Is It Time to Rethink Your Retirement Income Strategy?

April is Financial Literacy Month—a timely reminder to check in on your financial well-being. Just as many people use spring as an opportunity to tidy up their homes, this season also presents a valuable chance to revisit your retirement plan. One area that deserves regular attention? Your retirement income strategy. 

As life changes, markets shift, and tax laws evolve, the plan that once made perfect sense may no longer be the best fit for your current goals or lifestyle. A quick review can help you identify whether adjustments are needed to stay on track. So, ask yourself: Is your current strategy still   working as planned? 

Why Revisit Your Retirement Income Strategy Now? 

Even the most carefully designed retirement income plan isn’t meant to be a “set-it-and-forget-it” strategy. Over time, a variety of factors can influence how effectively your plan supports your lifestyle—and how long your money lasts. 

Here are a few reasons why now may be the right time to take another look: 

• Market Volatility: Changes in the stock and bond markets can affect your investment balances and, by extension, how much income you can safely draw without risking your long-term goals. 

• Inflation or Interest Rate Shifts: Higher living costs or fluctuating interest rates can erode purchasing power or impact the income you receive from fixed-income investments. 

• Tax Law Updates and RMD Rules: Recent or upcoming changes to tax regulations, including rules around required minimum distributions (RMDs), can affect the timing and tax impact of withdrawals. 

• Evolving Personal Goals or Family Dynamics: Retirement often includes life transitions—downsizing, traveling more, helping family members, or dealing with healthcare needs—all of which may shift your spending priorities or require more flexibility in your income plan. 

These changes don’t necessarily mean your plan is off track, but they do underscore the importance of regular reviews. Adjusting your strategy now may help improve tax efficiency, maintain your desired lifestyle, and provide more confidence about the years ahead. 

Core Elements of a Retirement Income Strategy 

A well-structured retirement income plan is built on more than just a list of accounts—it’s a coordinated strategy that considers where your money comes from, how and when you access it, and how to make it last. Here are the key components to consider: 

Income Sources 
Your retirement income likely comes from multiple streams. Understanding how these sources interact is essential to creating a sustainable plan: 

• Social Security: When you claim can impact your monthly benefit amount—and your long-term income. 

• Pensions and Annuities: These can offer predictable income but may have limited flexibility. 

• IRAs and 401(k)s: Withdrawals from these tax-deferred accounts are typically taxable and may be subject to RMDs. 

• Brokerage Accounts: These can offer flexibility and potential tax advantages, depending on how investments are managed. 

Withdrawal Strategy

The order in which you draw from different accounts can significantly affect how long your money lasts and how much you pay in taxes: 

• Sequencing Withdrawals: Deciding when to tap tax-deferred, taxable, or Roth accounts is a key part of optimizing your strategy. 

• Required Minimum Distributions (RMDs): Once you reach a certain age, the IRS requires minimum withdrawals from certain retirement accounts. Planning around RMDs can help minimize tax surprises. 

Tax Efficiency

Even small tax planning decisions can make a big difference over time: 

• Bracket Management: Spreading income across multiple tax years or staying within certain tax brackets may help reduce your overall tax burden. 

• Roth Conversions or Capital Gains Timing: Strategic conversions or realizing gains in low-tax years can enhance long-term efficiency. 

Longevity Planning

Your plan should support not just the early years of retirement, but decades into the future: 

• Healthcare and Long-Term Care: Consider how you’ll cover rising medical costs and potential extended care needs. 

• Budgeting Beyond Age 85: Planning with a long time horizon in mind—well into your 80s or 90s—helps account for inflation, emergencies, and changing priorities. 

Signs It May Be Time for a Refresh 

Even if your retirement income strategy worked well in the past, changes in your personal situation or the financial landscape can make it less effective over time. Here are a few signs that it might be time to revisit your plan: 

• You Haven’t Reviewed Your Withdrawal Plan in Over a Year: Markets shift, tax laws evolve, and your income needs may change. If it’s been more than a year since you reviewed your withdrawal strategy, there may be opportunities to improve tax efficiency or better align with your current goals. 

