Turning Savings Into a Paycheck
Accumulating money for retirement is one problem. Spending it for 25–30 years without running out is a completely different problem — and it’s the one most people haven’t planned for. Retirement income planning is about turning your savings, Social Security, and any pensions into a reliable, tax-aware monthly paycheck that lasts as long as you do.
The Three Risks You’re Managing
- Longevity risk. A 65-year-old couple today has a better-than-even chance of at least one spouse living past 90. Your plan needs to work for 30+ years, not 15.
- Sequence-of-returns risk. A bad market in your first few retirement years is far more damaging than the same losses 15 years in. Where you pull income from matters.
- Inflation risk. Even at 3% inflation, costs double roughly every 24 years. A fixed income stream shrinks in real terms if it doesn’t grow.
Building Your Income Floor
Most retirees sleep better when essential expenses (housing, food, utilities, healthcare, insurance) are covered by guaranteed income — Social Security, any pensions, and optionally an annuity. Discretionary spending (travel, gifts, hobbies) then comes from your investment portfolio, where short-term market swings matter less.
Annuities — When They Fit
Annuities are not one thing; they’re a category. The right question isn’t “annuity or no annuity” but which type, how much, and for what purpose.
- SPIA (Single Premium Immediate Annuity): trade a lump sum today for a guaranteed lifetime paycheck starting now. Simple, transparent, highest income per dollar.
- Deferred Income Annuity (DIA / longevity annuity): buy today, start payments at age 80–85. Cheap way to cover the “will I run out?” years.
- Fixed Indexed Annuity (FIA) with income rider: principal protection with market-linked growth and a guaranteed future income stream. Flexible but fees and crediting rules vary widely — read the illustration carefully.
- Multi-Year Guaranteed Annuity (MYGA): CD-like. Fixed rate for 3–10 years. Useful for money you don’t need right now but want to keep safe and growing.
Tax-Aware Withdrawal Order
The order you tap accounts can change how long your money lasts by 5+ years. General framework:
- Delay Social Security if you can — benefits grow 8% per year from Full Retirement Age to 70.
- Fill low tax brackets with Traditional IRA withdrawals or Roth conversions in your 60s — before RMDs and Medicare IRMAA thresholds kick in.
- Use taxable accounts for bridge income (long-term gains taxed favorably).
- Let Roth accounts grow last — they’re tax-free and have no RMDs.
What Dave Does (and Doesn’t) Do
Dave is licensed to help you with the insurance-based pieces of a retirement income plan — annuities, life insurance, and long-term care solutions. For investment management and tax planning, Dave works alongside your CPA and advisor so the whole picture is coordinated. If you don’t have those professionals, he can introduce you to local ones he trusts.
Let’s map your retirement income
A free 30-minute conversation. Bring your statements — leave with a clearer plan.
