Navigating Retirement Income: A Personalized Approach to Your Financial Future
Retirement Planning
Retirement planning advice places great emphasis on saving enough, but there’s another crucial element to consider: spending. While a retirement savings plan is essential to building a nest egg, a retirement spending plan helps ensure you can maintain the lifestyle you want with as little stress as possible.
As you transition from your working years to retirement, one of the most important questions you’ll face is: “How do I create a sustainable income stream that will last throughout my retirement?” It’s a question we’ve helped many clients answer over the years. With thoughtful planning and a personalized approach, you can create a retirement income strategy designed to support your long-term financial needs and goals.
Beyond the Rules of Thumb
You’ve likely heard of the 4% rule—a strategy that suggests withdrawing 4% of your retirement portfolio in the first year, then adjusting that amount annually for inflation. While this approach offers simplicity and has served as a helpful starting point for many retirees, it has limitations. Originally developed using historical data from 1926 onward (and then revised as market and economic realities evolved), the 4% rule was designed for a specific scenario: a 30-year retirement period with a balanced portfolio of stocks and bonds.
However, your retirement isn’t a historical backtest—it’s unique to you, your goals and your dreams. Furthermore, market conditions, inflation and your spending needs will likely fluctuate throughout retirement. So, let’s explore a few options.
Fixed-dollar withdrawals: These offer the predictability of a regular paycheck, taking the same amount each month regardless of market conditions. While this provides peace of mind, it doesn’t adapt to changing market environments or inflation, potentially putting your long-term financial security at risk.
Systematic withdrawal plans: With this approach you withdraw only the interest and dividends your portfolio generates, leaving the principal untouched. This conservative strategy reduces the risk of depleting your funds, but it may not provide sufficient income during periods of low market returns, potentially limiting your ability to maintain your desired lifestyle.
Other strategies: Some retirees are in the enviable position of having enough resources saved elsewhere to defer withdrawals from retirement saving accounts until the required age of 73, and they can then use IRS life expectancy tables to calculate annual required minimum withdrawals. This strategy allows for continued tax-free growth of those dollars and it can be coupled with using qualified charitable distributions (QCDs) to make gifts directly to IRS-approved charities. While limited to $108,000 in 2025 (indexed to inflation), this technique is an effective way to continue and even increase your philanthropy in retirement, reducing pretax income on gifts you otherwise might have made with after-tax dollars.
All these options come with unique considerations that must be weighed carefully against your individual circumstances.
Key Questions Your Strategy Should Answer
Before we dive into creating your personalized retirement income plan, it’s helpful to consider the fundamental questions any effective strategy should address:
- Will the strategy meet my goals? Does it allow me to maintain my desired quality of life, to finance travel or a hobby, to leave enough for my heirs, or to cover the purchase of a new home?
- How do I keep up with or outpace inflation?
- Will I have enough to cover medical expenses and end-of-life care?
- Will I be able to absorb a shock to the stock or bond market?
- Do I have a buffer for unanticipated expenses like replacing a car, a home repair or a lengthy hospital stay?
- How much liquidity will I have?
- How will my tax planning change when I start drawing down my retirement accounts?
- What are the risks and opportunities?
These questions highlight why cookie-cutter approaches could fall short. Your retirement income strategy needs to be robust enough to handle life’s uncertainties but flexible enough to adapt to changing market conditions.
Our Personalized Approach
At RWA, we believe there’s no one-size-fits-all solution to retirement income planning. That’s why we start with what matters most: understanding your unique situation, goals and concerns, which includes addressing the questions above. Our process begins with comprehensive cash flow planning, typically projecting three to five years ahead to establish a foundation for your retirement income strategy.
“One conceptual framework I often use with clients is to avoid stressing about budgeting,” explains Andrew Busa, director of financial planning for our Private Wealth division. “Instead, focus on the big picture—in retirement, how much can you reasonably spend? We can help figure out that variable with short- and long-term cash flow planning.”
We take your current spending patterns and project them into retirement, incorporating planned lifestyle changes along the way. Perhaps you’re aiming to travel more initially, downsize your home, or increase your charitable giving. We factor in these changes, along with potential end-of-life care needs, to create a comprehensive picture of your retirement expenses.