• Your Portfolio Has Shifted Significantly Due to Market Changes: A strong market year—or a downturn—can throw your portfolio off balance. If your asset allocation no longer reflects your target risk level, it could impact the sustainability of your income plan. 

• You’re Unsure How Taxes Will Affect Your Withdrawals: Different income sources are taxed in different ways. If you’re not confident in how much of your withdrawals you’ll actually keep after taxes, it’s a good time to revisit your strategy with a tax lens. 

• You’ve Recently Retired, Downsized, or Changed Your Spending Patterns: Major lifestyle shifts often mean major financial changes. Whether your expenses have gone up or down, your income strategy should reflect your current reality—not your situation from five years ago. 

• You’re Approaching or Past RMD Age and Want to Reduce Tax Impact: Once RMDs begin, they can increase your taxable income significantly. Planning ahead can help you manage the tax impact and potentially preserve more of your savings over time. 

If any of these apply to you, it may be time to give your retirement income strategy a thoughtful refresh. A few adjustments now can lead to greater confidence and clarity about the road ahead. 

Questions to Ask Yourself This Spring 

Spring is the perfect time to check in on your financial plan and make sure your retirement income strategy is still working for you. Use the checklist below to guide your review: 

• Am I withdrawing from the right accounts in the most tax-efficient order? The sequence in which you take money from taxable, tax-deferred, and tax-free accounts can make a big difference in how long your savings last—and how much you pay in taxes over time. 

• Do I know how my income will be taxed in 2025? Each income source—Social Security, pensions, IRAs, brokerage accounts—has different tax implications. Understanding your projected tax bracket and how income is treated can help you plan more effectively. 

• Have I reviewed my RMD strategy or considered a QCD (qualified charitable distribution)? If you’re at or nearing RMD age, planning ahead can help minimize tax exposure. Qualified charitable distributions from IRAs may also be a tax-smart way to give while satisfying RMD requirements. 

• Is my income strategy built to handle inflation and healthcare costs? Make sure your plan accounts for rising costs over time, especially in areas like medical expenses and long-term care. 

• Have I reviewed or rebalanced my portfolio to match current income needs? If market movements have shifted your asset allocation, it could affect your ability to generate income or maintain an appropriate level of risk. A review can help you stay aligned with your goals. 

How a Financial Professional Can Help 

Coordinating your retirement income strategy isn’t just about choosing investments or tracking withdrawals—it’s about bringing together all the moving parts of your financial life. That includes investment management, tax planning, and estate considerations working together in a way that supports your goals. 

Working with a financial professional can help you: 

• Optimize Retirement Withdrawals: Financial professionals help determine the most efficient order to draw from your accounts, balancing income needs with tax considerations. 

• Manage Tax Implications: By coordinating your withdrawal strategy with evolving tax laws and RMD requirements, they may help you minimize unnecessary tax exposure and make the most of your available resources. 

• Project Long-Term Income Needs: They may also work with you to model different scenarios—factoring in inflation, market fluctuations, and healthcare expenses—so you can feel more confident. 

Even small changes to your strategy today can make a meaningful difference over time. Whether it’s adjusting your withdrawal plan, rebalancing your portfolio, or updating your estate documents, having the right guidance can help you stay on track—and avoid costly surprises later. 

 

Conclusion 

Spring is a natural time to take stock of where you are—and where you’re headed. A seasonal check-in on your retirement income strategy can help you stay aligned with your goals, adapt to changes, and make smarter financial decisions for the months and years ahead. 

Whether you’re already retired or planning for the next chapter, taking a fresh look at your income plan could uncover opportunities to improve tax efficiency, balance risk, and create more predictability in your financial life. 

Start with our free Retirement Spring Cleaning Checklist—a simple, actionable guide to help you review the key areas of your financial plan. 

Need help reviewing your income strategy? Our team at Liberty Group is here to help. Contact us to schedule a conversation.