Weekend Reading: The Decumulation Drawdown: How Spending Became the Big Dilemma in Retirement

This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
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In our Retire With Purpose planning framework, we cover four key pillars of your financial L.I.F.E., one of which is Income. A top concern driving many of the families we meet with to seek retirement planning guidance is building an income stream that lasts their lifetime. Between the depletion of pensions, surging inflation and extended longevity, it might feel more complicated than ever before to know how to responsibly spend your savings, not to mention extend your income to potential decades down the road.


The drawdown dilemma: Unlike the accumulation phase of retirement, which involves more focus on saving and investment returns, the decumulation phase is often more complex. Deciding how to pull your income sources together in the most tax-efficient, timely manner requires a strategic plan that thankfully, more of the retirement planning industry is shifting focus toward. Previous podcast guest, Wade Pfau, oversees the Retirement Income Certified Professional (RICP®) curriculum at The American College for Financial Services, where an emphasis on Social Security, Medicare, long-term care and housing is placed in the realm of retirement withdrawal strategies.

A personalized approach: When it comes to retirement income and spending, there is no one-size-fits-all plan of action. Mixing income sources to maximize the likelihood of replacing your paycheck is key. This might mean utilizing Roth IRA withdrawals until they reach a low enough tax bracket that warrants drawing down a traditional IRA, or pairing Social Security benefits with vetted annuity options.

Beyond status-quo strategies: Above all, you want to ensure your income strategy is truly customized to you and aligns with your values and living standards. Going beyond the status-quo will set your retirement plan (and your retirement experience) apart. This phase of life requires a different type and level of planning, so don’t do the bare minimum.