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There’s a lot of planning that goes into retirement, especially when it comes to deciding if, when, and how to use your nest egg. Calculating your retirement fund is about more than covering your expenses. It can also affect your taxes, long-term income and investment growth.
Whether you’re approaching retirement age or considering withdrawals earlier than planned, here are several things to consider before accessing your retirement funds.
What are your requirements?
Before using your retirement funds, ask yourself how much money you really need and whether it is necessary.
according to 2025 Annual Retirement Study from the Allianz Center for the Future of Retirement64% of Americans are more worried about running out of money than dying. Kelly LaVigne, vice president of consumer insights at Allianz Life, said a strong retirement strategy can help determine how long savings should last.
Once funds are withdrawn from retirement accounts, it may be difficult or impossible to replace them. Minor withdrawals, if repeated over time or made earlier than planned, may also shorten the life of the portfolio.
What are your sources of income?
What are your anticipated sources of income other than your retirement accounts? This could be Social Security, pensions, part-time work, or other income sources.
Social Security is often the baseline for guaranteed retirement income, which helps cover essential expenses. Whereas $2,071 per month, which is the average monthly Social Security retirement benefit for January 2026. social Security AdministrationWhile not a replacement for an entire paycheck, it can help reduce the amount you need to withdraw from retirement savings.
How does your investment mix affect your withdrawal rate?
The next question is how your investment mix affects how much you can safely withdraw each year.
A general rule of thumb when it comes to retirement spending is the 4% rule. Using this strategy, you add up your investments and withdraw 4% of that total in your first year of retirement, then adjust that amount each subsequent year for inflation.
according to charles schwabFollowing this formula should give you a higher chance of not running out of money during your 30-year retirement.
Should you talk to a financial advisor?
During your working years, financial planning is about balancing retirement savings with budgeting and other financial goals. Northwestern Mutual. But when you retire, it’s no longer about building your nest egg, but how you generate income from these savings.
This requires income and tax planning, and this is where a financial professional can help. A financial professional can help you better prepare for retirement and make informed decisions about when, where, and how to receive income from your savings so that it lasts as long as needed.