Retirement planning

Retirement Planning: Turn Your Savings Into Income That Lasts

Retirement planning guides, calculators and strategies for turning savings into income that lasts, from your income gap and Social Security timing to taxes and annuities.

Written by Jason Caudill, MBA Reviewed by Bill Cardwell, CFP® Updated October 18, 2026

How much income will I need?
When should I claim Social Security?
What should I do at my age?
How do I keep taxes down?
Run my numbers
Get a free quote

What is retirement planning?

Retirement planning is the work of turning what you have saved into income that covers your expenses for as long as you live. The core question is not “how big is my number?” but “how much of my spending is covered by guaranteed income, and how do I fill the rest?”

Rules of thumb are a fair starting point, but they all assume your income comes from investments:

The 80% rule: replace about 80% of your pre-retirement income.
The 4% rule: withdraw 4% of your portfolio in year one, then adjust for inflation.
The 25x rule: save about 25 times your annual retirement expenses.

None of them account for Social Security, pensions or annuity income. If guaranteed income covers most of your bills, you may need far less saved than these rules suggest. If it covers very little, you may need more.

Find your income gap in three steps

Estimate annual expenses

Housing, food, transportation, healthcare, insurance, travel and any debt payments. Slightly overestimating is safer than underestimating.
Add up guaranteed income

Social Security, pensions, annuity income and other predictable cash flow such as rent. This income keeps coming regardless of the market.
Subtract to find the gap

Annual expenses minus guaranteed income equals your income gap: the amount your savings must produce each year.

Example	Savings	Expenses	Social Security	Income gap
Couple with a larger nest egg	$500,000	$60,000/yr	$30,000/yr	$30,000/yr
Single retiree, modest savings	$100,000	$40,000/yr	$25,000/yr	$15,000/yr

Both are hypothetical. In the first case, a MYGA ladder, an income annuity or a mix of withdrawals and guaranteed income could close the gap. In the second, the portfolio is too small to lean on withdrawals alone, so converting part of it to lifetime income often makes more sense.

Build your retirement paycheck

Most durable plans stack income in three layers, so a bad market year never touches the money that pays the bills.

Foundation, guaranteed income: Social Security, pensions, immediate annuities and income riders. Goal: cover essential expenses.
Middle, flexible income: IRA and 401(k) withdrawals, interest from bonds, CDs and MYGAs. Goal: cover discretionary spending.
Top, growth and legacy: stocks, real estate and business interests. Goal: inflation protection and money for heirs.

Timing matters as much as the mix. Retiring into a market drop and selling to cover living costs can permanently shrink a portfolio, which is why the first five to ten years of income deserve the most protection.

When to claim Social Security

You can claim as early as 62 or as late as 70, and the choice sets your monthly check for life. For someone whose full retirement age is 67, the Social Security Administration’s figures look like this:

Claim at	Monthly benefit	Often fits
62	About 70% of the full benefit, for life	Poor health, or no other way to cover expenses
67 (full retirement age)	100% of the full benefit	Average health, a middle-of-the-road plan
70	About 124% of the full benefit, for life	Good health, a spouse who would rely on the survivor benefit

Waiting from 62 to 70 raises the monthly check by roughly 77%. The catch is that you need other income for up to eight years, and that is where annuities can help:

Deferred income annuity: buy now, with income starting when you need the bridge.
MYGA ladder: contracts that mature one after another until you claim.
Immediate annuity: income right away, so you can delay claiming and withdraw less from your portfolio.

Retirement planning by age

The right move at 52 is different from the right move at 72. Here is where to focus in each stage.

Age	Focus	Key moves
50 to 55	Catch up and assess risk	Catch-up contributions, check your Social Security earnings record, start reducing excess risk
55 to 60	Fine-tune and protect gains	Set a target date, run an income gap analysis, learn the 59½ rule, consider Roth conversions
60 to 65	Launch the plan	Pick a Social Security strategy, enroll in Medicare at 65, start withdrawals or lifetime income
65 to 75	Manage income and risk	Review withdrawals yearly, adjust for inflation, plan for required minimum distributions
75 and up	Simplify and plan your legacy	Manage RMDs, consider qualified charitable distributions, update your estate plan and beneficiaries

Special situations

Retiring early: plan for 30 to 40 years of income, no penalty-free IRA access before 59½ (with exceptions such as the Rule of 55 and 72(t) payments) and no Medicare before 65.
Divorced: retirement accounts may be split by a QDRO, and you may qualify for benefits on an ex-spouse’s record if the marriage lasted 10 years.
Widowed: avoid big, irreversible decisions right away, and check your survivor benefit timing before claiming.
Single: there is no spousal safety net, so covering essential expenses with guaranteed lifetime income matters more.
Women: women tend to live longer and often have career gaps, so plan for a longer retirement and a smaller benefit record.

