Life Income Planning

Secure a Comfortable Retirement by Planning Your Income Needs

Planning for Life

Planning for income that lasts the rest of your life – also known as lifetime income planning – is critical to a secure and comfortable retirement. Here’s a structured approach to doing it:

Step 1: Know Your Retirement Needs

Estimate how much money you will need annually in retirement. Consider:

  • Basic living expenses: housing, food, transportation
  • Healthcare Costs
  • Travel and hobbies
  • Inflation

Step 2: Evaluate Your Income Solutions​

Add up all reliable, predictable sources of income you’ll have for life:

  • Social Security (claiming it later increases benefits)
  • Pensions (if you have one)
  • Annuities (lifetime income options)
  • Rental or passive income

Then consider:

  • 401(k), IRA, or other retirement accounts
  • Investments (stocks, bonds, etc.)
  • Part-time work or side businesses

Step 3: Fill the Income Gap​

If guaranteed income sources (Social Security, pension, annuity) don’t cover your estimated expenses, plan how to fill the gap:

  • Withdraw from savings/investments: Use a sustainable strategy like the 4% rule (withdraw 4% of your portfolio annually, adjusted for inflation).
  • Create a personal pension using an annuity that provides lifetime income.
  • Reduce expenses or downsize your lifestyle if needed.

Step 4: Protect Against Risks​

Several risks can derail your plan – plan for them:

  • Longevity risk: You might live longer than expected. Consider lifetime annuities or delaying Social Security.
  • Market risk: Diversify your investments and keep a cash reserve.
  • Inflation: Choose assets that typically outpace inflation (like stocks, real estate).
  • Healthcare/long-term care: Consider long-term care insurance or hybrid policies.