As you approach retirement, your financial objectives shift from accumulating savings to generating income for the rest of your life. Even if you’ve been a diligent saver, achieving that goal requires a comprehensive retirement income strategy.

Joel Johnson, CFP® joins Retire Wiser with NBC Connecticut to highlight some of the most important variables involved in creating a retirement income plan for today’s retirees.

The Impact of Inflation

You must consider the role of inflation when planning for retirement. There’s a very real possibility that you could spend 30 or more years in retirement, during which you may need to triple your income to keep up with rising costs. A robust retirement income plan will account for all of that – how much income you want, how many raises you’ll need to give yourself, and what rate of return you’ll need. With a well-thought-out strategy in place, you can combat inflation and lead a comfortable lifestyle throughout your retirement years.

Rising Health Care Costs

Another critical consideration is the rising cost of health care. Once you’re retired and no longer covered by your employer’s plan, you need to navigate Medicare and other health care costs without compromising your financial stability or your health. It’s estimated that a 65-year-old couple today can expect to spend an average of $315,000 in health care expenses throughout retirement – and that doesn’t account for long-term care. Whether you choose to set aside funds, purchase insurance, or establish a trust, it’s essential to factor these costs into your retirement income plan.

Social Security Benefits

Deciding when to start claiming your Social Security benefits is a significant piece of your retirement income strategy. We’re often asked, when is the best time to claim? The truth is, there isn’t a one-size-fits-all answer. It may be most advantageous to wait until your full retirement age (67 for those born in 1960 or later), or you may want to delay claiming until your benefit reaches its maximum at age 70. It’s all about getting the timing right in the context of your total retirement income plan.

Efficient Tax Planning

As your retirement accounts have grown, so has your tax burden. Without a plan in place, you may end up paying more money in taxes than you need to. A tax-efficient withdrawal strategy is key to maximizing your spendable income in retirement. We believe in taking a long-term view of your tax situation to make the necessary adjustments to your financial plan. By lowering your lifetime tax obligation, you can keep more of what you’ve earned.

Everyone needs a retirement income strategy that not only aligns with their financial goals but also adapts to life’s uncertainties. From health care considerations to tax planning, each factor plays a critical role in ensuring your money lasts as long as you do. By consulting with a financial advisor, you can start planning for a stress-free retirement.