The transition to retirement comes with unique financial challenges. Managing withdrawals, mitigating risks and finding the right strategies for sustainable income can make or break your retirement plan. With thoughtful preparation and expert guidance, you can create a stable and fulfilling financial future.
A key to successful retirement planning is understanding your options. Financial planning isn’t a one-size-fits-all process; it should be tailored to your needs and goals. Working with an adviser who serves as a coach and educator — rather than simply dictating a plan — can make a world of difference.
For example, we helped a client, Travis, transition from a volatile, cookie-cutter portfolio into one that incorporated safe assets and personalized strategies. Through education and collaborative planning, Travis understood the reasoning behind his allocation choices, boosting his confidence in the plan. This tailored approach has supported him for over two years and continues to provide stability.
Sign up for Kiplinger’s Free E-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.
Single vs married: Tailoring to individual goals
The structure of your retirement plan should reflect your personal objectives, regardless of your marital status. While single and married individuals may have different dynamics, the key is to address specific goals:
- Legacy planning. For individuals who wish to leave assets to heirs, structuring a plan to meet those wishes is essential. Trusts, life insurance and tax-efficient strategies can help protect and pass on wealth.
- Spending down assets. For those without a legacy plan, the focus shifts to optimizing resources for personal fulfillment during retirement. Innovative strategies can ensure you maximize your wealth while meeting your income needs.
Tailoring your plan starts with aligning it to your vision for retirement and then building a strategy that achieves those goals.
Leveraging opportunities in changing markets
Market conditions constantly evolve, offering both challenges and opportunities. A successful retirement plan should be adaptable, taking advantage of favorable conditions while safeguarding against downturns.
- Capitalizing on rising interest rates. Fixed and income annuities have become more attractive in the current environment. Higher interest rates allow these products to provide reliable income streams, bridging income gaps in your retirement portfolio.
- Working with a true fiduciary. Fiduciaries are required to act in your best interest, exploring all tools in the marketplace to meet your needs. Beware of rigid stances — such as advisers avoiding annuities entirely or annuity producers offering limited investment options. A well-rounded adviser ensures your plan is holistic and balanced.
Mitigating withdrawal risks during downturns
Market volatility can have a compounding effect on your retirement savings, especially if withdrawals occur during downturns. To protect your portfolio:
- Fill income gaps with safe assets. Identify fixed expenses and use safe assets — such as fixed index annuities, bonds or CDs — to cover income shortfalls. For example, if a retiree needs $100,000 annually but receives $70,000 from Social Security and a pension, the remaining $30,000 can be secured through safe assets. This approach provides stability for five to 10 years during market corrections.
- Establish guaranteed income streams. Products like privatized pensions, structured annuities or income riders offer predictable income regardless of market fluctuations. These tools create a financial foundation that can help weather uncertain economic conditions.
- Diversify your income sources. Relying on multiple income streams, such as pensions, Social Security, and investment returns, minimizes the risk of overdependence on any single source during volatile times.
Avoiding common DIY pitfalls
While managing your portfolio independently might seem like a way to save money, it can often lead to costly mistakes. Consider this analogy: Would you renovate your house yourself, or hire a contractor who specializes in renovations?
One client, a successful attorney managing his own portfolio, was unnecessarily paying $100,000 annually in excess taxes due to inefficiencies in mutual fund investments. After working with us to reallocate his portfolio, he significantly reduced his tax burden and improved his financial outcomes. The lesson is clear — financial expertise matters, especially when it comes to complex issues like tax efficiency and portfolio structure.
Asking the right questions
To determine whether your adviser is equipped to guide you through the distribution phase, ask these critical questions:
- Have they educated you about safe assets, annuities and tax-efficient strategies?
- Have they created a tailored income plan that accounts for market volatility?
- Are they proactive in identifying new opportunities and adapting your plan as conditions change?
If the answer to any of these questions is “no,” it might be time to find a financial professional with the expertise to navigate the complexities of retirement distribution.
The bottom line
Navigating market volatility and ensuring sustainable income during retirement requires more than a cookie-cutter approach. By understanding your options, leveraging safe assets and working with a knowledgeable adviser, you can mitigate risks and achieve your retirement goals. The journey doesn’t end at retirement — it’s just the beginning of a new phase where proactive planning and expert guidance ensure long-term success.
Want more guidance on retirement savings? Sign up for Kiplinger's six-week series, Invest for Retirement.
Related Content
- Four Threats to the Distribution Phase of Retirement
- Fixed Index Annuities as Retirement Tools: Pros and Cons
- Do You Have the Five Pillars of Retirement Planning in Place?
- Six Financial Actions to Take the Year Before Retirement
- Five Things I Wish I’d Known Before I Retired
-
Callable CDs Have High Rates. We Still Don't Recommend You Get ThemInvestors must carefully consider the trade-offs, as falling interest rates could lead to reinvestment at a lower yield and make selling on the secondary market difficult.
-
High Mortgage Rates Are Holding My Retirement Hostage: Can I Still Downsize and Retire?We ask retirement wealth advisers what to do.
-
Callable CDs Have High Rates: We Still Don't Recommend You Get Them
Investors must carefully consider the trade-offs, as falling interest rates could lead to reinvestment at a lower yield and make selling on the secondary market difficult.
-
High Mortgage Rates Are Holding My Retirement Hostage: Can I Still Downsize and Retire?
We ask retirement wealth advisers what to do.
-
Five Big Beautiful Bill Changes and How Wealthy Retirees Can BenefitHere's how wealthy retirees can plan for the changes in the new tax legislation, including what it means for tax rates, the SALT cap, charitable giving, estate taxes and other deductions and credits.
-
Portfolio Manager Busts Five Myths About International InvestingThese common misconceptions lead many investors to overlook international markets, but embracing global diversification can enhance portfolio resilience and unlock long-term growth.
-
Stock Market Today: Nasdaq Hits a New High as Nvidia SoarsA big day for Nvidia boosted the Nasdaq, but bank stocks created headwinds for the S&P 500.
-
June CPI Signals Tariff Impact: What the Experts SayThe June CPI report shows that inflation is accelerating, but at a pace that's in line with economists' expectations.
-
I Want to Buy an Annuity, but I'm Scared I'll Get Ripped Off. Should I Get One Anyway?An annuity is a way to achieve lifetime income in retirement, but you need to understand how this product works before making a purchase.
-
Can AI Help With Your Finances?ChatGPT and other artificial-intelligence tools will streamline certain tasks, but don't count on them to get everything right.