Our approach goes beyond simple withdrawal rate calculations. We examine all your income sources—Social Security, pensions, other savings, potential inheritances—and integrate them with your investment portfolio. Using our planning software, we assign projected returns to different asset classes and create a weighted average return for your total portfolio. Then we model various scenarios to help evaluate how your plan may perform under different market conditions.
Dynamic, Tax-Efficient Implementation
When it comes to generating your retirement income, we use a dynamic approach that adapts to changing circumstances. Rather than mechanically follow a predetermined withdrawal rate, we evaluate your needs on a year-by-year basis and make strategic decisions about where to source your income.
Tax efficiency plays a crucial role in this process. We typically prioritize withdrawals from taxable accounts first so cost basis can be recovered tax-free and capital gains receive favorable treatment. We generally preserve tax-deferred retirement accounts until required minimum distributions begin, with the goal of maximizing the tax-advantaged growth of these assets.
Asset location strategy becomes particularly important in retirement. Accounts you’ll draw from in the near term might be invested more conservatively, while accounts like Roth IRAs—which offer tax-free growth and no required distributions—might be invested more aggressively to help maximize long-term growth potential.
Frank Sennott, our senior director of family office financial planning, notes that this approach includes balancing “tactical year-by-year decisions with the strategic long-term view using our planning software. For optimal withdrawals, we aim to ‘come down the mountain’ in the smartest, most tax-efficient way.”
Ongoing Partnership
We recognize that retirement planning isn’t a “set it and forget it” endeavor. Your circumstances, the markets and tax laws will all change over time. That’s why we work with you throughout your retirement to regularly review and adjust your income strategy.
If market conditions suggest it’s time to rebalance by selling appreciated stocks, we’ll make that tactical decision. If bonds become more attractive during a market downturn, we might draw from that portion of your portfolio instead. These ongoing adjustments are intended to help protect your portfolio while also supporting your income needs.
Your Retirement, Your Way
The heart of retirement planning lies in aligning your financial resources with your personal vision of retirement. While money matters, a truly fulfilling retirement encompasses your social and emotional well-being as well as your financial security.
Remember, the “right” withdrawal strategy isn’t found in a textbook or a rule of thumb—it’s found in a plan that’s designed specifically for you, your goals and your circumstances. We can help you create that strategy and find the confidence to feel financially prepared for whatever retirement brings.
Our Latest Videos & Media Mentions
Chief Investment Officer Joseph “JP” Powers breaks down the Fed’s latest move, market reactions and why discipline matters in this moment. Click here to watch now!
Portfolio Manager and Director Jeremy Lehrer shares how to design portfolios intended to endure across various market cycles and help support your family’s legacy. Watch here.
Partner and Senior Wealth Advisor John Puetz outlines strategies designed to safeguard your family’s wealth from hidden risks. Watch here.
We’re excited to share that RWA has recently been recognized by local and national media. The Boston Business Journal ranked us as the eighth-largest RIA in Massachusetts in 2025, Barron’s put us at #29 on its list of the 2025 Top 100 RIA Firms and InvestmentNews named us a 5-Star RIA Firm for 2025.
The Boston Business Journal’s Largest Independent Investment Advisers in Massachusetts ranking was created and compiled by the Boston Business Journal and is based on each participating firm’s assets under management (AUM) as of July 15, 2025 (some firms provided AUM using a different date). No fee was paid to participate.
Barron’s Top 100 RIA Firms was awarded in September 2025 based on firm data from June 30, 2025. Barron’s verifies data submitted and tabulates the entries. No fee was paid to participate.
InvestmentNews’ 5-Star Firm for 2025 ranking was awarded in September 2025 based on firm data from January 1, 2023, through December 31, 2024. InvestmentNews created and tabulated the entries. No fee was paid to participate.
Are Private Investments Coming to Your 401(k)?
Investing for Retirement
In August, the Trump administration issued an executive order that may open the door for alternative investments—including private equity, real estate and cryptocurrency—to become options in employer-sponsored retirement plans like 401(k)s. This represents a significant shift from the traditional stocks, bonds and mutual funds most savers are familiar with, so it’s important to understand the opportunities and risks this change may bring.
