4 steps for women to optimize retirement income planning 

At some point in their lives, nearly 90% of women will be solely responsible for making their household’s financial decisions.^{Disclosure 1} Yet, in more than two-thirds of affluent households across the nation, men continue to act in a primary financial decision-making capacity.^{Disclosure 2}

If thus far you’ve steered clear of getting involved in the financial conversation, now’s the time to pull up a chair. And your Truist Wealth advisor can serve as a valuable resource in better understanding your retirement income options, as well as creating a plan that accurately reflects your needs, wants, and financial values. The following four steps can help prepare you for that conversation:

1. Imagine your retirement

The things you want to do in retirement—as well as your general health—will dictate how much income you’ll need. For many people, retirement has three distinct stages; each with differing financial needs:

• Early: Newfound freedom and good health open up a world of opportunities to travel extensively and to pursue new hobbies. Especially in the first few years, your income needs during this stage of retirement will likely be high.
• Middle: Over time, as the ‘newness’ of retirement wears off, you may find yourself staying closer to home and spending more time with family and close friends. Often, these middle years of retirement will require significantly less income.
• Late: As we continue to age, the likelihood of facing major medical issues (with correspondingly high out-of-pocket costs) increases. Even though other expenses may be low, income needs during this stage may steadily rise.

When you decide to leave the workforce will also have a tremendous impact on your retirement income. Working just a couple of extra years not only provides an opportunity to save more, it allows your savings more time to grow before you begin drawing income. That’s why it’s important to have open conversations with your partner and family about when you plan to retire, what you imagine doing for pleasure, and whether you’re considering a ‘second act’ career.

2. Identify your sources of income

After decades of saving and investing, you’ll likely have multiple sources of income when you begin retirement. Some will be guaranteed (e.g., Social Security, pensions, and annuities), while others will be subject to market fluctuations (traditional 401(k)s and IRAs, taxable savings and maybe a rental property). Converting all of these sources into income can be complicated. So start by assessing all of your accounts, including those still held with previous employers. For simplicity’s sake, consider consolidating accounts where possible. Because different types of accounts have different tax rules, however, it’s important to consult a tax professional to understand how and when it makes sense to withdraw from each type. Your Truist Wealth advisor can then help you create an income plan that maximizes your opportunity to achieve your various retirement goals.

3. Revisit your investment strategy

How you invest your money depends on where you are in your financial journey. Early in retirement, consider continuing to invest the portion of your portfolio for growth. Keep in mind you’ll likely spend decades in retirement—so you can afford to take on more risk with assets you won’t need for another 10 or 20 years. As you age, however, you’ll want to gradually invest more conservatively, to preserve the assets you’ve accumulated. Your advisor can work with you to create an investment strategy that helps better insulate your portfolio from common retirement risks (longevity, inflation, and market volatility).

4. Expect the unexpected

Thoughtful planning is the key to retirement success. But you also need to be ready to change course should life throw you a curveball. Sudden, unexpected expenses—such as medical issues and the cost of treatment—can put a strain on retirement income. And given the longer average life expectancy of women, long-term care and how to pay for it should be a top-of-mind consideration. Think too about how family dynamics might impact your retirement. The needs of aging parents, ‘boomeranging’ children, divorce, or widowhood can all alter your retirement income needs.