Gabe Fransen | September 15, 2025
We believe that retirement planning extends beyond accumulating savings. When regular paychecks stop, retirees may face challenges such as generating income, managing taxes, protecting assets, and addressing health and family needs. Many strategic retirees rely on informed decisions rather than guesswork to navigate their financial future. Below are a few key strategies that retirees may consider for effective retirement planning:
1. Develop a Strategic Income Plan
Withdrawing funds from savings without a plan may lead to inefficiencies. Strategic retirees can create an income strategy by considering:
- Which accounts to draw from first (e.g., taxable accounts, IRAs, or Roth IRAs) to enhance tax efficiency.
- Ways to manage withdrawals to stay within their current tax bracket.
- Methods to address Income-Related Monthly Adjustment Amount (IRMAA) surcharges on Medicare premiums.
- Coordination of withdrawals with Social Security benefits and Required Minimum Distributions (RMDs).
Careful withdrawal planning may help retirees manage tax liabilities and preserve savings over time.
2. Plan for Healthcare Costs
Medicare offers important coverage but does not include expenses like dental, vision, hearing, or long-term care, which can be significant in retirement. Retirees may:
- Budget for out-of-pocket healthcare expenses.
- Evaluate supplemental insurance options, such as Medigap or Medicare Advantage, to address coverage gaps.
- Consider potential long-term care needs through insurance or dedicated savings.
Planning for these costs may help retirees maintain financial stability in the face of medical expenses.
3. Create a Tax-Efficient Legacy
Inheriting IRAs or other retirement accounts can result in tax liabilities for heirs, especially under the SECURE Act, which generally requires non-spousal beneficiaries to withdraw inherited accounts within 10 years. Retirees may explore:
- Converting traditional IRAs to Roth IRAs over time to provide tax-free assets to heirs.
- Keeping beneficiary designations current to avoid complications.
- Using gifting strategies during their lifetime to reduce the taxable estate.
- Consulting with a financial advisor to develop an estate plan aligned with their objectives.
Thoughtful estate planning may help retirees pass on assets in a tax-efficient manner.
4. Align Investments with Retirement Objectives
Investment strategies in retirement often differ from those during working years, balancing growth, stability, and income. Retirees may:
- Maintain cash or low-risk investments for short-term expenses (1–3 years).
- Allocate funds for growth in accounts not needed for a decade or more.
- Periodically review portfolios to reflect changing needs and market conditions.
- Focus on investments that support their lifestyle rather than aiming to outperform the market.
The objective is to structure investments to support financial needs over a 20–30 year retirement period.
Retirement planning requires careful consideration, but retirees and pre-retirees may benefit from professional guidance. A comprehensive plan may help address:
- Converting savings into a reliable income stream.
- Managing taxes effectively.
- Preparing for unexpected expenses, such as healthcare or family needs.
- Structuring a legacy that aligns with personal values.
For those within 5–10 years of retirement or already retired, consulting a financial advisor may provide clarity in developing a tailored retirement strategy.