Inventory Income Sources
2-4 hoursList all retirement income sources: Social Security, pensions, 401(k)/IRA, annuities, rental income, and part-time work.
Advanced1-2 weeks
Retirement Income Planning Guide
Retirement income planning guide for withdrawal rates, Social Security timing, pension decisions, annuity evaluation, and tax-efficient drawdown order.
near-retireesrecent retireesretirement planners within 5 years of retirement
Workflow
Estimate Retirement Expenses
2-3 hoursProject monthly and annual spending in retirement including healthcare, travel, housing, and inflation adjustments.
Design Withdrawal Strategy
4-8 hoursPlan the order and amount of withdrawals from each account type to minimize taxes and maximize portfolio longevity.
Optimize Tax Strategy
2-4 hoursPlan Roth conversions in low-income years, manage capital gains harvesting, and coordinate RMDs with Social Security timing.
Implement and Monitor
OngoingSet up systematic withdrawals, establish annual review process, and adjust for market conditions and life changes.
Tools Used
- Retirement CalculatorPrimaryReference
Inventory and project all retirement income sources. · Model withdrawal rates and portfolio longevity. · Annual plan review and withdrawal adjustment.
- Social Security CalculatorPrimary
Estimate Social Security income at chosen claiming age.
- Budget CalculatorPrimary
Estimate monthly and annual retirement spending needs.
- Inflation CalculatorSupporting
Adjust expense projections for 20-30 year inflation.
- Financial Independence CalculatorSupporting
Stress-test withdrawal strategy against market scenarios.
- Tax CalculatorPrimary
Optimize withdrawal order for minimum lifetime taxes.
- Capital Gains CalculatorSupporting
Plan capital gains harvesting in taxable accounts.
Checklist
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Assessment
Planning
Strategy
Taxes
Monitoring
Reference Materials
Retirement Income Sources PriorityTable
Recommended order for drawing retirement income to maximize longevity and minimize taxes.
| Priority | Source | Tax Treatment | Notes |
|---|---|---|---|
| 1 | Pension/Social Security | Partially taxable | Stable base income |
| 2 | Taxable brokerage | LTCG rates (0-20%) | Step-up basis at death |
| 3 | Traditional IRA/401(k) | Ordinary income | RMDs at 73 |
| 4 | Roth IRA | Tax-free | Preserve for last/heirs |
| 5 | HSA | Tax-free (medical) | Receipt hoarding strategy |
Healthcare Cost in RetirementStandard
Fidelity estimates $315,000 per couple for lifetime healthcare in retirement (2024). Medicare covers ~60% — supplemental (Medigap) and Part D add $200-$500/month.
Delay SS, Spend IRA
Drawing from IRA/401(k) while delaying Social Security to 70 reduces RMDs later and maximizes inflation-protected lifetime income.
Healthcare Is Not Optional
Medicare does not cover everything — budget $500-$800/month for Medigap + Part D + out-of-pocket even with good health.
Roth Conversions in Gap Years
Convert IRA to Roth in years between retirement and Social Security/RMDs when income is low — pay taxes at 12% instead of 24%+ later.
Flexible Spending Saves Portfolios
Cutting discretionary spending 10-20% during market downturns dramatically extends portfolio life — build flexibility into your budget.
Safety Notes
- Avoid annuities with high surrender charges and complex riders — simple immediate annuities or low-cost index fund withdrawals serve most retirees better.
- Required Minimum Distributions are mandatory at 73 — failing to take them triggers a 25% penalty. Plan withdrawals before RMD age to manage tax impact.