Retirement planning doesn’t stop just because you leave the workforce. Even if you’ve followed a retirement savings plan throughout your working years, it’s just as critical to have a solid plan for your assets post-retirement. The following tips will help map a financial route through retirement to protect your nest egg for years to come.

A Shift in Cash Flow

To start, recognize the ways cash flow will be changing. Your income will likely shift from a paycheck to variety of sources, including Social Security benefits, pension distributions, and annuity payments. You may even generate income from part-time employment, gig work, or sales of assets. And once you reach age 72 or older, you will be required to take minimum distributions from your IRA and 401(k) retirement plans. This means that you will be receiving funds from different sources at different intervals, so it’s beneficial to set up direct deposit services wherever possible.

Consider the 4% Rule

The 4% rule is the idea of withdrawing 4% of retirement savings in the first year of retirement, and then continuing to withdraw the same amount, adjusted for inflation, in order to sustain your nest egg for approximately 30 years. For instance, if you’ve amassed $500,000 in retirement savings, you would withdraw $20,000 in your first year of retirement using the 4% rule. For each following year, you would modify this withdrawal amount by adjusting for inflation. If inflation is 3% during the second year of retirement, you could increase your annual withdrawal to $20,600.

Keep in mind that the 4% rule isn’t an actual rule — it’s more of a guideline, where additional factors can affect individual adjustments. Starting with 4% as a basic annual withdrawal rate is a good jumping off point, and then adjust downward from there. For example, a lower withdrawal rate would make sense if you retire before age 70, or if you want to retain a cushion against a market downturn and any emergency expenses that may pop up.

Consider Asset Allocation

You can help your retirement savings last by adjusting your mix of assets, which lowers your overall portfolio risk. Younger retirement savers don’t need to place as much weight on market ups and downs because they have time to recoup any losses, but those who are nearing a workforce exit should focus on protecting their nest egg. Once you’ve entered into retirement, you’ll want a low-risk portfolio in order to preserve what you’ve saved and generate income.

You can lower your risk by shifting your asset mix from a strategy that prioritizes wealth accumulation to one that prioritizes income generation and the safeguarding of investments. This means shifting from a growth-focused portfolio (70%-100% stocks) to an income-focused portfolio (70%-100% bonds).

Consider Long-Game Allocation Strategies

The following asset allocation options will help stretch your wealth throughout retirement.

• Choose a target-date fund. Also known as a life-cycle fund, a target-date fund is a type of “set it and forget it” retirement savings option that is designed to age with you by automatically adjusting your asset mix from growth investments toward more conservative investments as retirement draws closer.
• Establish a two-fund portfolio. This simple asset allocation strategy consists of buying two broad market index funds or exchange traded funds (ETFs), one for stocks and one for bonds. In your younger working years, you can allocate the majority of funds to your stock option, but as you near retirement, you’ll start shifting more allocations to your fixed-income bond fund.
• Make a custom portfolio. If you prefer a more individualized approach, select a combination of individual stocks and bonds. As you approach retirement, gradually sell some of your stock holdings and reinvest in fixed income funds.

Consider Withdrawal Sequencing

You want your tax-advantaged retirement accounts to compound for as long as possible, so it’s commonly recommended to withdraw from taxable accounts first, followed by tax-deferred accounts, and finally tax-exempt accounts such as Roth IRAs and 401(k)s. However, keep in mind that your method of withdrawal sequencing should be personalized according to your unique circumstances, but withdrawing from taxable accounts first is a reliable jumping off point.