Retirement Income Planning: Where to Start

For thirty or forty years, the goal was simple: save more. Every raise, every bonus, every year — put more into the 401(k), max out the IRA, watch the balance grow. Then retirement gets close, and the question flips. It's no longer “how much can I save?” It's “how do I turn what I've saved into money I can actually live on?”

That second question is what retirement income planning answers, and it's a genuinely different problem than accumulation. A savings plan has one job: grow the number. An income plan has to answer where the money comes from each month, in what order you draw from which accounts, how taxes and required withdrawals affect that order, and what happens if markets drop the year you need to take money out. None of that comes up while you're still working and saving. All of it comes up the day you stop.

Your Retirement “Paycheck” Isn't One Thing — It's Several

A paycheck from an employer is one deposit from one source. A retirement paycheck is usually assembled from several: Social Security, maybe a pension, required withdrawals from tax-deferred accounts once you reach RMD age, and discretionary withdrawals from taxable or Roth accounts to fill in the rest. Each of those sources has its own tax treatment, its own timing rules, and its own tradeoffs.

The planning question isn't just “do I have enough total.” It's “how do these pieces fit together month to month, and in what sequence, so the income is reliable and the tax bill isn't larger than it needs to be.” That's a coordination problem, not a savings problem, and it's the first thing that has to shift in how you think about the money.

How Much Can You Draw Without Running Out?

This is the question most people actually mean when they ask about retirement income, and there's no single number that works for everyone. You'll see rules of thumb discussed publicly — a 4% starting withdrawal rate is the one most people have heard of — but a rule of thumb is a starting point for a conversation, not a plan. The right withdrawal rate for you depends on how long your money needs to last, how your portfolio is allocated, what other income sources you have, and how much flexibility you have to adjust spending in a down market.

There isn't a way to guarantee any specific withdrawal rate will work over an unknown future — markets and lifespans are both uncertain, and no advisor can promise otherwise. What a good income plan does is stress-test a withdrawal strategy against a range of outcomes, not just the average one, so you know how much flexibility you actually have before you need it.

Where the Income Actually Comes From

Most retirement income plans draw from some combination of the following, and the timing of each one is its own decision:

• Social Security — when you claim changes your monthly benefit for the rest of your life, and coordinating claiming age with a spouse adds another layer. (We'll cover claiming strategy in more depth in an upcoming post.)
• Pensions, if you have one, which usually come with their own set of one-time, irreversible elections.
• Required minimum distributions (RMDs)from traditional IRAs and 401(k)s, which the IRS currently requires you to begin by age 73 — a schedule set by the IRS, not by you. (Source:IRS, “Retirement Topics — Required Minimum Distributions (RMDs),” updated April 8, 2026. More on RMD rules in an upcoming post.)
• Medicare-related decisions, which aren't income exactly, but interact directly with your income plan since certain income levels trigger higher Medicare premiums. (Also covered in an upcoming post.)
• Discretionary withdrawals from taxable brokerage or Roth accounts, which you have the most control over — and which is where sequencing matters most.

The Order You Draw From Accounts Matters

Here's the part that surprises people: two households with identical account balances can end up with very different after-tax outcomes in retirement, purely based on the order they draw from taxable, tax-deferred, and Roth accounts. Draw from the wrong bucket in the wrong year and you can push yourself into a higher tax bracket, increase what you pay for Medicare, or accelerate how fast a tax-deferred account gets taxed down the road. Draw thoughtfully, and you can smooth out your tax bill across retirement instead of taking it all at once.

There's no universal “always do this first” answer, because it depends on your specific mix of account types, your other income sources, and what your RMDs will look like once they start. It's a plan that has to be built around your numbers, not a generic sequence applied to everyone.

Where to Go From Here

Retirement income planning isn't a single decision — it's a set of interlocking ones: how much to withdraw, in what order, from which accounts, coordinated with Social Security and Medicare timing. Getting the pieces to work together is the job of a plan, not a rule of thumb.

If you're within a few years of retirement and haven't mapped out where your income will actually come from month to month, that's the right time to start — before the decisions in front of you become the ones you're making under pressure.

Derryrush Wealth Management is a fee-only fiduciary registered investment adviser based in West Sayville, NY, serving pre-retirees, business owners, and individuals navigating divorce across Long Island. If you'd like to talk through what a retirement income plan would look like for your specific situation, schedule a complimentary introductory conversation.

Derryrush Wealth Management LLC is an SEC-registered investment adviser. Registration does not imply a certain level of skill or training. James Connolly, Certified Divorce Financial Analyst®, is the founder of Derryrush Wealth Management LLC.

Information presented is for general educational purposes only and does not constitute personalized investment, tax, or legal advice. It does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Past performance is not indicative of future performance. Withdrawal rates, tax treatment, and account sequencing depend on individual circumstances and are not guaranteed to produce any particular result. Consult a qualified financial adviser, tax professional, and/or attorney before implementing any strategy discussed herein.

This article reflects our understanding of applicable tax law, program rules, and other facts as of its publication date. These are subject to change, sometimes with little notice, and we do not undertake to update this article afterward. Confirm any specific figure, age, rate, or deadline referenced here is still current before relying on it.