Create a retirement income strategy

As you approach the time when you’ll need to start tapping into your retirement savings, you'll want a retirement income strategy to help you use those savings wisely.

Calculate your expenses

A clear vision of your retirement lifestyle is the foundation of a sound retirement income strategy. Think about what you'd like to do in retirement, and make a list of likely expenses, such as mortgage or rent, auto expenses, groceries, healthcare, travel, and entertainment.

Consider the forces that affect your retirement savings

  • People are living longer. That's good news, but it means your savings have to last through a longer retirement. A comprehensive retirement savings plan can help make sure you don't outlive your income.
  • Even if you're in good health, your healthcare costs will increase as you get older. Healthcare-related expenses can end up costing more than you expect, so it's important to be prepared. Know what your benefits cover and what expenses you'll need to pay out of pocket. It's easy to overspend. Establish a rate of withdrawal you can sustain over the life of your retirement.
  • Inflation reduces your buying power over time. The right asset allocation strategy can help you outpace inflation.

Review your asset allocation

It's important to review the asset allocation of your portfolio every year. A portfolio based on a good investment strategy can help create income to spend in retirement while helping protect you from inflation. Portfolios designed for retirement income should include investments focused on:

Asset growth

This can help offset inflation and make it easier to ensure that your savings last throughout retirement.

Asset preservation

You can access low-risk investments or pass them on to your heirs.

Guaranteed sources of lifetime income

Guaranteed lifetime income can be achieved by investing in an annuity. Some employer-sponsored retirement plans also offer guaranteed income features.

Use your tax advantages

The longer you leave your assets in tax-advantaged accounts, the longer they have to grow. Learn the rules that govern withdrawals for each of your account types before you start taking distributions. You'll want to be as tax-efficient as possible. If you can, make withdrawals in this order: 

  1. Taxable accounts (regular savings)
  2. Tax-deferred accounts (traditional Individual Retirement Accounts (IRAs) and employer-sponsored retirement plans)
  3. Tax-free accounts (Roth IRAs and other Roth savings)  

Work with a financial professional

Speak with your retirement plan representative to discuss your retirement savings options, or work with an advisor to design your personal retirement income strategy.

This material is provided by The Lincoln National Life Insurance Company, Fort Wayne, IN, and, in New York, Lincoln Life & Annuity Company of New York, Syracuse, NY, and their applicable affiliates (collectively referred to as “Lincoln”). This material is intended for general use with the public. Lincoln does not provide investment advice, and this material is not intended to provide investment advice. Lincoln has financial interests that are served by the sale of Lincoln programs, products and services.