Planning for healthcare, both before and in retirement, isn’t fun or glamorous. It’s not as exciting as planning for travel or hobbies in retirement. But it’s absolutely essential. Without adequate healthcare coverage and planning, a single medical crisis can severely impact your financial sustainability, inhibit your ability to be generous, and move you from self-supporting to dependent—not gradually as part of natural aging, but suddenly through preventable financial catastrophe.

The Caregiving Principle requires that we plan wisely for healthcare, both for ourselves and for aging parents, whom we may help navigate this complex system.

Biblical foundation

Some Christians feel uncomfortable with healthcare planning. Can’t we just trust God to keep us healthy? Shouldn’t we just trust God to provide for our healthcare bills when they show up? Doesn’t all this planning demonstrate a lack of faith?

Not at all. Consider these biblical truths:

God values our bodies. “Do you not know that your bodies are temples of the Holy Spirit, who is in you, whom you have received from God?” (1 Corinthians 6:19). Caring for our health is stewardship of God’s gift.

Planning is wisdom, not a lack of faith. “The prudent see danger and take refuge, but the simple keep going and pay the penalty” (Proverbs 27:12). God gave us minds to think ahead and plan accordingly.

Provision includes healthcare. The apostle John wrote, “Beloved, I pray that all may go well with you and that you may be in good health, as it goes well with your soul” (3 John 2). God cares about our physical health as well as our spiritual health.

Wise stewardship honors God. When we plan carefully for healthcare costs, we maintain our financial sustainability (the Self-Sustaining Principle), which enables us to continue serving and giving (the Ministry Principle) and reduces unnecessary burden on family (the Caregiving Principle).

Healthcare planning isn’t about trusting in insurance rather than God. It’s about viewing insurance as a gift from God, to be used wisely to steward the resources God has provided for preparing for predictable needs.

Bridging the gap

If you retire before 65, you’ll need to bridge the gap to Medicare eligibility. This can be one of the most expensive aspects of early retirement.

Here are your main options:

1. COBRA: Continue your employer coverage for up to 18 months (you pay full premium plus 2% admin fee—typically $700-1,500/month per person)

2. ACA Marketplace: Individual coverage through Healthcare.gov (premiums vary wildly, but subsidies are available based on income)

3. Spouse’s employer plan: If your spouse is still working

4. Health-sharing ministry: Christian alternatives such as Medi-Share, Samaritan Ministries, or Christian Healthcare Ministries ($200-$600/month; not insurance; payments are not guaranteed). Note: Some healthshares push members toward outside charity/aid before approving payment. It’s sometimes framed more broadly as seeking charity care, benevolence funds, or government assistance first. Check on this for any healthsharing plan you’re interested in, should this concern you.

5. Private insurance: Individual plans outside the marketplace (usually more expensive, no subsidies)

Key planning point: If you retire at 62, you need 3 years of coverage until you’re eligible for Medicare. At $1,000 per person per month, that’s $72,000 for a couple. This needs to be part of your “Can I afford to retire?” calculation.

Health Insurance Options Before Medicare Updated 2026) examines the primary health insurance options available to early retirees (those retiring before Medicare eligibility at age 65), covering five main pathways: (1) COBRA continuation coverage, which allows former employees to keep their employer-sponsored health insurance for up to 18 months but requires paying the full premium plus a 2% administrative fee, making it expensive but valuable for maintaining current coverage and doctors; (2) ACA Marketplace plans purchased through Healthcare.gov, which offer comprehensive coverage with potential premium subsidies for those with lower incomes (making them often more affordable than COBRA for many early retirees); (3) Spouse’s employer-sponsored insurance, if the spouse is still working and the plan allows dependent coverage; (4) Retiree health benefits offered by some larger employers, public sector agencies, or union jobs as a separate benefit from COBRA; and (5) Medicaid for those meeting income and eligibility requirements in states that expanded coverage under the ACA.

