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A Well-Defined Retirement Income Plan

February 13, 2021

Published in All About Seniors Fall/Winter Edition

A Well-Defined Retirement Income Plan

by Rick Durkee

Have you ever started a boat trip or cruised without a captain, without a navigational course charted, or heaven forbid without a rudder or steering mechanism??? If you don’t have a plan in place before it’s time to set sail (or it’s your time to retire) how can you chart a course properly to navigate the different risks, issues, and opportunities that will occur during a twenty to thirty-year or longer retirement?

Over the last twenty-plus years of working with individuals and business leaders on retirement planning, we have found that those who have followed a process in their working careers were much more successful at making proper financial decisions regarding their retirement. For example: A surgeon must carefully follow a well-defined process to achieve a successful surgery and an architect must draft a set of building plans before the builder can start ordering materials or can begin construction. Most people who are accustomed to following a process in their working lives can then apply those process development principles to help them easily develop their plan to achieve their retirement goals. Simply stated…Retirement planning is much more effective when you follow a well-defined process.

But, those of us who have been successful in our work lives can still feel at a loss when it comes to planning effectively for retirement because we don’t know where to begin (we don’t have a process). You may be eager to “jump in” and get started, but how can you start if you don’t even know what questions to ask to get the information you need to start on the right track? Here’s how…follow a process based on facts and logic instead of myths, misconceptions and incomplete information.  Retirement decisions are often like squeezing toothpaste out of the tube; once you squeeze the tube, you can’t put the toothpaste back in! If you proactively develop a well-defined retirement income plan first, you can avoid making critical financial mistakes (that often cannot be reversed).

Defined Outcome Investing

What if you could define your investment results and feel confident that they were achievable within your desired time frame and also taking into account the amount of risk you are willing to take?

Defined outcome investing allows you to earmark your retirement based assets to create income and/or growth based on parameters you set for risk and return in order to achieve a high probability for success in meeting your goals for growth and income in retirement.

There are two methods of defined outcome investing:

  1. Growth investing. When you are investing in your pre-retirement years you want to make sure to focus on growth investing. During your accumulation years you’re typically willing to take on more risk because you have a longer time horizon before you plan on using your money.
  2. Income investing. In your retirement years however, a shift occurs from accumulation or growth of your wealth to a “spend-down“ of a portion (or all) of your retirement assets…and risk is reduced to achieve the desired income you need (your desired outcome of a well-defined retirement income plan).

Transitioning from growth investing to income investing during the retirement red zone (the 5-10 years prior to and the 5-10 years after retirement) is critical in order to increase the probability of a successful retirement where your retirement assets don't run out before you do! Having this well-defined retirement income plan (combined with a defined outcome investment plan) can also reduce market risk, longevity risk, and sequence of returns risk. These are three critical risks in retirement that must be avoided when we are withdrawing from our investments to create retirement income.

Defined Income Planning

Remember the analogy that I used in the beginning of this article with the boat without a rudder? Developing a retirement income plan before you develop strategies of how to invest will help you increase your odds for a successful retirement. If you don’t have the navigation plan in place first, how can you possibly know which investments to steer toward to accomplish your goals?

Having a well-defined retirement income plan will incorporate your expenses, your sources of income, and your timeframe of how long the assets earmarked for retirement “spend down” should last. A well-known financial author, Anthony Robbins, has been quoted as saying “old and broke are two things I do not want to experience at the same time in retirement.” Having a well-defined income planning process that generates a written income plan (created and reviewed annually by your personal CFO or financial planner) can help you avoid many of the risks retirees face while assisting you to “chart your course” and navigate properly throughout your retirement years.

Join Rick Durkee for his weekly podcast called “Navigating Retirement” visit

A Well-Defined Retirement Income Plan

Rick Durkee, LUTCF® is President, Founder and Chief Investment Advisor at Coastal Financial Planning Group.  Since founding the Coastal Financial Planning Group in 2003, he has served his clients and the community by offering advanced retirement planning solutions for individuals and business owners. Rick’s core values for helping people understand their retirement needs and the kind of planning required for meeting those goals is apparent to the listeners of his two informative podcasts, Christian Business Values & Navigating Retirement, available on all major platforms. For more information on Coastal Financial Planning Group visit or call (843) 735-5065

Rick Durkee, LUTCF® is President, Founder and Chief Investment Advisor at Coastal Financial Planning Group
Rick Durkee
(843) 735-5065