Episode Details

If you're nearing retirement, one of the biggest questions you might be asking yourself is: how long will my money really last?

Americans are living longer than ever before. According to the Society of Actuaries, a 65‑year‑old couple today has nearly a fifty percent chance that one partner will live beyond ninety. At the same time, inflation averaged six percent over the past three years, and even with the Fed's tightening, rates are expected to remain elevated compared with the last decade. Add in volatility from election‑year uncertainty and a scheduled tax shift in 2026, and the math around retirement income looks more complex than ever.

Building up savings is only part of the job. Turning those savings into predictable, durable income has become the real challenge of retirement in 2025.

Many people entering retirement make mistakes with their income planning. Some underestimate longevity risk, not realizing that living even five years longer can have a major impact on their accounts. Fidelity estimates the average 65‑year‑old couple will need over three hundred fifteen thousand dollars just to cover healthcare expenses. Others neglect to account for taxes. IRA and 401(k) rollovers are pre‑tax assets, and the Tax Policy Center projects most households will see higher effective rates once the 2017 tax cuts expire in 2026. Another mistake is relying too heavily on the markets. History shows that retiring during a bear market can shorten portfolio longevity, sometimes by a decade or more. And many overlook Social Security timing, even though claiming at sixty‑two instead of full retirement age reduces benefits by roughly thirty percent for life.

So how can professionals help retirees address these risks in 2025 and 2026? Four key strategies stand out.

First, map cash flow — not just assets. It’s critical to look at inflows and outflows, including guaranteed income sources like Social Security and pensions, versus variable ones like investments.

Second, stress‑test for volatility. Vanguard research shows retirees who model multiple market conditions are far less likely to face income shortfalls compared to those assuming steady growth.

Third, use tax‑smart withdrawals. With rates set to rise, more households are turning to Roth conversions and coordinated strategies to lock in today's lower tax environment.

And fourth, layer in sustainable income. LIMRA reported that annuity sales in the U.S. hit a record three hundred eighty‑five billion dollars in 2023, and demand remains strong. More retirees are prioritizing pension‑like income streams they can't outlive.

Advisory firms are adapting to this shift, moving toward lifetime income planning rather than simple investment portfolios. Updates include annuity‑backed streams, rollover strategies, inflation and spousal‑care planning, and Social Security maximization.

In Chicago, these considerations are especially relevant. Retirees in Illinois face higher property taxes and healthcare costs above the national average. While the state exempts retirement income from taxation, WalletHub recently ranked Illinois among the least retiree‑friendly states overall because of these local pressures. Cookie‑cutter retirement plans just don't work here — personalized income strategies are becoming the baseline expectation.

The key takeaway is this: retirement today isn't just about the size of your nest egg. It's about how effectively those assets are converted into a paycheck that lasts as long as you do.

Ask yourself: will my income rise with inflation? Can I withstand a market downturn in my first few years of retirement? Do I have reliable income that lasts as long as I live? Have I accounted for rising taxes and healthcare costs?

Market forces may be uncertain, but your retirement income doesn't have to be. The smartest strategy isn't chasing the hottest stock — it's building a lifetime paycheck tha