Saving effectively for retirement is just one part of the journey. Turning your nest egg into a consistent paycheck is essential to ensuring financial stability throughout your retirement years.

This monthly retirement series offers actionable insights and discussions designed to empower you as you approach this significant life phase.

While saving is often the primary focus in retirement planning, the challenge lies in effectively converting those savings into a sustainable income.

Christine Benz, a leading expert in personal finance and retirement strategies, recently shared her insights on this topic. Her key takeaway? There isn’t just one way to approach retirement planning; it’s about finding what works best for you.

PERSONALIZED PLANS ARE KEY

In her bestselling book, “How to Retire: 20 Lessons for a Happy, Successful, and Wealthy Retirement,” Benz gathers insights from top retirement experts, highlighting that a successful retirement plan should align with your unique financial and emotional needs.

“The best retirement income strategy will resonate with you psychologically,” Benz notes. “For instance, if you prefer security, an annuity might be appealing, providing a steady cash flow.”

Conversely, some individuals might desire more control over their assets. “The diversity of expert opinions on retirement income planning is quite striking,” she emphasizes.

SHIFTING MINDSETS: FROM SAVING TO SPENDING

Many retirees struggle with the transition from saving to spending. To ease this shift, Benz recommends practicing withdrawal strategies before retirement.

“It’s beneficial to gradually acclimate yourself, so your first withdrawal isn’t on day one of retirement,” she advises.

If budgeting isn’t your forte, now’s a great time to start. Benz suggests a reverse budgeting method, where you first determine your savings goal, then freely spend what's left each month. “That’s the strategy my husband and I follow,” she shares.

They became more deliberate about budgeting after consulting a financial advisor, who guided them in understanding their major spending categories and how they might evolve during retirement.

“Reverse budgeting is an excellent practice for savers,” she says. “As retirement approaches, gaining clarity on your spending habits becomes increasingly important.”

CHECK YOUR PROGRESS If you’re gearing up for retirement, consider downloading a free Retirement Income Planning Starter Guide.

IDENTIFYING RETIREMENT BLIND SPOTS

Research indicates that only about a third of individuals aged 45-75 have a comprehensive retirement plan. Benz highlights that a lack of clear withdrawal strategies can be a significant blind spot.

Some retirees may underspend out of fear of depleting their funds, while others might overspend too quickly.

Her recommendation? Don’t navigate this alone.

“Even if you’re not fully committed to hiring an advisor, seek a second opinion on your plan,” Benz advises. “Address these matters early, when you can still make necessary adjustments to your budget and withdrawal strategy.”

WOMEN AND RETIREMENT PLANNING

Women often face unique retirement challenges. With longer life expectancies, financial resources must last longer. Additionally, women are more likely to take breaks for caregiving, impacting their lifetime earnings and savings.

Early saving is vital, but staying engaged in the workforce as long as possible also matters.

“Taking a break in your late 50s or early 60s for caregiving can complicate re-entering the workforce,” Benz explains. “It puts added pressure on your savings and may influence decisions regarding Social Security claims.”

TAKING ACTION: SIMPLE STEPS TO GET STARTED

If the thought of retirement feels daunting, you’re not by yourself. However, there are actionable steps you can implement now to feel more equipped.

Begin by analyzing your income: Calculate potential Social Security benefits at various claiming ages. Include any guaranteed income such as pensions or annuities, and conservatively estimate your investment returns. “Check if these sources combined meet your budget,” Benz suggests.

Make adjustments as necessary: If a significant gap exists, consider your options. Can you modify your retirement budget? Work longer? Increase current savings? Small changes can yield substantial results.

Consult a professional: “Seek feedback on your retirement strategy to gain reassurance and clarity,” Benz advises. Before your meeting, familiarize yourself with options using the free Retirement Income Planning Starter Guide. It outlines essential discussion points to ensure you’re on track for the retirement you desire.

Lastly, don’t hesitate due to embarrassment. “Advisors are accustomed to various situations and can help you address any shortfalls without judgment.”