Retirement Income is the second of BGS’s Three Cornerstones, focused on turning accumulated resources into a strategy designed to support life after work.
The order of things matters more than people think.
Which account do you draw from first? When do you claim Social Security? What happens when required minimum distributions arrive? Get the sequence right and your money works quietly in the background. Get it wrong and taxes and timing take bites you never see coming.
This page is the counterpart to retirement planning. That work answers whether you can retire and what the overall plan looks like. This work answers how accumulated resources become sustainable cash flow after work — every month, for a retirement that could run thirty years.
Many sources. One coordinated paycheck.
- Social Security
- Pension
- IRA / 401(k)
- Roth accounts
- Taxable investments
- Cash reserves
- Housing
- Healthcare
- Travel
- Family
- Giving
- Unexpected needs
Different accounts, different rules.
Traditional retirement accounts, Roth accounts and taxable investments each carry their own tax characteristics, distribution rules and timing considerations — and the order you draw from them changes what you keep.
There is no universal right sequence. The right order for you depends on your income needs, your tax picture, RMD schedules and what you want left over — which is why sequencing is a planning decision, revisited every year, not a rule of thumb applied once.
Where taxes enter the picture.
- Required minimum distributions
- Traditional vs. Roth accounts
- Taxable investment accounts
- Capital-gain considerations
- Social Security taxation
- Roth-conversion considerations
- Income thresholds & Medicare
- Charitable goals
Tax implications can influence financial decisions, and BGS can consider those implications as part of the broader planning process and coordinate with appropriate tax professionals where needed.
Why the same returns can feel very different in retirement.
During accumulation, a bad market year hurts on paper but time can repair it — you're still buying, not selling. In retirement the arithmetic changes: withdrawals during a decline sell more shares at lower prices, and those shares aren't there for the recovery.
That's why two retirees with identical average returns can have very different outcomes depending on the order those returns arrive. No one controls the order. A thoughtful plan can help manage that exposure — through allocation, cash reserves and withdrawal flexibility.
Still contributing. Time and ongoing purchases can help repair the dip.
Withdrawing through the dip sells more shares at lower prices — the recovery has less to work with.
Conceptual illustration only. Not a prediction, projection or guarantee of any outcome.
Questions we hear about retirement income.
Which accounts should I withdraw from first?
There's no universal sequence. Traditional, Roth and taxable accounts carry different tax characteristics and rules, so the order depends on your income needs, tax picture and goals — reviewed year by year.
When should I claim Social Security?
Claiming age changes the benefit for life and interacts with other income and taxes. The decision should reflect health, spousal considerations and your broader income plan — not a rule of thumb.
What are required minimum distributions?
RMDs are withdrawals the IRS requires from certain retirement accounts starting at a set age. They're taxable and arrive on a schedule, which is why planning ahead of them matters.
What is a Roth conversion?
Moving assets from a traditional retirement account to a Roth — paying tax now in exchange for tax-free qualified withdrawals later. Whether and when it makes sense is a planning question, considered alongside your tax professional.
Can withdrawals affect Medicare premiums?
Yes. Medicare premiums are income-based, so distribution timing and income thresholds can affect what you pay — one more reason sequencing deserves attention.
How much cash should retirees keep?
Enough to avoid selling investments at a bad moment — and to sleep well. The right reserve depends on your income sources, spending and risk tolerance.
What happens when markets fall during retirement?
A plan anticipates declines rather than predicting them: cash reserves, flexible withdrawal strategies and an appropriate allocation may help reduce the impact of difficult market periods on planned retirement income.
Spend your retirement. Don't spend it worrying.
Most retirees we meet aren't overspending — they're underspending, out of fear, because no one has shown them what they can safely afford. A real income plan buys confidence, not restriction.
Plan Your Retirement Income