To put this development in context, Americans currently hold $12.2 trillion in defined contribution plans like 401(k)s as of the first quarter of 2025, according to the Investment Company Institute. Meanwhile, U.S. private equity firms manage approximately $3.1 trillion in assets, representing a substantial alternative investment market that has historically been out of reach for most retirement savers.
As you might expect, the media and pundits have been sharing a wide range of views, from alarmist to exuberant. We think access to these investments will be an overall positive development though the implementation may involve some growing pains. An expanded investment universe is a good thing for investors—with it may come the need for more guidance for individuals hoping to navigate this wider array of options (which they can take or leave) on their own. Let’s dive in, starting with some of the risks involved.
Potential Risk Factors
While public market investments have seen fees compress over the years as transacting trades has become far more efficient, the hands-on nature of private investments means these typically carry higher fee structures than traditional mutual funds or ETFs—often significantly higher. These fees go toward covering the costs of deal sourcing, due diligence, and often multi-year engagement and oversight of the actual investments. As a result, management fees and performance-based charges may impact net returns over time.
There’s also the question of investment quality. While wealthy individuals and institutions often have access to top-tier private investment opportunities, the products eventually offered to 401(k) participants may not necessarily be the same caliber. There are only so many good companies to invest in, and with more dollars entering this part of the market it could water down the opportunity set. This risk is not unique to private investments—stock and bond mutual funds and ETFs also run the gamut from excellent to substandard.
The complexity of selecting quality private investment managers requires significant expertise and resources that individual investors typically don’t possess. But that’s where your RWA team can help.
Private Investment Opportunities
Historically, private market investments have been the domain of large institutional investors like university endowments and public pension funds. These sophisticated investors have long been drawn to the differentiated and enhanced returns that private investments can offer, going beyond what’s available in public markets. As more money has found its way to private markets, it has allowed companies to remain private longer (in some cases indefinitely) and still meet their growth goals without rushing to market through an initial public offering. This means those early and even some late-stage returns have gone to private investors, excluding individual retirement savers from these opportunities.
Take the technology and AI space, where public markets are increasingly dominated by a few mega-cap leaders such as NVIDIA, Microsoft and Google. Meanwhile, much of the next wave of growth is being captured in private markets. OpenAI recently raised funds at a $300 billion valuation and Anthropic was valued above $183 billion earlier this month—both are still privately held. These examples show how much growth and innovation is occurring long before companies reach the public stock market.
For this reason, the potential benefits in this space are compelling. Private investments often provide access to what experts call the illiquidity premium—the additional returns investors may receive for tying up their money for longer periods. For 401(k) participants, who are typically investing for decades until retirement, illiquidity may be less problematic than it would be for investors who might need on-demand access to their funds.
Additionally, private markets can offer exposure to sectors and investment strategies that are more conducive to long-term, less liquid investments like infrastructure. These options simply are not available in public markets, potentially improving overall portfolio construction and long-term returns. And just like in the mutual fund space, you can find skilled asset managers running private market offerings.
An Uncertain Timeline
We should note that this executive order won’t automatically add private investments to your 401(k) plan tomorrow. The order directs federal agencies to create a framework that would allow such investments, but individual employers and their plan administrators will ultimately decide whether to offer these options to their employees.
Plan sponsors have fiduciary responsibilities to act in their participants’ best interests, and they must carefully evaluate whether adding complex investment options serves their workforce well. Many employers may choose to stick with traditional investment menus, at least initially, given the additional complexity and potential liability these alternatives might introduce.
Allocating to Private Investments in Your Plan
We think greater access, overall, is a net positive for informed investors. Our best advice is to make sure you understand what you’re buying before putting your hard-earned retirement savings at stake.
If private investment options do become available in your workplace retirement plan, your RWA team can help you evaluate the choices and decide how much may be appropriate to allocate. This recommendation will take into consideration the quality of the options, how much they cost, and how they can potentially help you achieve your long-term goals.
Remember, if your plan gives you the chance to dip your toes into private markets, the fundamentals of successful long-term wealth-building remain unchanged: consistent contributions, appropriate diversification and reasonable costs. While private investments offer new opportunities, they are just one tool among many in building a secure retirement.
