Retirement income planning

Managing money in retirement

Make the switch from saving to living

Creating a straightforward retirement income plan

Fidelity can help you build a plan to generate income—a plan that gives you the opportunity to grow your savings and create a cash flow that lasts. These are the key pieces of a retirement income plan:

Predictable income

Your plan should look at how much you’ll have in Social Security, pensions, or annuities to cover your expenses.


It should include investments that have growth potential and can help you keep pace with inflation.


Your plan should be flexible so that you can start, stop, or adjust at any time without unnecessary fees.1

Investments that can help you generate income

We offer a wide variety of income-focused investment options and can work with you to help you create a portfolio that meets your needs.

  • Mutual funds and exchange-traded funds (ETFs) seek to generate income as well as potential for long-term growth.
  • Individual bonds and certificates of deposit (CDs) offer the potential for regular income payments.
  • Annuities are insurance contracts that make guaranteed payments now or in the future.2

Explore Fidelity's investment options in retirement

Knowing how much you'll need to cover your lifestyle

It's important to plan for the essentials but also leave some room for discretionary or "fun" spending. Creating a realistic spending plan is an essential building block of retirement, and generally a reasonable estimate is between 55%–80% of your preretirement income, not including taxes.


Essential expenses

Essentials include your must-have priorities, like housing, health care, transportation, and food. These come first.

Discretionary expenses

Discretionary expenses include your nice-to-have spending, such as travel and entertainment, and the things you never had time for when you were working.

Read about creating a spending plan that works for you

Plan ahead for health care costs

Your health can be hard to plan for, but we can help you understand potential health care costs and how they could impact your retirement plan. Assume that you'll spend 15% of your monthly expenses on health care, but that figure will vary from person to person.

Read about planning for rising health care costs

What to consider when drawing down your savings

Now is the time to put your money to work. We can help you determine how much you can safely withdraw, look for ways to be more tax-efficient, and easily make withdrawals from your accounts.


Using your savings

Having a plan can help you more comfortably and confidently tap into your hard-earned savings. A rule of thumb is that you can safely withdraw no more than 4% to 5% of your savings in your first year of retirement, and you should adjust this amount each year for inflation.

Read more about making your savings last

Applying tax-smart strategies3

Choosing which type of account to withdraw from and when can be complicated when you are trying to manage your tax bill. Knowing the tax rules can help you avoid surprises:

1    Taxable brokerage account: Dividends, interest, and realized gains on investments are generally taxed in the year they are generated, and this income may be taxed at ordinary income or long-term capital gains rates.

2    Traditional IRA or 401(k): Withdrawals of pre-tax contributions and earnings are taxed at the same rate as your other earned income.

3    Roth IRA or Roth 401(k): Withdrawals are generally tax-free, as long as certain requirements are followed.4

Read about 2 tax-savvy approaches to withdrawals

Taking withdrawals

You can begin taking withdrawals from your individual retirement accounts without penalty starting at age 59½. And at age 72,5 you will need to start taking required minimum distributions (RMDs), or there may be a 50% penalty on the amount not taken.

You can withdraw money when you need to or set up automatic transfers from your retirement savings to your spending account. The quickest way is to make the transfer electronically. We can help.

Learn about withdrawing from your IRA

Let our Fidelity advisors help you

We can help you generate income from your investments, provide tax-smart strategies,3 and help you build a flexible plan to adapt to your changing needs.

Find an advisor

Create a retirement income plan

Our Planning & Guidance Center can help you build or update your investment strategy, estimate expenses, explore how much income you may have, and see how long your money may last in retirement.

Create or modify your plan

Additional retirement resources

Retirement checklist

Navigate important retirement decisions with an easy-to-follow planning checklist.

Social Security

Understand how Social Security fits into your retirement plan and estimate your benefit.

5 key factors

Discover some rules of thumb for protecting your income in retirement.

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