Counting the cost

Let me be direct: Healthcare will be one of your largest expenses in retirement, and it’s not optional. The longer you live, the higher the cost is likely to be.

According to Fidelity’s most recent estimates, a 65-year-old couple retiring in 2025 can expect to spend approximately $315,000 on healthcare costs throughout retirement. That’s up from $260,000 just a few years ago. And that number doesn’t include long-term care, which we’ll address in the next article.

Think about that: $315,000. That’s roughly 15% of a $2 million retirement portfolio. For someone with $500,000 saved, it’s more than 60% of their entire nest egg.

And unlike other retirement expenses that might be discretionary—travel, hobbies, dining out—healthcare costs aren’t negotiable. You need healthcare coverage. Period.

This cost includes much more than out-of-pocket medical expenses. Here’s what that $315,000 covers:

• Medicare Part B premiums (paid monthly from the day you enroll)

• Medicare Part D premiums (prescription drug coverage)

• Supplemental insurance premiums (Medigap or Medicare Advantage)

• Deductibles, co-pays, and co-insurance

• Dental care (not covered by Medicare)

• Vision care (not covered by Medicare)

• Hearing aids (not covered by Medicare)

• Out-of-pocket expenses for services

What it doesn’t include:

• Long-term care (assisted living, nursing homes)

• Experimental treatments

• Most cosmetic procedures

• Alternative medicine

The reality is even more sobering when you consider that healthcare inflation typically runs 2-3% higher than general inflation. While overall inflation might average 3%, healthcare costs often increase at 5-6% annually. What costs $10,000 today could cost $13,000–$18,000 in 10 years, depending on whether inflation runs at 3% or 6%.

Planning and budgeting for healthcare in retirement

Regardless of when you retire, you need a plan for funding your healthcare expenses.

Some retirement planners say that living expenses will be lower than they were when you were working full-time. I’m sure that’s true for some, if for no other reason than necessity. However, for many, they are likely to be the same as or higher than. I could have referenced this article in the “Self-Sustaining” series, but I saved it for here to highlight the importance of planning and budgeting for healthcare expenses in retirement.

Does Retirement Cost Less As We Age? (Updated 2026) challenges two common retirement assumptions—that retirees can live on 70-90% of pre-retirement income and that expenses decline steadily with age—by demonstrating that retirement spending actually follows a U-shaped “retirement spending smile” pattern rather than a simple downward trajectory. While many expenses may decrease modestly (about 7-8% over ten years according to Boston College research), this is often offset by inflation, and the pattern varies significantly across retirement phases: higher spending during the “go-go years” (ages 60-75) on travel and recreation, moderate spending during the “slow-go years” (ages 75-85), and potentially rising costs again during the “no-go years” (ages 85+) due to healthcare and long-term care needs. The article emphasizes that healthcare costs—estimated at $345,000 for a couple retiring at 65 according to Fidelity—don’t decrease with age and that long-term care (which 70% of retirees will need and Medicare doesn’t cover) represents the biggest wild card, with costs ranging from $60,000-140,000 annually depending on the type of care. Additionally, senior household debt has increased dramatically (from 43% carrying debt in 1992 to 65% in 2025, with median debt rising from $7,294 to $41,000), and many retirees face unexpected expenses helping adult children or aging parents, making the simple answer to “do expenses decline with age?” a nuanced “maybe, but not as much as you hope, and not in a straight line”—requiring retirees to plan for spending variability, maintain healthcare sinking funds, address long-term care risk, and balance biblical contentment with practical financial flexibility.

Obviously, the cost equation changes when you become Medicare eligible.

Healthcare should be treated as a non-discretionary essential expense in your retirement budget, just like housing and food.

For a detailed breakdown of healthcare expense categories and guidance on building a comprehensive healthcare budget, see my article below. It walks through specific strategies for estimating your costs, using HSAs effectively, and ensuring you save enough before you become eligible for Medicare.