Keep more of it after taxes

Where you hold money decides how it is taxed when it comes out, so the order you draw from accounts matters.

Taxable accounts: brokerage, savings and non-qualified annuities. Only gains are taxed.
Tax-deferred accounts: traditional IRAs, 401(k)s and qualified annuities. Every dollar out is ordinary income.
Tax-free accounts: Roth IRAs and Roth 401(k)s once the rules are met, and HSAs for medical costs.
Roth conversions: often cheapest in the low-income years between retiring and starting Social Security or RMDs.
Required minimum distributions: start at 73, or 75 if you were born in 1960 or later. A QLAC can shrink them.

Where annuities fit in a retirement plan

An annuity is not a whole plan. It is a tool for the specific risks a portfolio cannot handle on its own: outliving your money and a market drop at the wrong time.

MYGAs: a guaranteed rate for a set term, a CD alternative and a natural ladder rung. Today’s best rate is 7.10%.
Fixed index annuities: growth tied to an index with no market losses, plus optional lifetime income riders.
Immediate annuities: a lump sum becomes a pension-like paycheck for life.
Deferred income annuities: income that starts later, for longevity or a Social Security bridge.

Get a free quote Compare fixed annuity rates

Run your own numbers

No contact details required. Every calculator runs in your browser.

10 retirement planning mistakes to avoid

Claiming Social Security too early: a permanent cut of up to 30% that also lowers a spouse’s survivor benefit.
Underestimating how long you’ll live: cover essential expenses with income that lasts for life.
Ignoring sequence of returns risk: protect the first years of withdrawals from a market drop.
Skipping healthcare costs: Medicare does not cover everything, and long-term care is separate.
Too much in stocks at the start: shift toward stable assets as your retirement date nears.
No written plan: without one, decisions get made on emotion.
Paying too much in fees: fee-free products and low-cost funds leave more for you.
Forgetting inflation: a 25-year retirement needs some income that grows.
Not planning as a couple: decide Social Security, pension and annuity options with survivor income in mind.
Trying to time the market: a ladder and a set withdrawal plan remove the guesswork.

Every one of these comes back to the same idea: good retirement planning puts guaranteed income under your essential expenses first, then lets everything else do its job.

Frequently asked questions

How much money do I need to retire?

It depends on how much of your spending guaranteed income already covers. Add up your expenses, subtract Social Security, pensions and annuity income, and the gap is what your savings must produce each year. See the income gap analysis for the full method.

When should I start taking Social Security?

Claiming at 62 pays about 70% of your full benefit for life, while waiting to 70 pays about 124% if your full retirement age is 67. Delaying usually makes sense if you are healthy and can cover the gap with savings or an annuity, especially for the higher earner in a couple. See Social Security optimization.

Is the 4% rule still valid?

It is a reasonable starting point, but it ignores taxes, guaranteed income and the order of market returns. Many retirees cover essential expenses with guaranteed income first, then use a flexible withdrawal rate on the rest.

Can I retire early at 55 or 60?

Yes, but you need to bridge to Social Security and to Medicare at 65. The Rule of 55 and 72(t) payments can open retirement accounts early without the 10% penalty. See the 59½ rule for the details.

What happens if I outlive my savings?

This is longevity risk. Social Security and lifetime income annuities keep paying no matter how long you live, so covering essential expenses with them removes the risk for the bills that matter most. Compare current income annuity rates.

Are annuities a good idea for retirement?

They are insurance contracts, not investments, and they solve two specific problems: running out of money and a market drop at the wrong time. They work best for part of your savings, alongside other assets. See the best annuities for retirement.