Part 3: Building for the Long Haul
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Read Part 2
This is the final post in our three-part series on retirement retirement income planning. We began with retirement income sequencing and followed with how to adapt when life doesn’t go according to plan. Today, we focus on how to keep plans resilient over time—especially as inflation and longevity create new challenges later in retirement.
The hardest part of retirement planning isn’t picking an investment allocation or deciding when to take Social Security. It’s managing uncertainty over time, especially uncertainty you can’t see coming.
How long will you need your portfolio to last? What will health care cost in your 80s or 90s? Will inflation erode your spending power faster than you expect? These aren’t theoretical concerns. They’re risks that can be modeled, mitigated, and managed, but never eliminated.
That’s where flexibility becomes the most valuable feature of a retirement plan.
Longevity Isn’t Just a Number
It’s easy to build a plan around average life expectancy. But most people don’t live average lives. For couples, especially, there’s a high likelihood that at least one partner will live well into their 90s.
Planning for longevity doesn’t mean assuming the worst. It means recognizing that sustainability often matters more than optimization, and that a plan that looks efficient at age 65 may not hold up as well at 85.
For some, that means keeping a portion of the portfolio in growth-oriented investments to support long-term purchasing power. For others, it might involve layering in predictable income streams to reduce the pressure on market-based withdrawals.
Inflation Is a Quiet Threat
Many families feel buffered from inflation. Their portfolios outpace CPI over time, and their lifestyle inflation tends to be self-imposed, not structural.
But in retirement, inflation works differently. Health care costs, in particular, tend to rise faster than average inflation and hit hardest later in life. For example, a 65-year-old retiree might expect annual health-related expenses to more than double by age 85. According to industry research, these costs can rise from approximately $5,100 per year to over $12,500, especially if long-term care is needed. Long-term care, even for those with strong coverage or family support, can be a major wildcard.
This is where retirement income planning needs to go beyond “annual raises.” It should reflect how spending categories evolve, and where future costs may compound more aggressively than others.
Flexibility Is a Design Choice
The most resilient retirement plans are built to adapt. That could mean:
- Structuring portfolios with enough liquidity to avoid forced sales
- Holding Roth accounts in reserve for tax-free access later
- Creating a withdrawal “reserve” during strong market years to buffer weaker ones
- Revisiting the plan when tax laws change, markets shift, or priorities evolve
Flexibility isn’t just about cash. It’s about options. The ability to adjust drawdowns, shift income sources, or rebalance without triggering avoidable taxes or selling long-term positions too early.
It’s a Living Plan
The best retirement income planning is one that recognizes life doesn’t move in straight lines. Markets change, needs shift, and even the definition of “enough” can evolve.
The goal isn’t to pick the perfect path on day one. It’s to build a strategy with enough strength, and enough slack, to keep working as the future unfolds.
Everyone’s retirement path looks a little different. If you're navigating these types of decisions and want to understand how they apply to your situation, we're here to help you think it through.