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This is a common retirement question since you’ve spent your life accumulating savings. Now, it’s time to use your retirement savings for income.

Most people move money into an IRA and spend from those accounts. For example, you might roll money out of your old 401(k) or 403(b) plans and combine everything into a single IRA with a financial advisor or discount brokerage. Then, you can withdraw money in several ways:

You can establish monthly (or other periodic) transfers to your checking account
You can take a lump sum out when large expenses come up
Logistically, it’s pretty straightforward to spend from your savings. Any IRA provider allows you to link to your bank account, and you can sell investments to fund your withdrawal. Just be aware of any costs or penalties for taking withdrawals, depending on where you invest. Also, be aware that withdrawals from retirement accounts may result in taxable income, so it’s smart to ask a financial planner and tax advisor what the consequences might be.

The key is to manage those withdrawals so the money lasts for the rest of your life.

Your age is important for retirement planning. For many people, it’s best to wait until your full retirement age (or later) to take your Social Security retirement benefit. You can claim as early as age 62, but when you do that, you get a reduced benefit. That reduction can end up costing you over the long term, and if a surviving spouse takes over your payment after your death, they will be stuck with that reduced amount.

You can delay claiming until age 70, which results in an increase of roughly 8% per year (technically, the calculation looks at each month, so you don’t have to wait until your birthday). But after 70, there’s typically no benefit to waiting.

Sample chart from Social Security Administration showing benefit amount at different ages

Your age is important for retirement planning. For many people, it’s best to wait until your full retirement age (or later) to take your Social Security retirement benefit. You can claim as early as age 62, but when you do that, you get a reduced benefit. That reduction can end up costing you over the long term, and if a surviving spouse takes over your payment after your death, they will be stuck with that reduced amount.

You can delay claiming until age 70, which results in an increase of roughly 8% per year (technically, the calculation looks at each month, so you don’t have to wait until your birthday). But after 70, there’s typically no benefit to waiting.

If you have known health issues that will result in a shorter-than-average life, it could make sense to claim earlier. It also makes sense in other limited circumstances, but it’s critical to understand that you may lose out on a substantial amount of money when claiming early.

Healthcare is an ever-changing piece of retirement. But during your working years, your employer probably paid premiums for you. When you retire, you’re responsible for those costs. You will likely use Medicare when you reach age 65, and you can buy additional coverage to augment traditional Medicare (known as Medigap or Medicare Advantage plans).

For an oversimplified estimate, a 65-year-old woman might expect to spend roughly $7,000 on healthcare in her first year of retirement. But healthcare is more complicated than that, and costs rise as you age. Fidelity says that a couple might spend $295,000 out-of-pocket on healthcare costs during a typical retirement. That includes premiums, copays, dental and vision care, and other items—but ignores potential long-term care costs.

If you retire before age 65, it’s even more complicated. You may need to buy insurance from a private carrier, switch to a spouse’s plan (if that’s an option), or use COBRA or your state’s continuation program.

This is a common retirement question since you’ve spent your life accumulating savings. Now, it’s time to use your retirement savings for income.

Most people move money into an IRA and spend from those accounts. For example, you might roll money out of your old 401(k) or 403(b) plans and combine everything into a single IRA with a financial advisor or discount brokerage. Then, you can withdraw money in several ways:

• You can establish monthly (or other periodic) transfers to your checking account
• You can take a lump sum out when large expenses come up

Logistically, it’s pretty straightforward to spend from your savings. Any IRA provider allows you to link to your bank account, and you can sell investments to fund your withdrawal. Just be aware of any costs or penalties for taking withdrawals, depending on where you invest. Also, be aware that withdrawals from retirement accounts may result in taxable income, so it’s smart to ask a financial planner and tax advisor what the consequences might be.

The key is to manage those withdrawals so the money lasts for the rest of your life.

You can retire whenever you have the financial resources to stop working, but sometimes that’s not a choice. In fact, 40% of people reported being forced into retirement earlier than planned, primarily due to healthcare issues (caring for themselves or a loved one) or changes at their job. That statistic comes from the Employee Benefit Research Institute (EBRI).

The median retirement age is 62, according to EBRI.

Working longer can dramatically improve your chances of retirement success. The strategy can help in several ways:

• Improve Social Security and pension calculations: Social Security looks at your 35 highest-earning years to calculate your monthly retirement benefit. Pensions might look at your highest three years of earnings. By working more (typically in your best earning years, after you’ve earned promotions and seniority), you can improve those numbers.
• Delay taking Social Security or pension income: By starting retirement income at a later age, you typically get more each month.
• Fund fewer years of retirement: It may sound morbid, but you reduce the number of years between your retirement and your death. As a result, it’s easier to fund retirement.
• Opportunity to save more: As you keep working, you might be able to set aside funds in a retirement account—maybe even with matching funds from your employer.

Taxes reduce the amount you can ultimately spend in retirement, so it’s crucial to understand how much after-tax spending you can afford. A detailed financial plan with year-by-year cash flow projections can help you understand the impact of taxes.

When you withdraw money from pre-tax retirement accounts, you typically report that amount on your taxes and you may owe income tax. Those accounts include things like traditional IRAs, pre-tax 401(k) or 403(b) balances, SEP and SIMPLE plans, and more. Withdrawals from Roth-type accounts may come out tax-free—as long as you meet all IRS requirements.

Retirement income can also cause tax consequences. In many cases, your pension income is taxable. Social Security income may also be partially taxable, depending on other items on your tax return. You could potentially owe taxes on up to 85% of your Social Security benefit.

With smart planning, it may be possible to optimize the amount you pay in taxes and maximize the amount you can spend. Strategies include planning when and how you take income and withdrawals from different sources. It could even make sense to pay taxes before you really need to—on purpose—in an attempt to avoid higher taxes down the road. Roth conversion strategies do just that.

As you work toward retirement, the most important things you can do are save money and maximize your income. Also, living below your means is helpful—it helps you save money, and you’ll be able to live on a lower amount in retirement, which is more important than most people realize.

You can read more about how to retire from start to finish, including tips on where to save money and how much to save. It’s important to be a smart investor as you accumulate assets, but investing isn’t necessarily the most important thing, and it’s easy to get lured into fancy investing strategies that hurt your chances of retirement.