It is best to strategize and plan ahead of time for the income you will need in retirement. First, draw up a retirement spending plan. Be sure to include all the expenses you anticipate having in retirement using a detailed cash flow statement.

Next, make a list of all retirement assets and the dates on which distributions can be taken without penalty. Then, figure out the stream of income expected from each. If this exceeds projected expenses, you will have to decide which plans to leave untouched and what investments will help their nest egg counter the effects of inflation and taxes.

Decide what percentage of your assets should be in stocks, bonds, and money markets based on the need for current income and other sources of income available.

Recognize that you may live a lot longer than your parents. Also, contemplate whether Income is needed to support other family members in addition to the income you will need for your self.

Remember that how much is available to draw down from a retirement portfolio will depend on a variety of factors including:

• Spending habits
• Portfolio returns
• Life expectancy

Generally, the amount of income needed in retirement will be the same as what is needed currently. If you truly believe you can plan and live on a scaled back lifestyle in retirement, begin living on a scaled back income prior to reaching retirement.