January 16, 2025
Allworth financial advisor Michael Coates, CFP®, explains how retirees can design an income strategy that balances taxes, spending, and long-term goals to ensure a comfortable and financially secure retirement.
Retirement is a time to enjoy the fruits of your labor, but to do that with confidence, you need a solid plan for how you’ll generate income. After years of saving and investing, shifting to “spending mode” can feel unfamiliar—and even a bit nerve-wracking. But with the right strategy, you can enjoy your retirement without worrying about whether your money will last.
A well-designed income strategy considers your unique goals, the current tax laws, and the best way to make your money work for you. Here’s how you can take the first steps toward building a plan that aligns with your vision for a comfortable retirement.
The first step in designing a retirement income strategy is understanding where your money will come from.
Most retirees rely on a mix of sources, such as:
Understanding how these sources fit together is key to creating a sustainable income plan.
Taxes don’t stop in retirement, and your withdrawal strategy plays a big role in how much you keep versus how much goes to Uncle Sam.
Here’s a general framework for tax-efficient withdrawals in 2025:
The goal is to withdraw strategically to keep your taxable income low and make your money last.
Your income strategy isn’t just about the numbers—it’s about what you want your retirement to look like. Are you planning to travel extensively? Spend more time with family? Pursue hobbies you’ve always loved?
Knowing your priorities helps you create a realistic spending plan. Start by estimating your expenses:
A good rule of thumb is the 4% withdrawal rate, which suggests you can withdraw 4% of your portfolio annually and have it last 30 years. However, this isn’t a one-size-fits-all solution, especially with inflation and market fluctuations. Your spending should adapt to your goals and circumstances.
One of the biggest concerns retirees face is outliving their savings. With people living longer than ever—many into their 90s—your income strategy needs to account for longevity.
Inflation is another key factor. In 2025, inflation rates have stabilized somewhat, but costs like healthcare continue to rise faster than general inflation. Building in annual spending adjustments to keep up with the cost of living is essential.
Strategies to protect against longevity and inflation include:
Designing an income strategy that balances your needs, goals, and tax considerations is complex—but you don’t have to do it alone. A trusted financial advisor can help you create a personalized plan that gives you confidence and peace of mind.
A comfortable retirement starts with a well-thought-out income strategy. By understanding your income sources, withdrawing strategically, aligning your spending with your goals, and planning for the unexpected, you can enjoy the retirement you’ve worked so hard for.
If you’re ready to start building your income plan—or want a second opinion on the one you have—I’d be happy to help. Let’s work together to make sure your retirement is as secure and fulfilling as you’ve always dreamed.
Many of the clients I work with choose me because I’m a collaborative financial partner during the later years of their careers. When you’re in the final era of your work life, you need an equitable relationship with your financial advisor, so you feel empowered to make educated decisions that set you up for lasting financial success.
If you’re feeling uncertain about how to prioritize your goals, I’ll help to develop a path to get you to retirement in the most efficient way possible.
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The information presented is for educational purposes only and is not intended to be a comprehensive analysis of the topics discussed. It should not be interpreted as personalized investment advice or relied upon as such.
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