If our employer has a retirement plan, either the employer alone or both we and our employer are making regular contributions. A few employers still offer pension plans, which pay a set amount of income during retirement. We work hard, accumulate a tidy sum, and finally the big day is only months away. We start the paperwork to get that income flow started. But, there are a few nagging questions in the back of our minds.
Life expectancies continue to increase as medical advances are made.
However, maintaining the quality of our lives during these years has become more challenging. The process of managing income during retirement starts with determining, within reason, what level of income will be needed during the various stages of retirement. Right after retirement, income needs often increase due to expenditures on items related to hobbies, travel, other leisure activities, or possibly starting a side business. Because retirements last so long, the impact of inflation must be considered. During retirement we can no longer depend on promotions and pay raises to help our income keep up with inflation.