🧭 Planning for Good: Building Your Retirement Income Floor
A one-page guide to help you visualize secure income in retirement
What is an Income Floor?
Your income floor is the foundation of your retirement cash flow—the portion that’s steady, predictable, and not tied to market performance. It’s designed to cover your essential expenses so you can navigate retirement with confidence, even during market downturns or long life expectancy.
Think of it as your financial safety net: income that continues for life (and sometimes your spouse’s life), regardless of market conditions.
💡 Why It Matters
- Helps protect against outliving your portfolio
- Provides peace of mind during volatile markets
- Supports consistent cash flow for essentials
- Anchors your broader retirement income strategy
🔐 What Counts as Income Floor?
| Reliable Income Sources | Variable Income Sources |
|---|---|
| ✅ Social Security | ⚠️ Portfolio withdrawals |
| ✅ Pensions | ⚠️ Rental income (if unstable) |
| ✅ Guaranteed annuities | ⚠️ Business income (if seasonal) |
🧾 What It Should Cover
Your income floor should be enough to meet your necessary expenses, such as:
- Housing (mortgage, rent, taxes, maintenance)
- Food and utilities
- Health care premiums and out-of-pocket costs
- Insurance
- Transportation
- Basic lifestyle needs
Discretionary spending—travel, gifts, hobbies—can be funded from more flexible sources like portfolio withdrawals or part-time work.
⚖️ Tradeoffs to Consider
- Liquidity: Some income floor tools (like annuities) may limit access to principal
- Inflation: Fixed income may lose purchasing power over time
- Legacy goals: Guaranteed income may reduce assets available for heirs
🧠 How Income with a Floor Might Compare to Expenses
- Start by estimating your monthly “must-have” expenses
- Identify which income sources are guaranteed vs. variable
- Consider layering annuities or delaying Social Security to strengthen your floor
- Review with your financial planner to align with your values, goals, and risk tolerance
🧠 Planning for Good Tips
- Start by estimating your monthly “must-have” expenses
- Identify which income sources are guaranteed vs. variable
- Consider layering annuities or delaying Social Security to strengthen your floor
- Review with your financial planner to align with your values, goals, and risk tolerance
If you'd like to learn how we can create a retirement income plan specific to your individual needs, contact us to request a discovery call: https://www.planningforgood.financial/get-in-touch