FRIDAY, SEPTEMBER 25, 2026

THE RETIREMENT PAYCHECK - PART 4 OF 4

You've spent decades accumulating money.

You may now have a 401(k), IRA, Roth IRA, brokerage account, savings account and Social Security.

Then retirement arrives.

Suddenly the question changes. Instead of asking, "Where should I save my next dollar?" you're asking, "Where should I get my next dollar?"

That transition from accumulation to distribution is one of the most important changes in retirement planning.

There Isn't a Universal Withdrawal Order

You've probably encountered rules of thumb suggesting retirees should spend taxable accounts first, then traditional retirement accounts and Roth accounts last.

That may work in certain situations. But retirement planning rarely fits neatly into a universal formula.

Sometimes taking money from an IRA earlier can make sense. Sometimes using taxable investments first may be preferable. Sometimes Roth money may provide valuable flexibility.

And sometimes using multiple accounts simultaneously can produce a better result than completely draining one account before touching another.

The appropriate strategy depends on your circumstances.

Think in Terms of Tax Brackets

Imagine a retired couple whose taxable income drops substantially after they stop working.

They might have several years before required minimum distributions begin.

Instead of automatically spending only from their taxable account, they might consider intentionally withdrawing some money from a traditional IRA while they're in a relatively favorable tax bracket. Or they might consider converting some traditional IRA money to a Roth IRA.

That could mean voluntarily paying some taxes sooner. Why would anyone do that? Because waiting isn't automatically better.

Large traditional retirement balances can eventually create larger taxable distributions. Those distributions may affect income taxes and potentially Medicare premiums.

The objective isn't necessarily to eliminate taxes. It's to manage them.

Your Investments Matter Too

Taxes aren't the only consideration.

Suppose the stock market falls significantly during your first few years of retirement.

If you're forced to sell investments after a substantial decline to pay living expenses, those dollars are no longer invested when the market eventually recovers.

This is commonly associated with sequence-of-returns risk.

A retirement income strategy can help determine which assets are available for current spending and which assets can remain invested for longer-term needs.

That doesn't mean trying to predict the stock market. It means preparing for the reality that markets don't move upward in a straight line.

The Goal Isn't to Die With the Biggest IRA

For decades, you've been taught to save. Then retirement arrives, and spending those savings can feel surprisingly uncomfortable.

We've met retirees who have accumulated significant assets but still hesitate to take the trip, help their children or grandchildren, replace the car or enjoy the things they spent decades saving for.

Financial planning shouldn't simply be about maximizing the number on an investment statement.

Money is a tool. And retirement is one of the reasons you spent all those years accumulating it.

A good retirement income plan should help answer three questions: Can we afford our lifestyle? Can our money reasonably last? Can we enjoy what we've built without constantly worrying about running out?

When those questions have been addressed, retirement can begin feeling less like a financial equation and more like what it was supposed to be: the opportunity to Live a Full Life.