How to Create a Retirement Income Plan You Can Count On

You’ve been putting money away for decades. Your 401(k) statement shows a respectable number. Social Security sends you those annual estimates. But lately, you’re lying awake at 3 AM wondering: Will this actually work when I need it to?

The hardest part about retirement planning isn’t saving money—you’ve probably figured that out. The real challenge is making that money work like the steady paycheck you’re used to, especially when the stock market decides to tank right after you retire, or when healthcare costs start climbing faster than you expected.

Most people get stuck on the wrong question. Instead of asking, “How much do I need to retire?” ask yourself, “How do I turn what I have into income I can depend on?” Your electric bill doesn’t care about your account balance. You pay it with cash flow.

Step 1 – Know Your Baseline

Start with your fixed monthly expenses—housing, healthcare premiums, food, insurance, transportation. These are your essentials. Then layer in the discretionary spending: travel, hobbies, grandkids. Knowing what your life actually costs gives you the first target for your income plan.

TIP: Break expenses into “needs” and “wants.” Your income plan should cover the “needs” first with as much reliability as possible.

Step 2 – Match Income Sources to Expenses

Think about what income sources you can count on. Social Security, a pension if you have one, and possibly an annuity—these are the foundation of steady cash flow.

If there’s a gap between your expenses and these guaranteed sources, that’s where your investments come in. But don’t just sell off assets randomly to make it work. This is where smart strategy matters most.

Step 3 – Layer Your Strategy

Structure your income into “buckets” based on timeframes. Divide your savings into short-term, mid-term, and long-term segments.

• Short-term (0–3 years): Cash, CDs, or conservative sources. This covers your near-term spending and buffers against market swings.
  
• Mid-term (3–10 years): Balanced investments or income-producing assets. These refill your short-term bucket over time.
  
• Long-term (10+ years): Growth-oriented investments. These help you stay ahead of inflation and sustain income in later years.
  

This structure lets you ride out market downturns without having to pull from long-term investments during a bad year. When markets crashed in early 2022, retirees with properly structured buckets could let their long-term assets recover while living off their short-term reserves.

Step 4 – Plan for Taxes

Taxes can quietly chip away at your retirement income. How you withdraw from IRAs, Roths, brokerage accounts, and pensions makes a big difference. A good income plan includes smart tax sequencing—so you’re not paying more than necessary.

Many retirees can lower their lifetime tax bill by planning withdrawals proactively, not just reacting to RMDs at age 73. If you’re pulling everything from your traditional IRA, you could unintentionally push yourself into a higher tax bracket.

Step 5 – Don’t Forget Longevity and Healthcare

We all want a long, healthy retirement—but wanting won’t pay the bills. Your income plan should also prepare for rising healthcare costs and possible long-term care needs.

This might mean looking at long-term care insurance, health savings accounts, or setting aside part of your portfolio for future medical expenses. Many retirees face situations where one spouse needs extended care—suddenly the household expenses double while the income stays the same. Planning for that possibility now beats scrambling later.

Step 6 – Revisit and Adjust

Life changes—and your income plan should adapt along the way. Whether you downsize, face a health challenge, or decide to splurge on travel, your strategy needs room to breathe and adjust.

An income plan isn’t a one-time decision. Your retirement will keep changing, and your financial strategy should change with it.

Retirement should feel like freedom, not financial juggling. You’ve worked too hard and saved too long to spend these years wondering whether your money will last.

If your current plan feels more like guesswork than guidance—or if you don’t have one yet—let’s change that.

Call Barb Swiatek at 719.597.2179 to build a plan that gives you the clarity and confidence to enjoy retirement—like income you can count on.