Planning for Health Care Expense in Retirement (Updated 2026) provides realistic healthcare cost projections and planning strategies for retirees. According to Fidelity’s 2025 estimates, a 65-year-old couple can expect to spend approximately $315,000 on healthcare throughout retirement (a 28.5% increase from 2016’s $245,000 estimate), with typical annual costs of $12,000-$15,000 consisting of Medicare Part B premiums ($185/month per person in 2026), Medigap Plan G coverage (~$175/month per person), Part D prescription drug coverage (~$50/month per person), plus out-of-pocket costs for deductibles, co-pays, dental care, vision care, and hearing aids—none of which are covered by Original Medicare. The article explains the complexities of IRMAA surcharges (income-related premium increases that can add thousands annually for higher-income retirees), details the difference between Medicare Advantage and Original Medicare plus Medigap, and provides specific action steps for three groups: pre-Medicare workers (maximize HSA contributions, plan for the coverage gap if retiring before 65), those within two years of Medicare (understand enrollment periods, compare plans, avoid late-enrollment penalties), and current Medicare beneficiaries (review coverage annually during October 15-December 7, watch for IRMAA letters, maintain healthcare sinking funds).

Healthcare planning for aging parents

The Caregiving Principle isn’t just about your own healthcare—it’s also about helping aging parents navigate their healthcare needs.

Questions to ask your parents:

1. Do you have Medicare Parts A, B, and D?

2. Do you have Medigap or Medicare Advantage?

3. Are you aware of your IRMAA status? (Could Roth conversions or income timing reduce their Medicare premiums?)

4. Do you have a list of your medications?

5. Do you know which doctors/hospitals are in-network?

6. Do you have supplemental dental/vision coverage?

7. Who has the power of attorney for healthcare decisions?

8. What are your wishes if you become unable to make medical decisions?

Ways to help:

• Attend important doctor appointments with them

• Help organize their medications (pill organizers, reminders)

• Review their Medicare statements for errors

• Assist with insurance claims and appeals

• Coordinate care between multiple specialists

• Ensure bills are being paid on time

• Help them review Medicare plan options during open enrollment

This isn’t about taking over—it’s about supporting them while they maintain independence as long as possible.

Action steps

Healthcare planning can feel overwhelming, but it doesn’t have to be. Here are specific action steps:

If you’re 5+ years from Medicare:

1. Maximize HSA contributions if you have a high-deductible health plan (triple tax advantage)

2. Build healthcare into your retirement budget projections ($12,000-15,000/year minimum for a couple)

3. If planning to retire before 65, research ACA marketplace subsidies based on projected retirement income

4. Consider how healthcare costs affect your “How much is enough?” calculation

If you’re within 2 years of Medicare:

1. Mark your calendar for the Initial Enrollment Period (3 months before, the month of, and 3 months after your 65th birthday)

2. Decide if you’ll delay Part B (only if you have creditable employer coverage of 20+ employees)

3. Research Medigap vs. Medicare Advantage for your area

4. Get Medigap quotes during your Medigap Open Enrollment Period (6 months after enrolling in Part B) while you have guaranteed issue rights

5. Compare Part D plans using Medicare.gov plan finder with your actual medications

If you’re already on Medicare:

1. Review your coverage every October during the Annual Enrollment Period (Oct 15-Dec 7)

2. Check if your current Part D plan still covers your medications at the best price

3. Verify your doctors are still in-network (Medicare Advantage)

4. Budget accurately for premiums, deductibles, and out-of-pocket costs

5. Watch for IRMAA letters from Social Security (based on 2-year-old tax returns)

If you’re helping aging parents:

1. Have “the conversation” about their current coverage

2. Offer to help review their options during open enrollment

3. Organize their medical information (medication list, doctor contacts, insurance cards)

4. Ensure they have healthcare power of attorney documents

5. Add yourself to the HIPAA authorization so you can discuss their care with providers if needed

Peace comes from planning

Healthcare costs are real, they’re significant, and they’re not optional. But they’re also predictable enough to plan for.

