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You already know it's important to save for retirement. But as you approach the moment when you need to use those savings, you'll also need to develop a plan for how you'll spend the income your savings provide.

Calculate Your Expenses

A clear vision of your retirement lifestyle is the foundation of a sound retirement income strategy. Think about what you'd like to do in retirement, and make a list of likely expenses, such as mortgage or rent, auto expenses, groceries, healthcare, travel, and entertainment.

Consider Key Factors

  • People are living longer. That's good news, but it means your savings have to last through a longer retirement. A comprehensive plan can help make sure you don't outlive your income.
  • Even if you're in good health, your healthcare costs will increase as you get older. Healthcare-related expenses can end up costing more than you expect, so it's important to be prepared. Know what your benefits cover and what expenses you'll need to pay out of pocket. It's easy to overspend. Establish a rate of withdrawal you can sustain over the life of your retirement.
  • Inflation reduces your buying power over time. The right asset allocation strategy can help you outpace inflation.

Review Your Asset Allocation

It's important to review the asset allocation of your portfolio every year. A portfolio based on a good investment strategy can help create income to spend in retirement while helping protect you from inflation. Portfolios designed for retirement income should include investments focused on:

  • Asset growth: This can help offset inflation and help ensure your savings last throughout retirement.
  • Asset preservation: You can access low-risk investments or pass them on to your heirs.
  • Guaranteed sources of lifetime income: This can be achieved by investing in an annuity. Some employer-sponsored retirement plans also offer guaranteed income features.

Use Your Tax Advantages

The longer you leave your assets in tax-advantaged accounts, the longer they have to grow. Learn the rules that govern withdrawals for each of your account types before you start taking distributions. You'll want to be as tax-efficient as possible. If you can, make withdrawals in this order:

  1. Taxable accounts (regular savings)
  2. Tax-deferred accounts (traditional IRAs and employer-sponsored retirement plans)
  3. Tax-free accounts (Roth IRAs and other Roth savings)

Speak with your retirement plan representative to design your personal retirement income strategy. Explore your retirement needs with our Retirement Planner and look forward with confidence to life after work.


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Lincoln Financial Group is the marketing name for Lincoln National Corporation and insurance
company affiliates, including The Lincoln National Life Insurance Company, Fort Wayne, IN,
and in New York, Lincoln Life & Annuity Company of New York, Syracuse, NY. Variable products
distributed by broker/dealer-affiliate Lincoln Financial Distributors, Inc., Radnor, PA. Securities
and investment advisory services offered through other affiliates. Explore Lincoln.