clear understanding of your financial picture. While a stable income strategy can help support your lifestyle, it is important to remember that all investments involve risk, including potential loss of principal.
At BA Schrock, we help clients develop income strategies rooted in their goals, values, and lifestyle priorities. Whether you’re newly retired or refining your plan, our fiduciary team is here to provide guidance that fits your life.
Let’s talk about how to create a retirement income plan that supports what matters to you. Schedule your introduction call today.
