Retirement Success Isn't About Net Worth, It's About Net Income
If you're wondering if you have enough saved to retire, you won't find the answer to that critical question on the bottom of your 401(k) statement.


This isn’t your grandparents’ retirement.
America’s move from pensions to 401(k)s and IRAs has changed the way most workers think about their retirement money — and not for the better.
Traditional pensions were designed to provide participants with guaranteed income — and the people who have them typically think of their benefits in those terms. They know what their monthly pension check will be in retirement, or what percentage of their old salary it will provide. It’s something they can count on and plan around.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Many savers flying blind
Ask pre-retirees about their IRA or 401(k), and they’ll probably tell you the amount on their last statement … if they opened it. As for what that number will translate to in retirement, they likely have no idea. And no plan.
That means many people who have spent their entire adult lives relying on a regular paycheck — knowing exactly how much it will be and exactly when it will go into the bank — are rushing toward retirement with no real strategy for how they’re going to replace that check when they leave their jobs.
A 401(k)’s focus is on accumulation, and from my experience savers, plan administrators and many financial professionals tend to frame things only in those terms. They talk about growth, asset allocation, risk and return, instead of how that money is going to serve as future income.
A plan for ‘permanent unemployment’
Accumulation is important when you’re young and trying to save as much as you can. But in retirement, that number at the bottom of your statement — whether it’s $500,000, $1 million or more — is mostly irrelevant … unless you know how you’re going to use it. What you really need is a dependable distribution plan that will ensure you can maintain the lifestyle you want for as long as you live.
I often tell people to think of retirement as “permanent unemployment” to push the point that they must make sure there’s always money coming in. Our firm has a process (we call it the “Retirement Fingerprint”) that solves that puzzle first, looking at all the possible income streams you might have to depend on and how to make the most of each:
- Social Security – Just about everyone collects Social Security, but there are many ways to maximize those benefits, depending on your individual needs.
- Pension – If you’re fortunate enough to have a pension, you likely have several options to consider before your retirement date, including a possible lump sum payout and survivor benefits.
- Investment savings – Most couples have at least one 401(k) or 403(b) account. Your plan should look at tax consequences, inflation and volatility in an effort to preserve those hard-earned dollars.
- Other investments – If you have real estate or other investments, even alternative solutions like annuities — they can play a critical part in your plan, by offering diversity and further income potential.
The goal should be to provide what we call “mailbox money” — reliable income that’s coming in every month. The happiest, most contented retirees I know are the ones who have that figured out.
A solid plan for an eventful life
I understand the fascination with growth, especially given that so many retirees say they are worried about outliving their money. They just want to be sure they have enough.
But without a plan, how will they know what enough is?
I’ve never seen a person in retirement go out and spend all his or her money in one day or one year. What really happens is that you withdraw more than you should early in retirement, or a market downturn leaves you shorter on funds than you thought you’d be, or an unexpected health problem uses up your savings, and you start compromising your lifestyle. You stop doing the things you wanted to do, or you can’t live where you want to live. And your life gets less eventful, year after year after year.
But if you have a solid plan, with reliable sources of income and a pecking order for where the money will come from, your basic lifestyle won’t be as vulnerable.
If you haven’t already, talk to an adviser — one who specializes in retirement — about putting together an income plan. Don’t try to go it alone. A professional will have access to solutions that you might not have even thought about. And he or she can help you make net income your priority instead of net worth.
Kim Franke-Folstad contributed to this article.
Guarantees provided by insurance products and annuities are backed by the financial strength and claims-paying ability of the issuing insurance carrier.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Shane Brosnan is a partner at BML Wealth Management in Irvine, Calif. He has more than 20 years of experience in the financial and insurance industry. Investment Advisory Services offered through Cooper Financial Group, an SEC Registered Investment Advisory firm. BML Wealth Management & Cooper Financial Group are not affiliated. California Insurance License # 0B66858.
-
How to Add Your Passport to Google Wallet
Travelers can now store and use their digital passport on Android for faster, more secure airport experiences.
-
Boost Your HSA Savings with These Smart and Savvy Moves
Wednesday is National HSA Awareness Day. Health Savings Accounts (HSAs) provide savers with a triple tax benefit and even more if you adopt these strategies.
-
Medicare Open Enrollment: Why You Need to Pay Extra Attention to Part D, From a Financial Adviser
The lowest premium for prescription drug coverage might not actually save you the most money. Make sure you take copays into consideration and do the math.
-
How the One Big Beautiful Bill Will Change Charitable Giving
Taxpayers who don't itemize will be able to take a bigger deduction for donations, which could boost giving. However, high-income donors could see their tax benefits reduced.
-
A 'Fast, Fair and Friendly' Fail: Farmers Irks Customers With Its Handling of a Data Breach
Farmers Insurance is facing negative attention and lawsuits because of a three-month delay in notifying 1.1 million policyholders about a data breach. Here's what you can do if you're affected.
-
Serving the HNW Market: How Financial Advisers Can Break Through and Deliver Lasting Value
Financial advisers have a significant opportunity to serve high-net-worth clients by elevating their capabilities, delivering comprehensive planning, building diverse teams and prioritizing family wealth education.
-
Don't Just Sell, Connect: How Financial Advisers Can Ignite Their Sales Growth
Avoid complacency and embrace small, consistent improvements to optimize your sales process and results.
-
Are You a Small Business Owner Buckling Under Economic Pressure? Here's How You Can Cope
Significant emotional and financial challenges, including tariff worries, are piling up on small business leaders. Here's how leaders can develop more healthy coping strategies and systems of support.
-
To Raise Prices or Not to Raise Prices: Tariff Tips for Small Businesses
Small businesses are making critical decisions. Should they pass on higher costs due to tariffs, or would that only cost them more in lost customers?
-
Five Retirement Planning Traps You Can't Afford to Fall Into, From a Wealth Adviser
To help ensure you reach your savings goals and enjoy financial security in your golden years, be aware of these common pitfalls. The key is to be proactive, informed and flexible.