Building wealth is one thing. Drawing income from it can be a different financial challenge altogether.
During your working years, the focus is on accumulation: saving consistently, investing for growth, and giving your portfolio time to compound. Once you start to approach retirement, the lens changes to turning what you’ve already built into reliable income that can support your lifestyle for years to come.
The transition from accumulation to decumulation asks different questions:
These decisions can add uncertainty to an already significant financial transition. In fact, retirement confidence has fallen to its lowest level since 2017, according to the Employee Benefit Research 2026 Retirement Confidence Survey.
There’s no single formula for creating retirement income, but a coordinated strategy can help you make decisions with greater confidence.
Your retirement income strategy should be a reflection of your complete financial picture. As you move from building wealth to drawing from it, consider the following when deciding how to use your assets to support your retirement.
If you have a combination of taxable investment accounts, traditional IRAs, and Roth accounts, the order in which you withdraw from them can affect your tax bill as well as the longevity of your portfolio.
For example, withdrawals from a traditional IRA are generally taxable as ordinary income, while qualified Roth withdrawals can be tax-free. Taxable accounts have their own considerations, including the potential tax impact of selling investments.
There isn’t a universally optimal withdrawal sequence; the same methods and timing won’t work in the same way for everyone. Factors like your age, income, tax situation, investment portfolio, required minimum distributions, and goals all play a role.
The important thing is not just to simply ask which account has available funds before you withdraw. Instead, consider how each withdrawal fits into your broader financial plan.
Your investment portfolio can provide retirement income in more than one way.
For example, depending on your circumstances, you might use:
Social Security, pensions, business interests, real estate, and other assets may also form part of your financial picture in retirement.
The goal isn’t necessarily to make every dollar in your portfolio produce income, but to coordinate your different resources so your income strategy supports both your current lifestyle and your longer-term goals.
Your risk tolerance may have been relatively high during your working years, when you had time to recover from market downturns. But market volatility can feel very different when you begin relying more on your portfolio for income.
If markets fall and you find you need to sell investments, you could end up locking in losses and reducing the amount of capital available to participate in a future recovery.
That doesn’t mean you have to try to predict every market downturn. Instead, build a plan for what you’ll do when one happens.
Your strategy might include:
These guardrails can make it easier to avoid emotional investment decisions when markets become unpredictable, as they inevitably do.
Turning a portfolio into sustainable income involves more than deciding how much to withdraw each year. Everything is connected: your investment strategy, tax situation, cash flow needs, estate plan, risk tolerance, and long-term goals. Even the smallest change in one area can have an impact in others.
A coordinated team looking at your situation can make a difference. At AMG, our ensemble approach brings investment management and financial planning together while incorporating tax and risk considerations into the conversation. Looking at your full financial picture as a group, we can help develop an income strategy that integrates your circumstances rather than treating each decision in isolation.
Coordination can be particularly valuable for executives, business owners, and families with complex portfolios, where retirement may involve multiple accounts, income sources, and competing priorities.
Retirement is a significant financial transition, regardless of how much wealth you’ve accumulated. After years of focusing on building your portfolio, you’re now asking your assets to work for you.
The earlier you begin planning for that transition, the more options you’re likely to have. You can consider different withdrawal strategies, evaluate your sources of income, understand the potential tax implications, and establish a plan for periods of market volatility before you need to rely on it.
You don’t need to predict exactly what markets will do or know precisely how much you’ll spend every year. You need a strategy that can adapt.
Ready to build a strong and sustainable retirement income strategy? Let’s schedule a conversation today.