Income Planning
In short
You spent thirty or forty years putting money in. Living off it takes a different set of decisions: which account pays you, and in which year.
Retirement income planning turns your savings into a paycheck that has to last. It sets how much comes from each account and in what order, since each is taxed differently and some eventually require withdrawals, and it decides in advance what happens in a bad market year.
Where your income will come from
The first step is to put every source of retirement income on one page, with a monthly figure and a start year beside each. That page shows which years are covered and which have a gap, something a statement balance cannot show.
Social Security, starting in a year you choose
A 401(k), a 403(b) or a pension
Traditional and Roth IRAs
Savings and taxable investment accounts
Other income, such as rent or part-time work
When to claim Social Security
You can claim as early as 62. The Social Security Administration reduces the monthly benefit for each month you claim before your full retirement age, which depends on the year you were born. It increases the benefit for each month you wait past that age, up to 70.
There is no answer that is right for everyone. Claiming early means a smaller check for longer; waiting means a larger one, and more years living on savings first. Part of the benefit may also be taxable, depending on your other income.
Which account to draw from first
The same withdrawal can cost a different amount of tax depending on the account. Money from a tax-deferred account counts as taxable income; a qualified Roth distribution does not.
Tax-deferred accounts also require minimum distributions once you reach the age set by federal law, which the IRS publishes. A large withdrawal can raise your Medicare premium two years later, since higher-income premiums are set from your tax return. We plan the order with both in view.
When the market falls after you retire
While you were saving, a falling market bought you more shares. Once you are withdrawing, selling in a down year removes shares that are not there to recover. That is sequence of returns risk.
There is no way to remove that risk. A plan can reduce how much of your income depends on selling at a bad moment, by holding enough in stable assets for near-term income and deciding in advance what you would delay. Money held for stability is not invested for growth, so we weigh that cost with you, and we review the plan whenever your life changes.
Who this is for
You retire in the next few years and have never seen your savings as a monthly income.
Your money sits in a 401(k), an IRA and a brokerage account, and nobody has told you which to spend first.
You have had a planner or a broker, but nobody built you a plan and put it to work.
You are deciding when to claim Social Security and want the trade-off clear before you file.
Worth thinking about
If you stopped working next year, which account would pay your first month?
What would your Social Security benefit be at 62, at full retirement age and at 70?
Which of your accounts are tax-deferred, which are taxable, and which are Roth?
What would you delay if the market fell in your first year of retirement?
When did anyone last change your plan because your life changed?
Common questions
How much can I safely spend each year?
There is no single figure that is right for everyone, and any number offered before someone has seen your accounts is a guess. We build it from your own spending, your income sources and how long the money has to last.
When should I claim Social Security?
It depends on your health, your work, your other income and a spouse’s benefit. Waiting raises the monthly amount up to 70, but the years you wait have to be funded from somewhere, so decide it alongside your withdrawal plan.
Do I have to take money out of my IRA if I don’t need it?
From a traditional IRA or workplace plan, eventually yes. The IRS requires minimum distributions once you reach the age set by federal law, whether or not you need the income, and they count as taxable income. Roth IRAs are exempt while the owner is alive.
Does a bad market year early in retirement matter that much?
More than the same year would have while you were saving. Shares sold at a low price are not there to recover, so the order of returns affects how long a portfolio lasts. No plan can prevent a bad year; a plan can decide in advance which account you would draw from.
I already have an advisor. What would be different here?
Often what is missing is a written plan that is put to work: one page showing where your income comes from, and in what order. We start with education, and if the plan you have is working, we will tell you so.
Sources
- Benefits Planner: Retirement Age and Benefit Reduction, U.S. Social Security Administration
- Planning your Social Security claiming age, Consumer Financial Protection Bureau
- Social Security income, frequently asked questions, Internal Revenue Service
- Retirement plan and IRA required minimum distributions FAQs, Internal Revenue Service
- Medicare costs, Medicare.gov
- Beginners’ Guide to Asset Allocation, Diversification, and Rebalancing, U.S. Securities and Exchange Commission, Investor.gov
These public resources support the general educational context on this page. They are not endorsements of Oliver Wealth Management, and none of the material here is personalized investment, tax, or legal advice.
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