create a cash flow strategy for retirement

Create a Cash Flow Strategy for Retirement

On this episode of A Wiser Retirement Podcast, Casey Smith, Matthews Barnett, CFP®, ChFC®, CLU® and Brad Lyons, CFP® talk about how to prepare cash flow in your portfolio for retirement. They describe a couple strategies for maintaining cash flow in retirement, the process of preparing for inflation, and why it’s important to invest in bonds.

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Prepare Cash Flow for Retirement

As you begin to prepare your cash flow for retirement, it is important to look at the different tools that are available to you. Some of these tools may include: social security, pension plans, traditional 401ks, Roth IRAs, and brokerage accounts. The most common in a portfolio are brokerage funds, tax-deferred funds (IRAs), and Roth assets. Once you know which tools are available to you, you can alter withdrawal strategies and spending order based on your unique need.

Strategies for Stable Cash Flow

During retirement, cash flow is one of the most important variables to manage in your portfolio. There are two main strategies you can use to create stable cash flow in your portfolio. The first strategy is to keep your healthcare costs low and to only pull money from a Roth or a brokerage account. The biggest advantage of utilizing this strategy is that it can help you keep your taxable income down. The second strategy is to have several accounts to pull money from. When you begin to do this, make sure to include both taxable and tax-free money. Fortunately, if these strategies don’t appeal to you, there are many other strategies you can use to create a stable cash flow.

Less Stress, Peace of Mind

There are a few ways to achieve less stress and peace of mind in retirement. Start by having a long-term plan. Then, create a buffer between you and market volatility. This creates a sense of security and protects your portfolio during market downturns. Another good practice to relieve stress in retirement is to multiply your current cash needs by two so there is two years’ worth of income set aside. This can ensure that you have enough income to stay retired if there is a crisis.

Prepare for Inflation

As you begin to prepare for retirement, it’s important to remember it can be difficult to stay retired due to economic factors such as inflation. Keep in mind, retiree inflation is much different than a working person’s inflation. This is due to the fact that a retiree has a set amount of money that needs to last over twenty years. During that time inflation is bound to rise. There are a couple different ways a retiree can prepare for this. The two main things a retiree can do to keep exposure to inflation to a minimum is eliminate debt and have cash reserves set aside.

Bonds in Your Portfolio

In a high inflation environment, bonds may not perform like they usually do. Don’t be scared by this. In fact, a situation such as this can benefit your portfolio because any new money you invest in bonds will most likely get a higher interest rate paid on that money. Also, it’s important to have bonds for temporary market crashes because they act like insurance for your portfolio. Overall, your portfolio should be built to withstand tough times, so try to stay invested and weather the storm.

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0:00 Intro

3:45 Prepare Cash Flow for Retirement

7:46 Strategies for Stable Cash Flow in Retirement

13:35 Less Stress, Peace of Mind

20:38 Prepare for Inflation

24:24 Bonds in Your Portfolio


Learn more about Casey Smith and connect with him on Twitter.

Learn more about Brad Lyons.

Learn more about Matthews Barnett.


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Learn more about A Wiser Retirement podcast and access previous episodes.

By Published On: April 25, 2022

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