Retirement, the milestone you’ve been working toward and dreaming about for years, is almost here.
Many people expect retirement to make their finances simpler. After years of earning, saving, and investing, it’s easy to think the big decisions are over. You might also think you only need a financial advisor before you retire, but that’s not always true. Retirement brings new questions, so planning still matters after you stop working.
You’ll still face financial questions in retirement, but they’ll be different. Your income affects your taxes. Withdrawals can raise your Medicare premiums. The timing of Social Security changes your cash flow. Required minimum distributions can move you into a higher tax bracket. These decisions are connected, so helping one area can sometimes hurt another.
A lot of people look for a financial advisor as they approach retirement or soon after. Planning doesn’t end when you stop working. Instead, it shifts from saving to creating steady income and making sure your choices fit together.
Retirement brings new financial questions to answer
Financial planning is usually simpler while you're working. Your paycheck comes in regularly, retirement contributions happen automatically, and your employer handles most of the tax withholding.
Retirement changes your routine. When your paycheck stops, choices that once seemed separate start to affect each other, sometimes in ways you might not expect. That’s when planning your retirement income becomes more important.
For years, most people live off their paychecks while their retirement accounts grow quietly in the background. In retirement, this flips. Instead of saving, you start using the money you’ve built up over time.
This change brings new pressure because your savings now have to last for an uncertain amount of time. A market drop early in retirement, unexpected medical bills, or large withdrawals can quickly change your plans.
That’s why retirement planning is about making your money last. The goal isn’t just to grow your savings, but to create steady income and stay flexible as things change.
Planning retirement income is often more complicated than people expect
Saving for retirement and living off your savings are very different. While you’re working, saving often happens automatically. In retirement, you have to turn your savings into income, and the order you take money out can affect your taxes, investment growth, and how long your money lasts. That’s why having a withdrawal strategy is so important.
Where should you take retirement income from first?
Many retirees have money in several types of accounts, such as traditional IRAs or 401(k)s, Roth accounts, taxable investments, bank savings, and Social Security. Each one is taxed differently, and taking money from the wrong account at the wrong time can mean higher taxes or less flexibility later.
For example, if you take a lot of money from tax-deferred accounts early in retirement, your taxable income may go up and more of your Social Security benefits could be taxed. Large withdrawals can also raise your Medicare premiums if your income goes over certain limits. But if you avoid retirement accounts and only use taxable investments, you might run into other issues later, especially when required minimum distributions begin.
The goal is to create income that balances taxes, flexibility, and long-term stability.
When you withdraw money matters more than many retirees think
One of the biggest risks in retirement is taking out too much money too soon, especially if the market is unstable. If your investments lose value early in retirement, your savings can shrink faster because you’re still making withdrawals. Experts call this the sequence-of-returns risk, and it can have a big effect over time.
Two retirees with similar investment returns can have very different outcomes, depending on when they take withdrawals and how much they spend during market downturns. Someone retiring at 62 may need their savings to last 25 to 30 years, which changes how they should plan withdrawals.
A withdrawal strategy lays out how you’ll take income over time. The strategy determines which accounts to use first, how taxes will affect you, and how required minimum distributions might change what you keep. Taxes are important here too, since they can change with every decision you make.
Taxes can be one of your biggest expenses in retirement
Many retirees spend years thinking about investment risk but don’t pay much attention to taxes. While you’re working, taxes are usually taken out automatically. In retirement, your income might come from Social Security, IRA withdrawals, pensions, investments, and required minimum distributions, all in the same year. Each source may seem simple by itself, but together they can lead to a bigger tax bill than you expect. This is especially true when Social Security is involved.
Your Social Security benefits might be taxable
Many retirees are surprised to learn that Social Security benefits can be taxed. The IRS uses a formula called “provisional income” – your adjusted gross income, tax-exempt interest, and half of your Social Security benefits – to determine whether your benefits are taxable.
If you file taxes as a single person, up to 50% of your Social Security benefits may be taxable if your provisional income is between $25,000 and $34,000. Above $34,000, up to 85% may be taxable. For married couples filing jointly, the limits are $32,000 and $44,000. If Social Security is your only income, your benefits are usually not taxed.
For tax years 2025 through 2028, taxpayers age 65 or older may qualify for an additional federal income-tax deduction of up to $6,000 per person, or up to $12,000 for a married couple filing jointly when both spouses qualify. The deduction phases out at higher income levels.
The income limits for Social Security taxes haven’t changed in decades, and because they’re not adjusted for inflation, more retirees end up paying taxes on their benefits over time, even if their income doesn't increase much.
