One of the biggest questions people have as they approach retirement is simple but important: How do I make sure my money lasts? You’ve worked hard to build savings and investments, but retirement isn’t just about what you’ve accumulated; it’s about how you use it to create a dependable, lifelong income. Here are a few strategies to consider so that you can create a reliable paycheck for your retirement years.
Know What You’ll Need Each Month
The first step is understanding what your ideal retirement “paycheck” looks like. Take time to think through what you’ll spend on essentials like housing, food, healthcare, and insurance. Plus, don’t forget the fun things, too, like travel, hobbies, or treating the grandkids! Once you’ve added up your expenses, build in some cushion for inflation and unexpected costs. Knowing how much you need each month helps you plan your investments with a clear goal in mind.
Organize Your Savings by Time Frame
One strategy many retirees find helpful is to organize their savings into “buckets” based on when they’ll need the money.
- Bucket #1: Think of the first bucket as your short-term safety net. This might be cash or conservative investments that can easily be turned into income for the next few years. It gives you stability and helps you avoid selling long-term investments when markets are down.
- Bucket #2: The second bucket is your mid-range income, which can include investments that can generate steady returns over the next five to ten years, such as bonds or dividend-paying stocks.
- Bucket #3: And finally, the long-term bucket is designed for growth. These assets help you stay ahead of inflation and ensure your money keeps working for you well into your later years.
Add Stability with Guaranteed Income
For many people, part of the solution comes from guaranteed income sources like pensions, Social Security, or annuities. These create a foundation of income that arrives no matter what happens in the market. Some retirees use this approach to cover their monthly expenses while letting the rest of their portfolio grow for discretionary spending or emergencies. Having guaranteed income in place can make it much easier to stay calm during market downturns because you know your essential expenses are covered.
Be Strategic About Withdrawals
Another key to long-term success is how you draw money from your accounts. A thoughtful withdrawal strategy can help your savings last much longer. Many retirees start by using cash or conservative assets first, allowing their growth investments more time to recover and compound. Others coordinate their withdrawals with the timing of annuity payments or Social Security benefits. The right approach will depend on your personal situation, but the goal is always the same: to stretch your money while keeping your income steady.
Keep an Eye on Taxes and Inflation
Even the best income plan can lose ground if you don’t factor in taxes and inflation. How and when you withdraw money from your accounts can have a big impact on how much you actually get to keep. Inflation is another quiet threat. Over a 20- or 30-year retirement, the cost of living can rise significantly. To protect your purchasing power, your plan should include some investments with growth potential, such as stocks or real assets.
Review, Adjust, and Stay the Course
A good retirement income plan isn’t something you set and forget. Life changes, markets fluctuate, and new opportunities arise. Regular check-ins can help you stay on track and make small adjustments before small issues become big ones. Equally important is staying disciplined. When markets dip, it’s easy to feel anxious and make emotional decisions, but that’s when a well-designed plan and a trusted advisor can make all the difference.
At Retire Wise, we believe the right retirement income plan should feel like getting a steady paycheck again, and one created with the rest of your life in mind. With some thoughtful planning, you can design an income strategy that helps give you freedom, confidence, and clarity.
*Investment advisory products and services made available through AE Wealth Management, LLC (AEWM), a Registered Investment Adviser. Insurance products are offered through the insurance business Retire Wise, LLC. Retire Wise, LLC is also an Investment Advisory practice that offers products and services through AE Wealth Management, LLC (AEWM), a Registered Investment Adviser. AEWM does not offer insurance products. The insurance products offered by Retire Wise, LLC are not subject to Investment Adviser requirements. Guarantees and protections provided by insurance products, including annuities, are backed by the financial strength and claims-paying ability of the issuing insurance carrier. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. 3565532 – 12/25
