Planning for Retirement Income

Now that you have retired, these five steps can help you turn your retirement savings into your retirement income:

• Organize your retirement resources: Make a list of all your savings, investments, and possible income sources. For example, if you have a number of individual retirement accounts (IRAs) at multiple financial institutions, you might consider consolidating them into one IRA if it may help simplify retirement planning.
• Understand your income needs : Review your monthly spending to estimate how much income you'll need to cover basics like food and housing, along with discretionary needs like travel and entertainment. Be sure to consider increasing costs due to inflation or other possible spending changes, when figuring out how much annual income you will need.
• Manage your risk: Base your income plan on how long you can expect to live based on your current age (your longevity), not on average life expectancy. Remember to plan for potential health care expenses, since not everything is covered by Medicare. A more conservative investment plan may reduce the risk of loss of principal, but investing a portion in stocks may help provide growth to keep up with or outpace inflation. A financial advisor can provide guidance to help mitigate risks for your situation.
• Create your retirement income: Consider the effects of inflation, market volatility, and income taxes when you’re deciding how to withdraw money in retirement. Your retirement income should be large enough to help meet your expenses yet small enough so you won’t run out of money prematurely.
• Review your income plan: From watching your spending and staying within your budget, to reviewing your financial and estate planning documents, there is a lot to keep track of in retirement. Every year, and whenever you experience the unexpected, take the initiative to make necessary adjustments to your income plan. 

To help you find ways to strengthen your plan or identify gaps, give yourself a retirement income plan review to develop your retirement income strategy or prepare for a meeting with a financial advisor.