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Tailoring a Plan for Your Retirement Income Needs

Tailoring a Plan for Your Retirement Income Needs

Having enough money for all your needs in retirement is crucial. In order to identify and avoid shortfalls, proper retirement planning is absolutely essential. Just like planning for a long vacation, planning for retirement takes time and careful consideration of where you want to go.

A good retirement income is going to be different for everyone’s specific needs. We’re going to focus on optimizing retirement income to achieve your dreams – not just how to end up with more money. We want you to be happy and fulfilled.

Sources of Retirement Income

The first thing we need to do is nail down what sources of income you’ll have. In a perfect world, there’ll be several sources of income for your retirement needs. If not, don’t worry, we can plan around any situation.

Social Security Benefits

Social Security is an important part of retirement for the majority of Americans. The best Social Security withdrawal strategy should work in concert with your other sources of income. Many retirees make the mistake of thinking about Social Security separately from their other retirement income.

It’s also a mistake to think about Social Security separately for each spouse. Having a spouse who’s also eligible for Social Security opens up some additional options for timing and optimizing your Social Security benefits. At NextGen Wealth, we recommend looking at your entire financial life to prepare your Social Security withdrawal strategy.

Do you know how far $1 million dollars will last in retirement? The answer might surprise you. Check out our infographic to learn more and see if you're on track.

Pension Plans

If your employer offers a pension, there’s several factors to consider. You’ll need to make decisions around when to retire. There’s also decisions to be made regarding whether to take a lump sum or annuity payout (monthly/annually).

Optimizing your pension often comes down to deciding whether you stay longer or retire earlier. We want you to feel empowered to make the right decision based on what makes you happy and fulfilled – not just getting an extra few percent on your pension.

Don’t get us wrong, small percentages can make a big difference over your retirement. However, we can often make some adjustments and implement other strategies to make up income shortfalls. In short, don’t feel you need to stay longer just for the money (you might not have to).

Personal Savings and Investments

If you’ve been saving and investing over your working years, you’ve hopefully got everything you need to produce a good retirement income. Whether you have a 401k, IRA, 403b, 457, or other retirement account, you now have to convert these savings into regular income to live on.

It can be a little difficult to pull money out of these accounts sometimes. You’ve been saving for so long, it’s hard to “flip the switch” and start withdrawing funds for your monthly income. Remember, these retirement funds were meant for this.

However, there’s also a way to withdraw these funds alongside other income sources to optimize for taxes. With the right planning, you can make your hard-earned retirement savings last longer.

Is $1 million enough for you to live your perfect retirement? Maybe, maybe not. Check out our infographic to learn more and see if you're on track.

Factors Influencing Retirement Income Needs

To craft a proper income plan, we’ll need to consider many other factors in your life – not just the money. Your finances are personal to you. We need to adjust accordingly.

Lifestyle Expectations

One of the biggest things we need to uncover is what you want life to look like in retirement. Are you planning to travel? What hobbies and other activities are important to you? Also, deciding how long you’ll stay in your current house or if you’ll purchase a vacation home can make a huge difference too.

Health Care Costs

The cost of medical care may be a major concern for you. Getting affordable medical insurance is a must. Also, long-term care needs are a consideration too. We never know exactly what the next decade (or year, or day) is going to look like.

This is why planning out your healthcare options and Medicare are critical. If done correctly, you’ll avoid worrying about major medical expenses. You’ll be prepared.


Inflation is a factor we can’t control. However, we can plan around it. This is why having a properly diversified portfolio continues to be important before and during retirement. Your sensitivity to inflation may change depending on how much of your income is from Social Security or a pension.

For example, if your pension and Social Security cover most of your needs, the effects of inflation may be lower. However, if your pension doesn’t adjust for inflation (like a military or government pension does), inflation may be more of a concern. However, you might be surprised at how small adjustments can compensate for inflation.

Tailoring a Plan for Your Retirement Income Needs Factors

Strategies for Enhancing Retirement Income

Once you’ve identified exactly what your income sources will be, we can piece everything together. Ideally, you’ll want to start planning several years in advance, so you have time to get everything in place. Also, you might be pleasantly surprised to find how well things come together.

Delaying Retirement

A common way to gain some additional income is to wait to retire a little later. While this can make a significant difference, there are other options too. As a matter of fact, this may not be an option if you have to retire earlier than you thought.

If you like what you’re doing, you might not need to retire just yet anyway. You can even consider some alternatives like reducing your hours or making a pivot into a similar, more flexible career path.

Maximizing Social Security Benefits

Maximizing your Social Security benefits is very important. We obviously want you to get the most money from the taxes you’ve paid over the years, but there’s other factors to consider. If you sleep better at night knowing you’ve got inflation adjusted retirement benefits coming in, “optimum” might look a little different.

Properly Diversifying and Allocating Investments

There may be other streams of income and assets you need to consider in the overall picture. Your retirement accounts need to be properly diversified and invested. You also need to zoom out and look at your whole investment portfolio – to include real estate, collectibles, etc.

For instance, if you can live off your Social Security alone, you might be able to invest more aggressively. On the other hand, if you can’t stomach watching your portfolio swing high and low in down markets, other sources of income could help smooth out the ride.

What is $1 million actually worth in retirement? Not what it used to be. Check out our infographic to learn more and see if you're on track.

Implementing Tax-Saving Strategies

The final piece to bring everything together is optimizing everything for tax savings. There are many different strategies like Roth conversions and qualified charitable deductions to consider. We don’t’ want taxes to dictate everything we’re doing though.

The idea is to solve for the life you want first, then optimize for taxes. If you decide the tax savings are worth a change to your lifestyle, you can make an adjustment. It’s your call.

Seeking Professional Advice

Seeking the advice of a financial planner does more than just help give you peace of mind. Depending on the study, individuals who work with a financial planner have better investing outcomes. Studies show outcomes are between 1.59% and 5% better with the help of a financial planner – just in the investments alone.

Even more important is knowing you’re doing the best thing for you and your family. Your retirement income plan needs to be tailored to you. That’s why we plan your finances around you – not the other way around.

We highly recommend you start planning for retirement sooner than later. We specialize in transitioning phase of retirement because it’s such a critical time. If you get the foundation of your retirement needs laid before you actually retire, things will be so much easier.

Contact NextGen Wealth today to see how we can help get your retirement income plan in place.

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About the Author

Aurtho Clint Haynes, CFPThis article was written by Clint Haynes, CFP®. Clint is a Certified Financial Planner® and Founder of NextGen Wealth. You can learn more about Clint by reading his full bio here.