Most Americans nearing retirement worry about income, but few build a real plan — what advisers recommend

Many people close to retirement are anxious about replacing their paycheck, yet few have taken practical steps. Financial professionals explain how to turn that concern into a workable plan.

Although 88% of workers expecting to retire within the next decade say they think about how they will produce income, more than 75% spent fewer than five hours last year actually working on a plan, according to a recent LIMRA report.

“What’s missing is the step from thinking to doing,” says Bill Nash, head of member relations at LIMRA and the Life Office Management Association. “With only 40% of preretirees working with a financial adviser or planner, the opportunity isn’t convincing people that retirement matters. It’s helping them turn that concern into a written plan and a clear picture of their income.”

So what does a strong retirement-income plan require? We asked financial advisers.

Face the issue directly

“When a decision is big, far away and scary, our brains file it under ‘later,’ and later keeps moving,” says Matthew Chancey, a certified financial planner and founder of Tax Alpha Companies. “They’re not lazy. They’re avoiding a feeling.”

David Demming, a CFP, founder and president of Demming Financial Services, puts it more bluntly: “Denial is a wonderful thing for procrastinators. Financial planners deal with reality and with real numbers.”

To break the pattern, name the fear, says Eileen Olson, a CFP and founder of Emerald Wealth. “Name what keeps you up at night. Will I have enough? What happens if I need long-term care? How do I create a paycheck once I stop working? Write those questions down.”

Be honest about spending

“The first step that preretirees should consider is to sit down and sketch out a rough plan for their retirement,” says Arthur Ebersole, a chartered financial analyst, CFP and founder of Ebersole Financial. “Taking the time to price out your retirement activities — travel, golf, pickleball, dining out, etc. — is the only way to know if you can afford them.” He even suggests “practicing to retire” to see whether the desired lifestyle is actually enjoyable before making the leap.

Jeff Judge, a CFP, managing partner and co-founder of Chesapeake Financial Planners, says the key is to be brutally realistic. “First step: add up what you actually spend in a typical month. Not what you think you spend,” he says. “Every other number in a retirement plan hangs off that one.”

Write the plan down

Dreaming and doing are not the same thing, Judge adds. “Thinking about retirement is not a plan,” he explains. “In your head, a plan can contradict itself for years. Paper forces decisions.”

Chancey says putting the strategy on paper helps calm anxiety. “Worry runs on a loop in your head, and every pass makes it bigger,” he notes. “Paper breaks the loop. It turns a cloud of what-ifs into a short list of things to fix, and people who can see the list stop arguing with themselves about it.”

A written plan can also improve confidence. Citing Schwab’s 2024 Modern Wealth Survey, Olson notes that only 36% of Americans have a written financial plan, but three-quarters of those who do say it makes them feel more in control. “A plan that lives in your head is a wish,” she says. “A plan on paper is a decision.”

Convert investments into income

“The biggest blind spot I see in self-managed retirement plans isn’t investment selection. It’s turning a portfolio into a paycheck,” says Tyler McConville, a CFP and private wealth adviser at The Capital Group. “I often tell clients that a target-date fund can help get you to retirement, but a retirement income plan helps get you through retirement. The goal isn’t simply building a portfolio. It’s creating a plan that allows your savings to support the lifestyle you want.”

James Mayo, a CFA, CFP, founder and principal at IronFjord Wealth Management, says he helps clients set up steady monthly transfers from investments into checking accounts, aligned with Social Security and pensions. “This creates a predictable paycheck, supported by a sustainable withdrawal strategy, and helps retirees avoid both overspending and underspending out of fear,” he says.

Michael DeMassa, a CFA, CFP, founder and principal at Forza Wealth Management, says the shift from accumulation to income often requires a different asset mix. He warns against assuming the S&P 500 will simply rise steadily through retirement. “Having an allocation to short-term, high-quality bonds can be essential to managing withdrawals during periods of market stress, helping retirees avoid selling stocks at depressed prices to fund their living expenses,” DeMassa says.

Stress-test the future

Another frequent mistake is building a retirement strategy around optimistic assumptions. “Retirement confidence should be tested, not assumed,” says Mitchell Dyer, a CFP, founder and owner of Dyer Private Wealth Management. “A sound projection should examine whether income can continue through higher inflation, market declines, rising healthcare costs and a retirement lasting into the client’s 90s.”

Olson adds that a good stress test should also include unexpected events, such as a late-life divorce that divides assets, supporting adult children and aging parents at the same time, or needing long-term care.

Watch taxes and behavior

Mayo says the biggest threats to long-term wealth are often taxes and behavioral mistakes, not the investments themselves. “Someone can manage their investments perfectly well but overlook how IRA withdrawals, Roth conversions, Social Security and Medicare premiums interact,” he says. “Those decisions can have significant financial consequences over a 30-year retirement.”

Chancey says do-it-yourself planners often misunderstand pretax account balances. “People plan to the balance, not to what they’ll keep. A $1.5 million 401(k) isn’t $1.5 million of spending money, because every withdrawal is taxed as income.” He adds that many people miss the important early-retirement window for Roth conversions at lower tax rates.

Brian Wruk, a CFP at Transition Financial Advisors Group, warns that long bull markets can encourage herd behavior. “People keep investing in what has gone up, they don’t rebalance and become heavily concentrated in what has done well,” Wruk says. “Those nearing retirement could be putting their retirement at risk because they are not diversified.”

Know how to find help

For anyone ready to work with an experienced professional, knowing where to look is half the challenge, says Lawrence Pon, a CFP, founder and principal at Pon & Associates. He says one of the biggest risks is ending up with a salesperson instead of a fiduciary adviser. “They meet an insurance salesperson and they get sold annuities. Or they go to their bank and they are sold products by their bank,” Pon says, noting that these representatives may have conflicts of interest. For objective starting points, he recommends local Financial Planning Association chapters that offer pro-bono, no-strings-attached advice days.

Wruk says the first step should be finding a “fee-only, fiduciary adviser” who is legally required to act in the client’s best interest. Mayo adds that there are now many ways to get help, depending on need.

“Many people assume they have to pay an adviser a percentage of their investments, but that’s not the case,” Mayo explains. “DIY investors can hire a fiduciary planner for an hourly or one-time review, while those wanting ongoing retirement planning and investment management can find comprehensive flat-fee firms. Understanding compensation and potential conflicts of interest is an important starting point.”