Do you feel anxious - or even a bit guilty - every time you withdraw from your retirement savings? Whether you recently retired or are already a few years in, it can be hard to go from saving to spending mode. Here are some strategies to help you get more comfortable with this transition.

Remember how you got here and where you're going
You likely prepared for years for this. Saving. Making sacrifices. Your hard work has paid off, and you finally made it. It's time to make all those dreams a reality, and guilt doesn't have a role in it. It's time to enjoy your retirement with confidence.

If you don't already have a monthly budget, create one by calculating your monthly expenses. This will help you figure out how much income you need each month to cover them.

Next, consider creating a retirement "paycheck"
When you were working, you received a paycheck. That doesn't have to end in retirement. Now, instead of relying on an employer to pay you, you're paying yourself. Here's how to do it:

  1. Consider a separate account for retirement spending. This will make it easier to keep these funds separate from your other investments and allow you to see exactly what you have available for spending.
  2. Plan to have a year's worth of income needs in the account, funded by outside sources (Social Security, pensions, etc.), payments from annuities (if applicable) and the amount you need from your portfolio. This amount should be separate from the cash you set aside for emergencies.
  3. Continuously maintain the balance so that you always have a year's worth of cash in the account.

The accounts and investments you use to "refill" the balance in the account may vary from year to year depending on your investment and tax considerations, but you can use this sequence as a guide:

  • Outside income sources, such as Social Security and pensions
  • Withdrawals from annuities and lifetime income (if applicable)
  • Required minimum distributions (RMDs) from retirement accounts (if applicable)
  • Dividends and interest from taxable accounts (including municipal bond interest)
  • Sales from your investments, starting with taxable accounts, followed by traditional retirement accounts and, finally, Roth retirement accounts

Start smart – and regularly review your strategy
Transitioning from saving to spending is a lot easier when you have someone to guide you. A financial advisor who understands you and your goals can help ensure you are spending at a rate that can provide for your needs today, as well as provide for your needs well into the future, and then review this strategy over time to ensure you remain on track.