Deciding How to Spend in Retirement
Articles about retirement savings tend to focus on the importance of contributing while you’re working, but less guidance is available to tell you how to responsibly spend your retirement savings. It can be difficult to plan your distribution strategy—avoiding both unnecessarily conservative spending that causes hardship and overspending that could cause you to run out of money.
Studies have found that many retirees withdraw only what the government's Required Minimum Distribution rules require due to fears that they will exhaust their accounts prematurely. That’s why Wespath offers LifeStage Retirement Income*, a service available at no additional cost that is designed to manage your distributions in retirement. It issues monthly payments to you from your consolidated defined contribution accounts, with a goal to make your retirement income last for your lifetime and keep pace with the cost of living.
The service cannot guarantee that your account balance will last for your lifetime. However—unlike most guaranteed products (e.g., annuities)—when you participate in LifeStage Retirement Income, your account will continue to be invested on your behalf and you can leave any remaining account balance for beneficiaries upon your death.
If you aren’t sure whether LifeStage Retirement Income is right for you, use the LifeStage Retirement Income Calculator in Benefits Access—log in to benefitsaccess.org and select Take Action > PROJECT FUTURE VALUES > Calculate LifeStage Retirement Income. EY Financial Planning Services* is also available to help you determine a distribution strategy or evaluate whether to use LifeStage Retirement Income. Planners are available business days from 8:00 a.m. to 7:00 p.m., Central time at 1-800-360-2539.
* Costs for these services are included in Wespath’s operating expenses that are paid for by the funds. EY Financial Planning Services are available to active participants and surviving spouses with account balances, and to retired and terminated participants with account balances of at least $10,000.