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Learn how to help your retirement savings last with strategies for withdrawals, investments, Social Security, and healthcare planning from EP Wealth.
Plan for Making Your Retirement Savings Last for a Lifetime
Without a flexible plan, retirees may risk drawing down their assets too quickly. Important considerations include withdrawal rates, asset allocation, Social Security timing, healthcare expenses, estate planning, and market risk. A comprehensive retirement income strategy can help align near-term income needs with long-term financial objectives.
Developing a Sustainable Withdrawal Strategy
When planning a withdrawal strategy, keep in mind the goal of extending the longevity of your retirement savings. One commonly referenced guideline is the 4% rule, which suggests withdrawing 4% of savings annually, adjusted for inflation. However, this rule may not suit everyone and often requires adjustment based on market performance, lifestyle goals, and individual life expectancy.
Different withdrawal methods offer varying levels of flexibility:
Structuring withdrawals in a tax-efficient order—starting with taxable accounts before tapping tax-deferred or Roth accounts—can also help manage tax liabilities and extend the lifespan of your savings.
Investment Considerations for Retirement
As retirees shift from wealth accumulation to income generation, investment strategies should reflect new priorities. An appropriate asset mix can help balance income generation with long-term portfolio sustainability.
Diversification across asset classes can help manage volatility. Income-producing assets—such as dividend-paying stocks, bonds, and certain annuities—may provide ongoing cash flow. While maintaining some exposure to equities may help offset inflation, risk management becomes increasingly important to help mitigate losses during market downturns.
Maximizing Social Security Benefits
Social Security remains a foundational income source for many retirees, and the timing of when to begin benefits can significantly influence long-term outcomes.
Here are a few factors to weigh:
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Coordinating Social Security with other income sources may help retirees enhance cash flow and preserve other assets over time.
Planning for Healthcare and Long-Term Care Costs
Healthcare is often one of the most significant retirement expenses. Planning ahead can support better financial preparedness.
Understanding Medicare—including Parts A, B, and D—and determining whether to add a Medigap or Medicare Advantage plan can help manage ongoing medical costs. Budgeting for out-of-pocket expenses such as dental, vision, and prescription drugs is also essential.
Long-term care planning may involve evaluating options like traditional long-term care insurance, hybrid life/long-term care policies, or self-funding approaches. These strategies can help prepare for the possibility of needing assisted living or nursing care.
Managing Inflation and Market Risk
Inflation and market fluctuations can reduce purchasing power and impact the sustainability of retirement savings.
Some ways to address these risks include:
- Inflation Protection: Considering assets such as Treasury Inflation-Protected Securities (TIPS) or annuities with inflation-linked features.
- Market Risk Management: Maintaining a diversified portfolio and adjusting risk exposure as retirement progresses.
- Spending Flexibility: Scaling back discretionary spending during market downturns may help preserve core assets.
By applying these strategies, retirees may be better equipped to navigate economic shifts and maintain financial stability.
Preparing for Unexpected Expenses
Even with a well-structured retirement plan, unforeseen expenses can arise. Building a cash reserve allows retirees to cover emergencies without disrupting long-term investment strategies.
Comprehensive insurance coverage—including health, life, and disability insurance—can help mitigate major financial disruptions. It’s also helpful to develop a support system of family or professionals for assistance during emergencies.
Healthcare directives can communicate your preferences in medical situations where you are unable to advocate for yourself. Naming a power of attorney allows a trusted individual to act on your behalf for legal and financial matters.
Periodically reviewing and updating your estate plan, including wills or trusts, may help reduce confusion and promote clarity for your heirs.
The Importance of Regular Financial Reviews
A retirement strategy shouldn’t remain static. Life changes, market performance, and new opportunities often warrant regular reassessment.
Consistent portfolio rebalancing helps align asset allocation with evolving risk tolerance and income needs. Adjusting withdrawal strategies based on performance, projected expenses, and life expectancy may also support long-term sustainability.
Staying proactive with financial reviews can help retirees align with their goals, even as they shift over time.
Find an EP Wealth Advisor Near You
Retirement planning is an ongoing process. By considering withdrawal strategies, investment allocations, healthcare costs, and potential risks, retirees can take meaningful steps to help their savings last.
EP Wealth Advisors can help you explore strategies tailored to your goals, timeline, and unique financial picture. Connect with an advisor to start planning with confidence.
DISCLOSURES:
- EP Wealth Advisors, LLC. is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability.
- Request an appointment with an EP Wealth Advisor when you have a minimum of $500,000 in investable assets – which includes qualified retirement plans (IRA, Roth IRA, 401(k), taxable brokerage, cash (savings / checking) and CDs. Investable assets do not include your home, vehicles, or collectibles.
- The need for an advisor or financial planner and/or the type of services required are specific to the uniqueness of each individual’s circumstances. There is no guarantee or warrantee that the services offered by EP Wealth Advisors, LLC will satisfy your specific financial services requirements. Services offered by other advisors may align more to your specific needs.
- Information presented is general in nature and should not be viewed as a comprehensive analysis of the topics discussed. It is intended to serve as a tool containing general information that should assist you in the development of subsequent discussions. Content does not involve the rendering of personalized investment advice nor is it intended to supplement professional individualized advice.
- All investment strategies have the potential for profit or loss. Different types of investments and investment strategies involve varying degrees of risk, and there can be no assurance that any specific investment strategy will be suitable or profitable for a client’s portfolio. The risk of loss can never be eliminated even if working with a professional.
- An estate plan is a helpful tool that can assist individuals in managing and arranging affairs in the event of death or incapacity. However, the scope and extent of the plan varies depending on the unique circumstances and desires of the individual client. It is for this reason, that the analysis encompassed herein is not intended to be comprehensive in nature nor should it be interpreted as legal advice. Please consult a legal professional to determine the extent, scope, and the drafting and creation of the appropriate estate documents. EP Wealth Advisors is not in the business of providing legal advice or preparing legal documents. Our review is limited to and in association with Financial Planning only.
- Laws vary by state. The information presented herein is intended to be general in nature and may not apply to your state of domicile. Please consult local legal counsel to determine the best practices for your state.
- Please consult with a CPA, tax professional, and/or attorney regarding your specific situation before implementing any of the strategies referenced directly or indirectly herein.
- There is no guarantee or warrantee that a client or prospective client that engages EP Wealth Advisors, LLC in Estate planning services will experience investment success and does not ensure that a client or prospective client will experience a higher level of performance or results. No guaranty or warranty is made that any direct or implied service, offering, report, or analysis represented here will be offered or delivered. The services offered to clients will vary and depend on several factors.