We’ll continue monitoring these developments and are here to help you navigate any changes that may affect your retirement planning strategy.
Ideas for First-Time Grandparents Seeking To Support Their Growing Family
Crafting a Legacy
In honor of Grandparents’ Day, which we celebrated earlier this month, we want to share some ideas for those welcoming their first grandchild to this world.
Becoming a grandparent opens an exciting new chapter filled with joy, precious moments and some important financial considerations. While you’re naturally focused on getting quality time with the little one and supporting your adult children as they adapt to parenthood, now is also an ideal time to thoughtfully plan how you can be there for your growing family emotionally, practically and financially.
Start With Open Conversation
Before making any financial decisions, have an honest conversation with your adult children about expectations and boundaries. Discuss how you’d like to help and what support they actually need. This coordination prevents misunderstandings and ensures everyone feels comfortable with the arrangement. Whether you’re considering regular child care, occasional babysitting or financial contributions, clarity from the beginning strengthens family relationships instead of straining them.
Review and Update Your Estate Plan
A new grandchild likely means it’s time to revisit your estate planning documents. Work with your attorney and other estate professionals to review your will, trusts and beneficiary designations to determine if you want to make changes.
Think about how you want to support your grandchild’s future needs, such as education expenses or milestone gifts at certain ages. Some grandparents find comfort in adding thoughtful guidance within their estate documents—it’s a way to share values and wisdom even when you’re no longer present to offer it personally.
Consider how family assets like vacation homes or other property might factor into your grandchild’s future, and discuss potential generation-skipping tax implications with your tax advisor, particularly if your estate might be subject to federal estate taxes.
Explore Meaningful Financial Gifts
You have numerous ways to provide financial support that can grow with your grandchild. Education-focused 529 plans allow tax-advantaged growth and can be used for qualified education expenses from kindergarten through college. For families subject to estate taxes, direct payment of tuition expenses as they arise may provide greater overall tax benefits than advance funding through 529 plans.
Custodial accounts offer flexibility for noneducation expenses, though funds become the child’s unrestricted property once they reach the age of majority. For more control, consider establishing trusts that can provide tax advantages while allowing you to specify how and when funds are distributed.
Give the Gifts of Time and Financial Literacy
Remember that your most valuable contributions aren’t always monetary. Your time, your attention and the life lessons you can share create lasting memories and teach important values. As your grandchild grows, involve them in age-appropriate money conversations. Simple activities like setting up savings avenues for young children or discussing investment basics with teenagers can instill crucial financial literacy skills.
Offering child care can also provide significant financial relief to your adult children, though it’s important to establish comfortable boundaries regarding your availability and involvement, especially if you are still working.
Build Your Legacy
Ultimately, being a grandparent offers a unique opportunity to positively impact another generation. By combining thoughtful financial planning with genuine engagement and love, you’re not just providing monetary support—you’re helping shape a young person’s understanding of money, values and family bonds. This knowledge will serve them throughout their lifetime.
Speak with your team to explore strategies that align with your family’s specific situation and goals. We’d be thrilled to help you on this journey!
The information set forth in this communication is presented by RWA Wealth Partners, LLC (“RWA”). The contents are for informational and educational purposes only and are not intended as investment, legal or tax advice. Please consult with your investment, legal or tax advisor concerning any specific questions you may have. Past results are not indicative of future performance. The historical return of markets generally and of individual asset classes or individual securities may not be an accurate predictor of future returns of those markets, asset classes or individual securities. RWA does not guarantee the accuracy and completeness of any sourced data in this communication.
The information set forth in this communication is presented by RWA Wealth Partners, LLC (“RWA Wealth Partners”). The contents are for informational and educational purposes only and are not intended as investment, legal or tax advice. Please consult with your investment, legal or tax advisor concerning any specific questions you may have. Past results are not indicative of future performance. The historical return of markets generally and of individual asset classes or individual securities may not be an accurate predictor of future returns of those markets, asset classes or individual securities. RWA Wealth Partners does not guarantee the accuracy and completeness of any sourced data in this communication.
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