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Retirement Income Planning Tips to Secure Your Financial Future

  • Writer: Editorial Staff
    Editorial Staff
  • 1 day ago
  • 4 min read

Closing in on retirement? Congratulations are in order. This year, around 4.2 million people in the U.S. will turn 65, joining the ranks of those approaching retirement. 


Retirement signals a move away from the daily grind of work and into a new chapter filled with more freedom. 


This transition is exciting, but it also comes with important financial considerations. After all, you’re shifting from a steady paycheck to savings, investments, and benefits. You’ll want to make sure your income lasts, your healthcare needs are covered, and your lifestyle remains comfortable well into the future.


The shift from receiving a paycheck to drawing down savings can feel jarring. But don’t worry. You can step confidently into the retirement you’ve worked so hard to achieve if you plan your retirement income properly. 

Retirement Income Planning Tips to Secure Your Financial Future

Here, we’ll share a few retirement income planning tips that will help you enjoy your golden years stress-free.


#1 Sequence Your Withdrawals

Retirement savings are not held in a single account, but in several different ones. You must withdraw funds from these accounts in a way that minimizes taxes.


First, you have the taxable bucket, which includes standard brokerage accounts. You already paid income tax on this money when you earned it. When you withdraw, only the investment growth is taxed.  


Second is the tax-deferred bucket. This includes the traditional 401(k)s and traditional IRAs (Individual Retirement Arrangement). They hold contributions that were not taxed going in, so every dollar withdrawn in retirement is later taxed as ordinary income.


Finally, the tax-free bucket is your Roth IRA or Roth 401(k). You paid taxes on the contributions upfront. So, qualified withdrawals are totally tax-free forever.  


Draw from taxable accounts first, so tax-advantaged money can grow longer. Then, tap into tax-deferred accounts. Delay this step for as long as possible so that the money grows tax-deferred. 


Save your Roth accounts for last. They offer the greatest financial benefit. Since the withdrawals are tax-free, this money is perfect for later retirement years. It is an excellent buffer against rising tax rates.


#2 Plan for Healthcare Costs

Health care expenses are a huge financial risk for retirees. According to a 2025 estimate, a healthy 65-year-old retiring today may need $172,500 out-of-pocket for medical expenses in retirement. These costs can be much higher for couples.  


Medicare is the foundation of U.S. healthcare coverage for retirees. Once you turn 65, you can enroll in Original Medicare, which covers hospital and inpatient care.


Note, though, deductibles, co-pays, and coverage gaps can still add up. Private insurance plans called Medigap policies are sold to help fill these gaps. Factor the cost of Medigap premiums into your monthly retirement budget.   


For individuals with limited income, government programs can provide help. In California, for instance, 38,138,100 people are below the Federal Poverty Level. These individuals qualify for Medi-Cal, the state’s Medicaid program. It offers broader coverage than Medicare, including long-term care. 


When it comes to Medi-Cal vs. Medicare, some people are eligible for both. This allows them to receive broader healthcare coverage with reduced out-of-pocket expenses. 


LIFE143 explains that you qualify for both programs if you are 65 or older (Medicare) and have a low income (Medi-Cal).


#3 Diversify Your Investments

As you near retirement, shift your financial focus from aggressive growth toward capital preservation. Diversifying, or spreading your money across different investments, can shield you from the unpredictable ups and downs of the market.


A study found that non-working retirees with diverse income sources were financially better situated than those who relied only on Social Security and government transfers in 2023. 


Stocks offer higher potential long-term returns but carry greater risk. Bonds provide a buffer. They help protect your portfolio against sharp stock market downturns.   


The "100 Minus Your Age Rule" is a simple method to set an initial stock allocation. Subtract your age from 100 to find the target percentage for stocks. If you are 60, aim for about 40% in stocks. 


Don’t stop there. Diversify both among asset classes (stocks vs. bonds) and within asset classes. Within the equity space, diversify beyond just an S&P 500 index fund. This involves spreading investments across different sectors, company sizes (like the Russell 2000), and geographical areas (international stocks). 


Consider options like real estate, REITs (real estate investment trusts), or annuities for additional income diversification. These can help reduce your reliance on market performance alone.


Take Control of Your Golden Years

More than just a large nest egg, you need a thoughtful plan for distributing your wealth to secure your financial future in retirement. 


You can create a robust income playbook if you follow these tips. The earlier you start, the more flexibility you’ll have to make smart choices. Take charge of your retirement income plan today, and you can enjoy your golden years with confidence and peace of mind.



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