Make your money last a lifetime
You’ve made it to retirement—congratulations! This is a milestone worth celebrating. While this new phase may bring changes, like adjusting to a fixed income or planning for health care costs, you don’t have to navigate them alone. We’re here to help you make decisions that support the lifestyle you’ve worked so hard to achieve.
Key moves to take control of your retirement
You don’t need to have everything figured out today. These essential steps can help you get started and build toward a secure, intentional retirement. Vanguard Advice is also available if you want expert guidance at any point.
Managing your retirement income requires coordinating multiple sources while minimizing taxes and simplifying logistics. Consolidating accounts with one provider can simplify this process and reduce costs. Consider rolling over your 401(k) into an IRA for more investment options and greater control.1
Consolidating accounts with one provider can simplify this process and reduce costs. Consider rolling over your 401(k) into an IRA for more investment options and greater control.
Start by mapping all guaranteed income streams: Social Security, pensions, and annuities. These provide stable, recurring payments, so time them strategically.
Next, plan for required minimum distributions (RMDs) beginning at age 73 (as of 2023) for traditional IRAs and 401(k)s. These withdrawals are mandatory and taxable.
For tax-efficient withdrawals, once you’ve satisfied your RMDs from tax-deferred accounts, consider using taxable accounts first and withdrawing from Roth accounts last to maximize tax-free compounding.2
To streamline this process, you could set up a money market fund, and move a year’s worth of spending (including RMDs and other income) into it. This can help lessen the impact of market swings, manage cash flows, and maintain tax efficiency.
Start by calculating your annual spending needs and assessing whether your portfolio can sustain them. A disciplined withdrawal strategy that prioritizes tax efficiency can help extend portfolio longevity. Having a mix of account types—such as traditional IRAs, Roth IRAs, and taxable accounts—gives you more flexibility to manage your tax burden by choosing which accounts to draw from each year. Roth conversions before or during retirement can help you build this tax diversification strategically.
You’ll also want to understand the behavioral factors that influence retirement spending. Self-control helps prevent overspending early in retirement. Loss aversion can lead you to be overly conservative, potentially undermining the growth needed to outpace inflation. On the other hand, not recognizing the limits of your resources and the trade-offs in your decisions can lead to excessive risk-taking or missed growth opportunities.
By recognizing these biases, you can choose an asset mix that balances emotional comfort with financial reality.
Planning for retirement isn’t just about money—it’s about protecting your independence and peace of mind.
An important first step is naming a trusted contact on your investment accounts. This person should be someone with integrity, financial awareness, and availability, as they may be contacted by your financial firm if concerns about exploitation or health arise.
Establish a financial power of attorney (POA) to designate someone to manage your finances if you become incapacitated. A health care POA and living will outline medical preferences, while a will specifies how your assets are distributed after death.
Finally, communicate your plans with loved ones. Share your financial inventory, document locations, and wishes so your family can act swiftly when needed.
Following these preparation tips is just one way that you can help manage risks and protect your finances as you age.
It’s essential to periodically review your account beneficiaries to ensure your assets are distributed according to your current wishes. Life events like marriage, divorce, births, or deaths can significantly affect your estate plan, so regular updates are necessary.
When choosing beneficiaries, consider family dynamics to avoid unintended disputes, and decide whether to include charities—which can support your legacy and offer tax benefits.
Also, understand the tax implications. For example, beneficiaries of retirement accounts face required distributions and income taxes, while nonretirement accounts may pass more flexibly.
Remember, beneficiary designations override instructions in your will. Name both primary and contingent beneficiaries to cover all scenarios.
Estate planning helps ensure your wishes are honored and your loved ones are protected. Follow this checklist of essentials:
- Create an inventory of your assets, including financial accounts, real estate, and personal valuables, to understand the full scope of your estate.
- Consider the goals for your estate plan, such as supporting family, caring for dependents, or charitable giving.
- Review beneficiaries and asset titling on all accounts to ensure they align with your intentions. Remember, beneficiary designations override wills.
- Consider ways to minimize estate taxes, as both federal and state taxes can reduce what your heirs receive. Strategies may include lifetime gifting or establishing trusts.
- Plan for potential incapacitation by establishing durable powers of attorney for finances and health care, along with a living will.
Regularly revisiting each step ensures your plan evolves with your life.
Your roadmap to living well in retirement
These 4 learning paths are guided journeys through key retirement topics, designed to help you build knowledge step by step. Start with what matters most to you and then return anytime to continue learning.
Managing retirement income
This learning path covers investing and withdrawal strategies to help your money last in retirement.
managing-retirement-income
Understanding Social Security
This learning path covers Social Security basics to help maximize your retirement income.
understanding-social-security
Navigating health care in retirement
This learning path simplifies Medicare, costs, and planning to help you make health care decisions.
navigating-health-care-in-retirement
Estate planning & financial exploitation
This learning path helps you protect your legacy and your financial well-being as you age.
protecting-your-estate
Tools and calculators to help manage your retirement strategy
Vanguard offers easy-to-use tools and calculators to help you plan and manage retirement finances, from estimating income needs to tracking withdrawals.
Look how far you’ve come
Now you’re equipped to navigate retirement with confidence. Managing your money, maximizing income, protecting your health, and preserving your legacy are all essential to living the retirement you deserve.
What you’ve learned:
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Why balancing retirement spending and market risk helps your savings last.
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What Medicare covers and how health care costs affect your plan.
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Why estate planning protects your legacy and your loved ones.
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How to guard against financial exploitation as you age.
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How to time Social Security for maximum lifetime income.
Need more support? Vanguard Advice can help.
1Source: Vanguard's Principles for Retirement Income
2Withdrawals from a Roth IRA are generally tax-free if you are over age 59½ and have held the account for at least five years; withdrawals of earnings taken prior to age 59½ or five years may be subject to ordinary income tax or a 10% federal penalty tax, or both. (A separate five-year period applies for each conversion and begins on the first day of the year in which the conversion contribution is made.)
All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss.
Diversification does not ensure a profit or protect against a loss.
There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
Vanguard’s advice services are provided by Vanguard Advisers, Inc. (“VAI”), a registered investment advisor, or by Vanguard National Trust Company (“VNTC”), a federally chartered, limited-purpose trust company.
The services provided to clients will vary based upon the service selected, including management, fees, eligibility, and access to an advisor. Find VAI’s Form CRS and each program’s advisory brochure here for an overview.
VAI and VNTC are subsidiaries of The Vanguard Group, Inc., and affiliates of Vanguard Marketing Corporation. Neither VAI, VNTC, nor its affiliates guarantee profits or protection from losses.
There are important factors to consider when rolling over assets to an IRA or leaving assets in an employer retirement plan account. These factors include, but are not limited to, investment options in each type of account, fees and expenses, available services, potential withdrawal penalties, protection from creditors and legal judgments, required minimum distributions, and tax consequences of rolling over employer stock to an IRA.