Retirement is a major life transition, and planning your income for this stage can feel overwhelming. Whether you're wondering “Can I retire?” or “How do I make my money last?”, working with a financial advisor can help you create a structured plan for financial security and peace of mind.
Here’s a step-by-step breakdown of how the financial planning process applies to retirement income planning—so you know what to expect when working with an advisor.
Step 1: Establishing the Client-Advisor Relationship
Before any financial planning takes place, you and your advisor need to define your working relationship. This includes:
- Clarifying what services the advisor will provide
- Setting expectations for communication and decision-making
- Understanding your concerns about retirement, such as when you can retire and how to transition
Many people seek financial advice after a life event triggers the need for planning—whether it’s approaching retirement age, changing jobs, or receiving an inheritance. Your advisor will help you define your goals and set a clear path forward.
Step 2: Gathering Your Financial Data
This step involves collecting all the necessary financial information to understand your situation. Your advisor will ask for:
- Income sources (Social Security, pensions, investments, etc.)
- Expenses (both current and expected in retirement)
- Assets and liabilities
- Lifestyle goals (travel, hobbies, family support)
Because you may not have experience planning for retirement, your advisor will also help you think through things you may not have considered—like healthcare costs, inflation, and tax strategies.
Step 3: Analyzing Your Financial Situation
Using the data collected, your advisor will evaluate:
- Whether your savings and income sources can sustain your desired retirement lifestyle
- What risks (like market downturns or longevity) could impact your plan
- Whether adjustments are needed—such as delaying retirement, reducing expenses, or investing differently
Advanced software tools may help project different scenarios, but ultimately, your advisor will guide you through realistic options based on your priorities.
Step 4: Exploring Alternatives & Creating Your Retirement Plan
Since retirement planning often involves trade-offs, your advisor will work with you to make key decisions:
- When you can afford to retire
- How much you can safely withdraw from savings each year
- How to balance guaranteed income (like Social Security) with investments
- What risks you’re willing to accept versus what needs to be protected
This stage is interactive—your advisor will present different options and refine the plan based on what feels right for you.
Step 5: Implementing the Plan
Once the plan is finalized, it’s time to put it into action. This may include:
- Adjusting investments to align with your retirement timeline
- Setting up systematic withdrawals or annuities for predictable income
- Managing tax-efficient withdrawals from different accounts
Your advisor will also help you navigate any emotional concerns—such as adjusting to a new lifestyle or concerns about market fluctuations.
Step 6: Ongoing Monitoring & Adjustments
Retirement planning isn’t a “set it and forget it” process. Life changes, the market shifts, and unexpected expenses arise. Your advisor will continue to:
- Review your plan regularly (typically with annual meetings)
- Adjust for tax laws, inflation, or new financial goals
- Provide peace of mind that you're still on track
For many retirees, the most important question becomes: “Am I still okay?” Regular check-ins help ensure your financial security.
Final Thoughts
Retirement is a new chapter, and having a structured financial plan can make all the difference. By working with an advisor through each step—building the plan, implementing it, and adjusting along the way—you can retire with confidence, knowing your finances are in good hands.
Need help creating your retirement income plan? Let’s start the conversation today!