What’s the Role of Financial Planning in Retirement?

Is a financial planner’s job done when you reach retirement? Far from it. In fact, saving for retirement is only half the job.

When you’re saving, known as the accumulation phase, a financial professional can help you balance tax-efficient retirement savings with budgeting and protecting your finances so you can enjoy the life you want to live each day.

At retirement, you enter the decumulation phase. You’re shifting from saving to generating income from your savings — the script gets flipped. And the decumulation phase tends to be more difficult, as it requires even more strategic planning and technical expertise. A financial professional can help you ensure your savings last through your life, the legacy you want to leave behind is protected and your retirement is everything you always envisioned it would be.

“Descending a mountain is more difficult and dangerous than the climb up,” says Andrew Weber CFP®, CLU®, AEP®, RICP®, WMCP®, a wealth management lead at Northwestern Mutual. “An advisor, like a financial Sherpa, is trained to not only get you to, but also through, your retirement years. “

Here are a few reasons why financial planning in retirement is critical, and the powerful role a financial planner can play to help it all go smoothly.


During your working years, you probably collected most of your income from a single source: your job. In retirement, rather than a single paycheck your income funnels in from a variety of sources, such as your 401(k), Social Security, annuities, pensions, Roth or traditional IRAs, cash value life insurance, etc. That’s because, over decades, you’ve essentially constructed an income-generating machine with a lot of moving parts.

The thing is every single source of income comes with different rules and tax treatment. Some of your income may be tax free; some may be taxed. Some of your income may be guaranteed, while other sources may fluctuate with the markets. An IRA, for example, requires you to withdraw a minimum amount each year to avoid penalties (known as an RMD). What’s more, your income level in retirement can impact everything from Medicare surcharges to capital gains taxes. A financial professional has the experience and a host of technological tools at his or her disposal to generate income in the most efficient way possible.

“It’s critical to monitor the tax implications of your sources of income and the order in which you take money out of accounts,” says Weber.  “You can generate 10 percent or more income from the same amount of savings through optimal sequencing of your withdrawals.”


Saving for retirement is straightforward: contribute regularly to your accounts. But in retirement every financial decision is more nuanced. Each dollar spent, or unspent, will impact several goals simultaneously — and, quite often, they are diametrically opposed. For example, there’s the dual challenge of spending what you want for a fulfilling retirement while also ensuring your money lasts the rest of your life.

“If you’re planning to pass on some of your wealth to your family or charity, you also have the challenge of maximizing your spending while also leaving as much money as possible,” says Weber. “There are tradeoffs when calculating the amount of retirement spending and leaving a legacy.”

But a financial professional can create a plan for you that maximizes your income and your desired legacy targets while making sure your investment and annuity decisions are well thought out and coordinated so you are implementing ideas that are working cohesively toward your goals.

RELATED CONTENT: How much do I need for retirement? Our retirement planning guide can help you better understand the road to retirement — and how to craft a financial plan that’s built around your unique goals.


Managing asset allocation and monitoring inflation aren’t on many retirement bucket lists.

Markets are unpredictable, healthcare costs are rising, inflation can erode the value of your savings. There are a host of financial uncertainties to consider, but you don't necessarily need to be the one worrying about them.   

“You want to maximize your happiness and create memories with your loved ones in retirement, not fret about stocks and bonds in your portfolio,” says Weber.

A financial professional can help account for life’s uncertainties and adapt your plan accordingly. That’s especially helpful when markets get volatile or your health needs — and costs — change. They are an unbiased financial coach who can give you a different perspective. They’re a step away from the emotions of the moment. And, having worked with numerous retirees in similar situations, they can home in on a strategy and help you be successful even in the most challenging times.

“You don’t get a second chance to retire, so you want to do it right,” says Weber. “A good plan can help you do just that.”

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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