GRIP Financial Planning: Growth, Retention, Income, Protection

Retirement Planning • Income plan

Build a retirement income plan

Sort spending into must-haves and nice-to-haves, line up income against them, and see the gap savings would need to fill.

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Educational only. This is general information, not advice for your situation. Retirement rules and figures change every year. Amounts that change yearly are linked to their official source, and the one table of contribution limits is labeled with its year. Verify current figures with official sources such as ssa.gov, medicare.gov and irs.gov, and consult a qualified professional before making decisions.

Step 1: Two kinds of spending

A useful first step is to split retirement spending into two groups, because they can be paid for in different ways.

Essential expenses

The bills that must be paid every month, whatever markets do.

  • Housing, utilities and property taxes
  • Food and household basics
  • Health insurance premiums and medical costs
  • Transportation
  • Insurance and income taxes

Discretionary expenses

The things that make retirement enjoyable, and that can flex in a lean year.

  • Travel and dining out
  • Hobbies and entertainment
  • Gifts and helping family
  • Charitable giving beyond the basics
  • Big wish-list purchases

Step 2: Where retirement income can come from

  • Social Security, which lasts for life and has a yearly cost-of-living adjustment.
  • Pensions, if you have one. Check the survivor options and whether payments rise with inflation.
  • Annuities, which some people use to turn part of their savings into income. They come in many types, with different costs, rules and risks; see Investor.gov: Annuities.
  • Withdrawals from savings: 401(k)s, IRAs, taxable accounts and cash.
  • Work, part-time or consulting, and other sources such as rental income.

Income that keeps arriving no matter what markets do is often called dependable or guaranteed income. Any guarantee is only as strong as the organization behind it.

Step 3: Put the pieces in order

  1. Cover essentials with dependable income

    Income

    Line up income that keeps arriving, such as Social Security, a pension or, for some people, an annuity, against the bills that must be paid every month.

  2. Keep a near-term reserve

    Retention

    Hold a few years of planned withdrawals in cash or short-term savings, so a market drop doesn’t force a sale.

  3. Invest the rest for long-term growth

    Growth

    Money not needed for years can stay invested to help keep up with inflation, in a mix that fits your time horizon and risk.

  4. Protect the plan

    Protection

    Health coverage, a long-term care plan, survivor income, insurance and up-to-date documents.

  5. Review it regularly

    All four pillars

    Once a year and after big life events: spending, taxes, withdrawals, beneficiaries and this year’s figures.

The near-term reserve is what lets the long-term money stay invested through a downturn, which helps with sequence-of-returns risk. How many years to hold, and in what, depends on each person.

Private worksheet

Retirement income worksheet: how big is my gap?

Enter monthly amounts in today’s dollars. The example numbers are hypothetical. Everything runs in your browser; nothing is saved or sent.

Spending (per month)
Dependable income (per month)

Your own estimate is on your my Social Security account.

For example, rental income or an annuity payment.

Near-term reserve

This is a simplified estimate. It leaves out taxes, inflation, investment returns and one-time costs, so the real gap may be larger or smaller.

Step 4: Test the plan

Official sources

Checked October 2026. Amounts that change every year are linked to their official source rather than repeated here. Official pages can change; listing is not an endorsement.