When should I build a retirement income plan?
Ideally five to ten years before you retire, so you have time to adjust. It is still useful at any age, including after you retire.
Planning your next steps
What Is a Retirement Income Plan?
A retirement income plan is a written picture of how you will pay your bills after you stop working. It lists the income you expect each month, such as Social Security, pensions and annuity income, shows how much must come from savings, and plans for risks like market drops, inflation, taxes and living a long time. It turns a pile of savings into a monthly paycheck plan.
Written and reviewed by Dan Hopwood, Retirement Income Specialist · Retirement Income Knowledge Center · Last reviewed
The main parts of a plan
- Your expected monthly spending, split into essential and lifestyle costs.
- Every recurring income source and when it starts.
- How much must come from savings each month, and from which accounts.
- How taxes affect each income source.
- How the plan handles market losses, inflation, healthcare costs and a long life.
- What changes for a surviving spouse.
Savings plan versus income plan
While you work, the goal is usually to grow savings. In retirement, the goal shifts to turning savings into steady, lasting income. The questions change from how much will I have to how much can I spend each month, and for how long.
A simple timeline example
Illustrative couple retiring at 64
- Ages 64–66
- Savings cover most spending
- Age 67
- One spouse starts Social Security
- Age 70
- Other spouse starts a larger Social Security benefit
- Age 73 and later
- Required withdrawals begin from tax-deferred accounts
Illustration only. Claiming ages and RMD start ages depend on your birth year and choices.
Review it regularly
A plan is not a one-time event. Review it at least once a year and after big life changes such as a health event, the death of a spouse, a move or a large market move.
What a basic retirement income plan covers
| Question | Why it matters |
|---|---|
| What do I need each month? | Sets the target |
| What income is guaranteed? | Shows the reliable floor |
| How big is the gap? | Shows what savings must cover |
| What happens if one spouse dies? | Tests the plan for the survivor |
Educational checklist, not individualized advice.
See your own monthly retirement income picture
Enter the income you want and the income you expect from Social Security, pensions and other sources. The calculator estimates any monthly gap in about two minutes.
Open the Retirement Income Gap CalculatorFree • Results on-screen right away • No email required
Common questions
What is the first step?
Estimate your monthly spending and gather your Social Security estimate and any pension statements. Comparing the two shows how much your savings need to supply.
Does a plan have to include annuities?
No. A plan can use many income sources. Some people add annuity income to cover essential bills, and others do not. It depends on your needs and comfort with risk.
What should a retirement income plan include?
A basic plan lists your expected monthly spending, each income source and when it starts, how savings will fill any gap, and how you will handle taxes, inflation and healthcare costs. It should also cover what happens to income if one spouse dies. Reviewing it every year keeps it current.
Is it too late to make a retirement income plan at 70?
No. Many decisions still matter at 70, including how you draw from savings, required minimum distributions, taxes, survivor income and long-term care. Planning at any age can clarify where your monthly income will come from.
How should I plan retirement income if I retire at 60?
Retiring at 60 usually means bridging years before Medicare at 65 and before Social Security's larger benefits. You will likely need savings to cover both living costs and health insurance for those years. Planning the order you draw from each source becomes especially important.
What changes in my retirement income plan at 65?
Medicare eligibility usually begins at 65, which can change your healthcare costs a lot. It is also a common time to decide whether to claim Social Security or keep waiting. Medicare premiums can be affected by your income from two years earlier.
What should I review at 67, my full retirement age?
At full retirement age you can claim your full Social Security benefit, and the earnings limit on working no longer applies. You can also keep delaying to earn larger checks up to 70. It is a good time to recheck your income gap with your actual benefit amount.
What retirement income questions matter at 75 and beyond?
Later in retirement the focus often shifts to required withdrawals, rising healthcare and care costs, and making sure a surviving spouse is covered. Simplifying accounts and income can also help. Keeping beneficiary designations current matters at every age.
Authoritative sources
This page is educational and general in nature. RetirementLeverage™ and Retirement Planning Store, Inc. do not provide individualized investment, securities, tax, or legal advice; please consult a qualified tax professional or attorney about your own situation. Insurance products and services may not be available in every state, and any guarantees are subject to the financial strength and claims-paying ability of the issuing insurance company.