A successful retirement income strategy involves more than choosing investments or building account balances. Decisions about taxes, Social Security, and how long your money may need to last can have a significant impact on your financial future.
Many retirees focus on individual financial moves without considering how those decisions fit into a broader plan. Whether you’re evaluating a Roth conversion, deciding when to claim Social Security, or estimating retirement expenses decades into the future, each choice can affect the others.
At Aul Financial Group, LLC, retirement planning often starts with understanding how these moving pieces work together to support a sustainable income stream throughout retirement.
For higher-income earners, direct contributions to a Roth IRA may not be allowed because of IRS income limitations. As a result, many investors consider a backdoor Roth strategy.
A backdoor Roth is not a type of account. Instead, it involves making a non-deductible contribution to a traditional IRA and then converting those funds to a Roth IRA.
However, investors should understand that existing IRA balances may affect the tax treatment of the conversion. The IRS requires certain IRA assets to be included when calculating the taxable portion of a Roth conversion, which can create unexpected tax consequences if not properly evaluated. The IRS provides additional guidance on IRA distributions and Roth conversion taxation in Publication 590-B.
Before pursuing any Roth conversion strategy, it may be beneficial to evaluate how the conversion affects your overall retirement income strategy, both today and in the future.
One of the most important retirement decisions involves determining when to claim Social Security benefits.
Some individuals choose to begin benefits at full retirement age and invest the monthly payments. Others may decide to delay benefits in exchange for a larger future income stream.
According to the Social Security Administration, retirement benefits increase for each month benefits are delayed beyond full retirement age until age 70. For many retirees born in 1943 or later, delayed retirement credits can result in an 8% annual increase in benefits.
For married couples, the claiming decision may have long-term implications because survivor benefits are often tied to the higher-earning spouse’s benefit amount.
The goal isn’t necessarily to maximize benefits at all costs. Instead, an effective retirement income strategy should evaluate cash flow needs, taxes, life expectancy, and spousal considerations before determining the most appropriate approach to claiming.
Many retirement plans fail because people underestimate how long retirement may last.
While retirees often focus on reaching retirement, the greater challenge can be funding a retirement that lasts 25 or 30 years or more. Planning for a shorter timeline may increase the likelihood of running out of income later in life.
Longevity remains one of the most overlooked retirement planning risks. Many retirees build plans around average life expectancy without considering that retirement could last 25 years or longer, requiring income, tax, and investment strategies that can adapt over time.
A well-designed retirement income strategy should account for longevity risk by considering how long assets may need to generate income, particularly when healthcare costs and inflation continue to affect spending throughout retirement.
Income planning goes beyond investments alone.
An effective strategy should also evaluate:
Each component contributes to the overall financial picture. Decisions made in one area can influence outcomes in another, making coordination an important part of the planning process.
At Aul Financial Group, LLC, retirement planning often involves looking beyond individual products or account balances and focusing instead on how every decision contributes to a long-term income plan.
The strongest retirement income strategy is not built around a single financial decision. It is built on understanding how taxes, Social Security, Roth conversion opportunities, inflation, and longevity work together.
By evaluating these factors as part of a coordinated plan, retirees may be better positioned to make informed decisions about their future income needs. What matters most is not simply accumulating assets but creating a strategy designed to support financial confidence throughout retirement.
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Insurance products are offered through the insurance business Aul Insurance Group, LLC. Aul Financial Group, LLC is an Investment Advisory practice that offers products and services through Impact Partnership Wealth, LLC (IPW), a Registered Investment Adviser. IPW does not offer insurance products. The insurance products offered by Aul Insurance Group, LLC are not subject to Investment Advisor requirements. Aul Insurance Group, LLC and IPW are not affiliated companies. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions.
Please remember that converting an employer plan account to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA. 5824911-08/26
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Steven Aul is an independent financial professional with decades of experience helping individuals navigate retirement and financial planning. A Ball State University graduate with a bachelor’s degree in accounting, he is the host of The Aul Financial Hour – Your Money Matters on KMOX 1120 AM/104.1 FM and has contributed to publications including CNN Money, Forbes, and Fortune, while also leading financial workshops throughout the St. Louis area.
Steve believes in full transparency in his practice and designations.
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The RICP® (Retirement Income Certified Professional®) designation is sought by financial services sales professionals whose focus includes clients planning for their retirement income. The designation’s required curriculum is administered by The American College in Bryn Mawr PA, which is accredited by The Middle States Commission on Higher Education, Philadelphia, PA 19104 The mark RICP® is the property of The American College and may be used only by individuals who have successfully completed the initial and ongoing certification requirements for this designation.