Key Takeaways
-
A structured approach to budgeting, healthcare, taxes, and income timing can help your clients extend their retirement resources more confidently.
-
By eliminating guesswork and using smart tools and strategies, you can guide retirees to make informed decisions without the fear of running out of money.
Why Retirement Spending Still Triggers Anxiety in 2025
Even with rising access to tools and education, clients in 2025 remain uneasy about stretching their retirement savings. They don’t just fear market volatility or inflation—they fear making the wrong decision and running out of money. As a financial professional, your role is to replace that guesswork with clarity and remove fear by providing a plan with structured decision points.
Whether your client retired with $300,000 or $3 million, the approach is the same: help them control what they can and prepare for what they can’t.
Create a Sustainable Spending Framework
Start by helping clients define a sustainable withdrawal strategy based on their unique income streams, lifestyle needs, and future goals. The right framework avoids both underspending and overspending.
Define Essential vs. Discretionary Spending
Break the budget into two categories:
-
Essential: Housing, food, insurance, healthcare, taxes
-
Discretionary: Travel, dining out, hobbies, gifts
This distinction is not just philosophical—it informs risk allocation, withdrawal prioritization, and emergency planning.
Apply a Flexible Withdrawal Strategy
A rigid 4% rule may no longer reflect today’s realities. Instead, consider strategies that adapt based on market returns and spending needs, such as:
-
Guardrails approach (adjusting withdrawals within a band)
-
Bucket strategies (near-term vs long-term allocation)
-
Income floor planning (covering essentials with predictable income sources)
You reduce fear by showing clients that their strategy evolves with the market rather than forcing them to follow a fixed rule.
Timing Income Sources for Tax and Longevity Efficiency
With clients living longer and regulations constantly changing, timing becomes just as important as the total amount saved.
Delay Social Security Strategically
Encourage clients to view Social Security not just as a check, but as a risk-management tool. In 2025, full retirement age remains 67 for those born in 1963. Delaying benefits past that age increases monthly payments significantly.
Use this delayed benefit period to draw from other sources (TSP, IRAs, etc.) while tax brackets are still favorable.
Coordinate IRA and Roth Withdrawals
-
Use Roth IRAs for tax-free withdrawals later in retirement
-
Withdraw from traditional accounts before RMDs begin at age 73 to manage tax brackets
Smart coordination avoids sudden tax jumps later and allows for more control over lifetime tax liability.
Healthcare Is Still the Wildcard
Healthcare remains one of the biggest sources of uncertainty in retirement. While clients may know their premiums, most underestimate out-of-pocket expenses, especially for long-term care.
Help Clients Plan Around Known and Unknown Costs
In 2025:
-
Medicare Part B premiums are $185/month
-
The annual deductible is $257
-
Out-of-pocket caps for Part D are now $2,000
Clients need to understand that coverage is not complete. Help them model additional costs for dental, vision, hearing, and long-term care.
Use Medicare Coordination to Reduce Risk
For clients aged 65 and older, coordinating employer plans or FEHB/PSHB with Medicare can lower total expenses.
Create comparison scenarios to show:
-
Cost savings when both Medicare Parts A and B are in place
-
Reduced copayments and deductibles when combining public and federal plans
This proactive conversation removes surprises that could disrupt a retirement income plan.
Taxes Can Eat Away Quietly
Clients often worry about market downturns but overlook the erosive power of poor tax planning. As a financial professional, one of the most valuable services you can offer is building a retirement income strategy that manages taxes over time—not just this year.
Build a Forward-Looking Tax Map
Work with a 10-to-20-year lens, not just a one-year return. Show clients how tax diversification helps them retain more of their income over time.
Strategies include:
-
Partial Roth conversions during low-income years
-
Harvesting capital gains strategically
-
Distributing IRA income earlier to reduce Required Minimum Distributions later
Use software to illustrate the lifetime tax impact of different withdrawal orders. This moves your client from reacting to planning.
Inflation-Proof the Essentials
Inflation isn’t gone—and it never really is. Even in 2025, retirees are feeling the effects of gradually increasing food, healthcare, and housing costs. A proper income strategy needs to address this directly.
Use Guaranteed and Market-Based Income Strategically
Many clients lean too heavily on either:
-
Fixed income (CDs, annuities, pensions)
-
Growth-oriented portfolios
Show them how blending predictable income with flexible investment withdrawals can:
-
Provide stability for essentials
-
Allow growth to continue covering discretionary or future costs
This mix helps maintain purchasing power across multiple decades.
Review Inflation Assumptions Annually
What worked last year may not be relevant now. Encourage annual reviews that:
-
Update cost-of-living projections
-
Adjust withdrawal rates
-
Rebalance to maintain the income/distribution blend
Rethink Risk: It’s About Confidence, Not Just Returns
Your clients don’t always fear market losses—they fear being unprepared for them. Shift the risk conversation away from performance and toward confidence.
Show Risk in Terms of Outcomes
Stop talking in abstract volatility percentages. Instead, frame risk as:
-
“How likely are you to maintain your lifestyle for 25 years?”
-
“What happens to your income if markets drop 20% next year?”
Visualization tools and scenario modeling go a long way here. This transforms fear into understanding.
Build a Cushion, Not Just a Portfolio
Help clients build an emergency buffer:
-
12 to 24 months of expenses in cash or liquid equivalents
-
Separate from the investment portfolio
This buffer reduces panic-driven decisions and gives their long-term investments time to recover if needed.
Don’t Overlook the Psychological Side
Financial planning is emotional. Even if the numbers say “you’re fine,” clients may still feel uncertain.
Frame Conversations Around Control and Choice
Instead of leading with statistics or forecasts, lead with:
-
What clients want control over
-
What fears keep them up at night
-
What choices they want to protect
Aligning your planning approach with emotional reassurance creates stronger, longer-lasting relationships.
Make Success Tangible
When clients feel overwhelmed, help them break goals down into steps:
-
“You’re on track to cover the next 5 years comfortably.”
-
“We have a plan in place to address medical needs if they change.”
These small wins reinforce trust in the process—and in you.
Where Confidence Replaces Guesswork
Retirement doesn’t need to feel like a puzzle your clients have to solve alone. Your guidance replaces vague hope with structure, and anxiety with measurable steps.
With the right income planning strategies in place, clients can stretch their retirement savings further and feel better doing it.
If you’re looking to simplify your workflow and support more clients with tools that scale, sign up with Bedrock Financial Services. We help financial professionals like you reach more people, stay in touch consistently, and close the gaps in retirement income planning—without adding hours to your day.
