Retirement should be a time to relax and enjoy the fruits of your labor—but getting there takes careful planning. One of the most important parts of preparing for this new phase of life is building a personalized retirement income plan that fits your unique lifestyle, goals, and financial situation.
At G.W. Sherwold Associates Inc., we help individuals and families feel confident about their future by guiding them through every step of the retirement income planning process. Here’s a breakdown of how you can start crafting your own customized plan.
1. Understand Your Income Sources
Your retirement income will likely come from a mix of sources. Start by identifying and estimating the value of each:
- Social Security Benefits – Review your Social Security statement to estimate how much you’ll receive and when it’s best to start taking it.
- Pensions – If you have a pension, understand your options and payout structure.
- Retirement Accounts – Include 401(k)s, IRAs, and other retirement savings. Consider how market performance and Required Minimum Distributions (RMDs) will affect your withdrawals.
- Investments and Rental Income – Income from stocks, bonds, or property can also play a role in funding your retirement.
- Part-Time Work or Hobbies – Many retirees choose to supplement their income with part-time jobs or monetized hobbies.
Knowing all your income sources helps create a solid foundation for your retirement income plan.
2. Create a Realistic Budget
Once you understand your income, the next step is building a retirement budget.
- Fixed Expenses – Include housing, insurance, healthcare, and daily living costs.
- Variable Expenses – Consider entertainment, travel, dining out, and unexpected costs.
- Inflation – Don’t forget to factor in inflation. Even a 2–3% increase annually can make a big impact over time.
Your budget should reflect both your needs and the lifestyle you envision for retirement. If your projected income doesn’t cover your desired lifestyle, this is the time to consider adjustments.
3. Develop a Withdrawal Strategy
How and when you withdraw money from your accounts is a key part of retirement income planning.
- The 4% Rule – This guideline suggests withdrawing 4% of your savings each year to help your money last through retirement. However, this rule may not fit everyone, especially in changing economic environments.
- Tax-Efficient Withdrawals – Strategically withdraw from taxable, tax-deferred, and tax-free accounts to minimize your tax liability.
- RMDs – Once you hit age 73, you’ll be required to withdraw a minimum amount from certain retirement accounts. Planning ahead can help avoid large tax hits.
Working with a financial advisor, like the team at G.W. Sherwold Associates Inc., ensures that your withdrawal strategy aligns with your goals and maximizes your retirement income.
Personalized Retirement Income Planning with G.W. Sherwold Associates Inc.
There’s no one-size-fits-all approach to retirement income planning. Your plan should be as unique as you are. Whether you're five years away from retirement or already enjoying your golden years, our experienced advisors can help you create, update, and fine-tune a strategy that supports your financial independence.
Ready to build your personalized retirement income plan? Contact G.W. Sherwold Associates Inc. today to schedule a consultation and take the next step toward your secure retirement.