Required minimum distributions can add to your tax burden
Required minimum distributions, or RMDs, often surprise retirees. Once you reach a certain age, the IRS requires you to take yearly withdrawals from most tax-deferred accounts, like traditional IRAs and many employer plans. These withdrawals are usually taxable.
According to the SECURE 2.0 Act, RMDs begin at age 73 for people born between 1951 and 1959, and at age 75 for those born in 1960 or later. Taking larger withdrawals can make more of your Social Security taxable, push you into a higher tax bracket, and increase your Medicare Part B and Part D premiums through the IRMAA surcharge.
In 2026, IRMAA surcharges will apply to single filers with income over $109,000 and married couples filing jointly with income over $218,000. These limits are based on your tax return from two years earlier, so a high-income year now can affect your Medicare premiums later. For 2026, the lookback year is 2024.
Many retirees don’t think about RMDs until they have to take them. By then, some planning options are no longer available. Choices you make in your 60s, like converting part of a traditional IRA to a Roth account, can help reduce tax pressure later. Those choices also show why planning should start before tax bills arrive.
Tax planning is different from tax preparation
Tax preparation means reporting what’s already happened. Retirement tax planning is about making decisions in advance. Roth conversions, withdrawals, and realized capital gains all affect your taxes for years. Your withdrawal plan affects your taxes, taxes affect Medicare premiums, and Medicare costs impact your retirement cash flow.
Retirees often focus more on investment returns because they’re easy to track. Tax efficiency gets less attention, even though it can make a big difference in how much money you have to spend. This is one reason why planning should go beyond just investments.
How to find the right financial advisor for retirement
Many people believe that financial planning ends when you stop working and set up your income sources. But, in reality, you’ll continue to have to make decisions. Markets rise and fall, your spending and healthcare needs change, and tax laws can shift. A withdrawal plan that worked at 65 might need adjustments at 75. That’s why having the right advisor matters as your needs change.
For many retirees, the question shifts from “Do I need someone to manage my investments?” to “Do I need a financial advisor who can help me make these decisions?” The real value is having someone who can bring all the pieces together into a clear plan.
Not all financial advisors focus on retirement income planning. For retirees and those nearing retirement, managing investments is only one part of the picture. Here are some other things to look for: the right experience, tax awareness, Social Security guidance, a broad perspective, and clear communication.
Retirement income experience: Creating income from your savings is different from helping someone save for retirement. Ask your advisor about their experience with distribution planning.
Tax awareness: Your advisor doesn’t need to prepare your tax returns, but they should know how things like withdrawals, Roth conversions, and Social Security timing affect your taxes each year.
Social Security guidance: The timing of your Social Security claim can affect your household income for years, especially if you’re married. This is a planning decision, not just paperwork.
A broader view: Retirement planning works best when you consider income, taxes, healthcare costs, and investments together, not separately.
Communication style: A financial plan only works if you can understand and use it. You should feel comfortable asking questions, reviewing decisions, and speaking up if something isn’t clear.
Many retirees find that confidence in retirement comes from having a process to review decisions before acting, not from knowing all the answers. Getting a second opinion can help, even if you know a lot about finances. This is especially true when taxes, withdrawals, and long-term planning overlap.
Retirement is a new stage for your finances, not the end of planning
Retirement ends your career, but not your financial decisions. You still need to manage your income and keep up with taxes. Your withdrawal choices affect your future options. Healthcare costs, market changes, and new goals will all shape your finances over time.
Most retirement mistakes happen because of a series of small choices, not one big error. Having a way to review your decisions and someone to help can make a big difference.
At Allegiant Wealth Strategies, we help retirees and those nearing retirement in the Battle Creek, Kalamazoo, and Portage areas gain clarity about retirement income, taxes, Social Security, and long-term financial planning.
If you want a clearer picture of how all these pieces fit your situation, we’d be happy to meet with you. Schedule a complimentary consultation by calling 269-218-2100 or reaching out through our website.
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to ensure our information is accurate and useful, we recommend that you consult a tax preparer, professional tax advisor, or lawyer. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful.
Allegiant Wealth Strategies offers securities through Cetera Wealth Services, LLC, member FINRA/SIPC. Advisory services offered through Cetera Investment Advisers LLC, a Registered Investment Adviser. Cetera is under separate ownership from any other named entity. Allegiant Wealth Strategies has offices in Battle Creek and Portage, Michigan, from which we serve Calhoun County, Kalamazoo County, and Kent County (Grand Rapids). The Allegiant Wealth Strategies team offers no-obligation financial planning consultations; call 269-218-2100.