Learn how to help your retirement savings last with strategies for withdrawals, investments, Social Security, and healthcare planning from EP Wealth.
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.
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.
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.
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:
Coordinating Social Security with other income sources may help retirees enhance cash flow and preserve other assets over time.
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.
Inflation and market fluctuations can reduce purchasing power and impact the sustainability of retirement savings.
Some ways to address these risks include:
By applying these strategies, retirees may be better equipped to navigate economic shifts and maintain financial stability.
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.
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.
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.
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