Retirement Income Planning

Without a consistent source of income, your quality of life during retirement is threatened, even to the point where retirement is no longer viable. Income planning is a part of the overall retirement planning process, with a specific focus on the financial instruments and strategies that provide sufficient resources to retire safely.

The main idea objective in income planning is to identify how current sources of income can be transitioned into a robust source of retirement funds. This may involve many types of funds—savings, investments, 401(k) accounts, IRA accounts, cash value life insurance policies, and annuities. The best portfolio mix for you will depend on your unique situation and specific retirement goals.

While you should be concerned with when you can retire and how much income you’ll need, you should be aware that your retirement income resources may have to stretch further than in previous generations. Because of longer life expectancies and inflation, many retirees face a risk of outliving their money. This can cause retirees to reduce their retirement lifestyle, return to work, or worse, be unable to cover emergencies.

At Beckett Financial Group, we help you develop an income plan that addresses your specific needs and provides a robust source income during retirement.

What Phase of Retirement Planning Are You In?

The accumulation phase generally occurs between ages 35 to 55. This is when you begin to hit your stride as an earner. While retirement may be a few decades away for you, it is in your interest to begin accumulating resources. In addition to taking advantage of employer-sponsored plans, you may wish to explore vehicles with a cash value component, such as certain life insurance policies and annuities.

In the preservation phase, your accounts may be maturing. With retirement only a short few years away, it’s in your interest to take stock of your assets and drive them toward your ideal retirement scenario, making sure to limit liabilities.

In the distribution phase, you are drawing income from your retirement assets. However, even this phase can be subject to planning and dynamic changes. Keep a good feel for how your assets are working for you and your ideal retirement lifestyle. And remember that good retirement planning doesn’t stop in retirement.

The Phases of Retirement Planning

The main objective in retirement planning is to reduce risk while accumulating a sustainable source of income that gives you financial independence.  Since time is such a significant factor in retirement planning, you should ideally begin the planning process as early as possible. There are three basic phases to retirement and income planning. They are accumulation, preservation, and distribution.


During the accumulation phase, you should look at the many different ways you may be able to accumulate retirement funds. This can include looking at financial products, savings accounts, alternative investments, and more—really whatever is appropriate for you and your risk tolerance. Some solutions, such cash value life insurance, and annuities can accumulate funds tax-deferred, meaning that your growth compounds more before facing a tax liability. This process will usually start with an assessment of your current assets, income, and your readiness-to retire based on your ideal retirement lifestyle. This is also a time to consider taking advantage of employer-sponsored retirement programs, such as 401(k) and IRAs.


The preservation phase often starts a few years preceding retirement. During this phase, you should evaluate your risk tolerance, retirement plan performance, and changing financial needs. You should also be aware of what, if any, tax liabilities your assets will face once you trigger distributions. You may find that is to your advantage to convert a sum into a certain financial product or that delaying certain accounts can increase your overall retirement resources. You should also evaluate how your assets are structured.


During the distribution phase, you begin to draw on your retirement income. You may have completely transitioned into retirement or continue to work in a limited capacity. As you take distributions, you’ll want to consider if the resources still match your retirement needs.

No matter what phase you are in, regular review with a financial professional is crucial in ensuring a sustainable and financially independent retirement.