{"id":15710,"date":"2026-10-07T15:16:22","date_gmt":"2026-10-07T20:16:22","guid":{"rendered":"https:\/\/www.figmarketing.com\/blog\/?p=15710"},"modified":"2026-10-07T15:16:04","modified_gmt":"2026-10-07T20:16:04","slug":"from-nest-egg-to-retirement-income-planning-in-a-peak-65-environment","status":"publish","type":"post","link":"https:\/\/www.figmarketing.com\/blog\/from-nest-egg-to-retirement-income-planning-in-a-peak-65-environment\/","title":{"rendered":"From Nest Egg to Retirement Income: Planning in a Peak 65 Environment"},"content":{"rendered":"\n

Although 2025 marked the numerical peak of Peak 65<\/strong>, a historic demographic shift of Americans reaching age 65, the retirement-planning wave is still building. More than 4.1 million Americans<\/strong><\/a> are expected to turn 65 each year through 2027, or more than 11,200 people per day.<\/p>\n\n\n\n

That means millions of households are approaching decisions about income, Social Security, Medicare, taxes, and portfolio withdrawals within a relatively short timeframe.<\/p>\n\n\n\n\n\n\n\n

For independent financial advisors, a central planning question is changing. Accumulating a retirement portfolio is only the first phase. The next challenge is helping clients convert savings into income they can use without giving up the liquidity, growth potential, and flexibility they may need later.<\/p>\n\n\n\n

What Does Peak 65 Mean for Financial Advisors?<\/strong><\/h2>\n\n\n\n

Peak 65 represents the growing number of clients who need to move from saving for retirement to drawing dependable income from multiple sources. That transition can be difficult, however.<\/p>\n\n\n\n

In the 2025 Protected Retirement Income and Planning Study<\/strong><\/a>, 54% of surveyed baby boomers and Gen X consumers said they feared outliving their savings. Only 35% of consumers surveyed had a specific retirement-income plan. Because the research was sponsored by an organization that promotes protected income, the findings should be clearly attributed, but they still illustrate the planning gap advisors are being asked to address.<\/p>\n\n\n\n

A practical response starts with paycheck design: determine what the client needs, identify which income sources can be counted on, and decide how the remaining assets should support flexibility and growth.<\/p>\n\n\n\n

Related: How to Talk Protected Income with Today’s Retirees<\/a><\/strong><\/h4>\n\n\n\n

How Do You Build a Retirement-Income Floor?<\/strong><\/h2>\n\n\n\n

A retirement-income floor is the dependable income available to cover a client\u2019s essential expenses. Building one starts by separating required spending from discretionary spending. Housing, food, utilities, insurance, and basic healthcare may belong in the essential category. Travel, gifts, hobbies, and other lifestyle goals may be more flexible.<\/p>\n\n\n\n

Next, subtract dependable sources such as Social Security and pensions from essential spending. The difference is the client\u2019s reliable-income gap.<\/p>\n\n\n\n

That gap can then be evaluated against several resources, including cash reserves, bonds, flexible portfolio withdrawals, and appropriately selected lifetime-income strategies.<\/p>\n\n\n\n

The ultimate goal is to decide which expenses shouldn\u2019t depend entirely on market performance while keeping other assets available for changing needs, inflation, growth, and legacy goals.<\/p>\n\n\n\n

Why Does Sequence-of-Returns Risk Matter?<\/strong><\/h2>\n\n\n\n

Sequence-of-returns risk is the danger that weak or stagnant investment returns early in retirement will combine with ongoing withdrawals and reduce the portfolio\u2019s ability to recover.<\/p>\n\n\n\n

Two portfolios can earn the same long-term average return but produce very different retirement outcomes when gains and losses occur in a different order. A retiree who may need to sell assets during an early downturn could have fewer shares participating in a later recovery.<\/p>\n\n\n\n

You can help clients address this risk by planning the first years of withdrawals before retirement begins. Depending on the client, that may involve cash reserves, high-quality fixed-income assets, flexible spending rules, bridge assets that support delayed Social Security claiming, or contractual income.<\/p>\n\n\n\n

The right structure should also preserve adequate liquidity. Protecting essential spending has value, but overcommitting assets to an illiquid strategy can create a different problem when healthcare, family, or housing needs change.<\/p>\n\n\n\n

What Role Can an Annuity Play in Retirement Income?<\/strong><\/h2>\n\n\n\n

An annuity can help fund dependable retirement income, but its role should be defined before a product is selected.<\/p>\n\n\n\n

Immediate, deferred, fixed, fixed indexed, variable, and registered index-linked annuities can have different guarantees, fees, liquidity provisions, and market exposure. Some contracts include withdrawal features, while surrender charges and limits may apply. Optional riders can add benefits and costs.<\/p>\n\n\n\n

The term “guarantee” also doesn\u2019t mean every risk disappears. Contractual consequences depend on the issuing insurance company\u2019s claims-paying ability. Inflation may reduce the purchasing power of level income, and certain annuity types can experience losses.<\/p>\n\n\n\n

These distinctions matter as annuity demand remains elevated. Final LIMRA data<\/a><\/strong> showed $464.1 billion in US annuity sales during 2025. First-half 2026 sales also reached a record $228.7 billion, but that sales volume doesn\u2019t determine suitability for an individual client.<\/p>\n\n\n\n

So, what specific job would this contract perform in the plan? The answer might be covering part of the essential-income gap, managing longevity risk, or reducing the need to withdraw from investment assets during difficult markets. If the contract doesn\u2019t have a clear job, the recommendation needs further analysis.<\/p>\n\n\n\n

Related: How Advisors Can Reframe the Annuity Conversation: From Product to Outcome<\/a><\/strong><\/h4>\n\n\n\n

How Should Social Security, Medicare, and Taxes Be Coordinated?<\/strong><\/h2>\n\n\n\n

Social Security is the first layer of the income floor for many households. Claiming decisions should therefore be evaluated alongside longevity, employment, survivor needs, taxes, and the assets available to fund any delay.<\/p>\n\n\n\n

For eligible individuals born after January 1, 1943, delayed retirement credits can increase a benefit by 8% annually between full retirement age and age 70. Delaying can also affect the benefit used to calculate a surviving spouse\u2019s payment. That makes Social Security a potential income source.<\/p>\n\n\n\n

Medicare adds another timing consideration. The standard 2026 Medicare Part B premium is $202.90 per month. Income-related monthly adjustment amounts begin when 2024 modified adjusted gross income exceeds $109,000 for most individual filers or $218,000 for married couples filing jointly.<\/p>\n\n\n\n

Because Medicare generally uses tax information from two years earlier, a Roth conversion, large capital gain, business sale, or taxable distribution may affect a future premium in addition to the current tax bill. That doesn\u2019t mean clients should automatically avoid a transaction near an income-related monthly adjustment amount (IRMAA) threshold. The analysis should weigh current taxes, future required minimum distributions, Medicare exposure, available liquidity, and the transaction\u2019s long-term value.<\/p>\n\n\n\n

The period between retirement and required minimum distribution age may offer a useful planning window. Traditional account owners generally begin required minimum distributions at age 73, while original Roth individual retirement account owners don\u2019t have lifetime required minimum distributions. Each decision still needs to be evaluated as part of the broader income plan.<\/p>\n\n\n\n

Questions That Make Income Planning More Actionable<\/strong><\/h2>\n\n\n\n

The planning conversation becomes clearer when clients can respond to specific trade-offs.<\/p>\n\n\n\n

Consider asking:<\/p>\n\n\n\n