You’ve spent the last few decades saving for retirement but are you truly prepared? To help address any concerns or uncertainties you may have, you need an income plan – one that considers every facet of your life in retirement.

Joel Johnson, CFP® joins Better Money Boston with WCVB Channel 5 to share the fundamentals of a comprehensive retirement income strategy.

Guaranteed vs. Non-Guaranteed Income

Before diving deeper into retirement planning, the first step is differentiating between your guaranteed and non-guaranteed income sources. Guaranteed income, including Social Security and pensions, provides a steady stream of payments for the rest of your life.

Non-guaranteed income, such as stocks, bonds, and mutual funds, encompasses everything else. These income sources can be subject to market fluctuations and are not guaranteed to last a lifetime. For most retirees, maintaining a healthy balance of both guaranteed and non-guaranteed sources provides reliability and flexibility.

Coordinating Your Investments

If you don’t have a pension or are just falling short of reaching your savings goals, you may have to look beyond your current retirement accounts. Investments such as stocks, bonds, mutual funds, and ETFs can help bridge the gap. We believe managing investments should be based on a holistic view of your finances. Coordinating your investments with your other income sources is a key component of your overall income strategy.

Costly Expenses: Healthcare and Taxes

There’s no denying that healthcare expenses are one of the highest costs retirees face. According to a study by Fidelity, a couple is estimated to spend about $300,000 on healthcare in retirement. If you’ve been a diligent saver, you may decide to earmark funds specifically for these potential costs. If that’s not a feasible option, it’s important to have a conversation with a financial professional about how to best manage these expenses.

Another significant expense that many people forget to consider is taxes. While focusing on investments and calculating a reasonable rate of return is important, minimizing taxes can actually provide the biggest boost to your spendable income.

Leaving Behind a Legacy

A well-rounded retirement plan is incomplete without considering your legacy. Think about what you wish to leave for future generations and how to make it happen. By creating a financial plan, you can ensure your money supports you well throughout your life and extends to those you leave behind. Legacy planning is the first essential step in securing your future and that of your beneficiaries, whether they are your children or an organization you care about.