When you understand Medicare, budget appropriately, and choose coverage that fits your situation, healthcare stops being a source of anxiety and becomes simply another aspect of faithful stewardship.

This is part of the Caregiving Principle: We prepare well so that when we need care—and we will need care—we can receive it without creating a financial crisis for ourselves or our families.

The Self-Sustaining Principle calls us to financial sustainability. Healthcare planning is essential to achieving that sustainability. Without adequate coverage, one serious illness could wipe out retirement savings that took decades to build.

The Caregiving Principle calls us to prepare to receive care with dignity and gratitude. That preparation includes ensuring we have the healthcare coverage to receive the medical care we need.

In our next article, we’ll tackle the even more challenging topic of long-term care—what it is, what it costs, and how to plan for it. Unlike Medicare, which is available to everyone at 65, long-term care requires more complex planning and decision-making.

But for now, focus on getting your Medicare coverage right. It’s the foundation of all your healthcare planning in retirement, and it’s worth the time to understand it well.

Because faithful stewardship includes caring for these bodies that God has given us—temples of the Holy Spirit—throughout all the seasons of our lives, including our years of weakness and dependence.

I like this kind of stuff because, as a former IT architect, I get to apply my experience to everyday problems. So, I want to start with a basic high-level ”architecture” of what I’m going to call your ”personal information security domain.”

In many ways, this is similar to how businesses view their internal security challenges, but theirs is more sophisticated and complex for many reasons.

How breaches happen—and how they don’t

I may be oversimplifying this, but most major historical data breaches (insurers, credit bureaus, hospitals, retailers) succeeded not because attackers broke the encryption, but because they got hold of the decryption keys the company itself had to make accessible somewhere. (A decryption key is the piece of data required to convert encrypted information back into its original, readable form. Think of encryption as locking your data in a scrambled state, and the decryption key as the specific key that unlocks it. Without it, the encrypted data is just unreadable noise, even to whoever’s holding it.)

Here is a graphic I put together to help describe how this happens in some environments with different information security architectures and how a zero-knowledge password vault architecture is better:

To compare them, let’s assume the same breach attempt occurs in two different scenarios. The difference lies entirely in what the attacker finds once they’re “in” (which is what actors on TV and in movies always say when they hack a system: “I’m in,” which usually takes much longer than the 10 seconds it does in the show or movie).

On the left, the data and the decryption keys to open it live in the same place (on the same servers or in the same data center, sometimes both), so a breach gives the attacker both halves of the solution together in one place, so the problem (access to the data) can more easily be solved at once, and your confidential data is compromised.

On the right, the provider with the zero-knowledge architecture only ever holds the locked box—the password “vault.” It’s called “zero-knowledge” because the provider—the company running the servers—has zero knowledge of the actual contents of your vault. Not “very little,” not “encrypted but technically accessible,” but actually none. The term comes from the broader concept of cryptography’s “zero-knowledge proof,” in which one party can prove something is true without revealing the underlying information.

The key that opens it (your decryption key) never leaves your device, so the same breach hands the attacker something they still can’t read because it’s encrypted, so your data “stays locked.”

Several reputable password managers (like Bitwarden and 1Password) use this zero-knowledge architecture: the provider never has your master password, your decryption key, or a decrypted copy of your vault. Decryption happens locally on your device using a key derived from your master password.

This is one reason why having a very strong master password is so important. If the vendor’s servers are breached but you use a strong master password, an attacker who steals the encrypted vault would almost certainly be unable to decrypt the information. Also, if you ever get word from the provider that a breach has happened, immediately change your most important passwords, then the rest as soon as practical.

Your personal “security domains”

Now, let’s take this a little further to see how this fits in this particular context. Here’s another simple diagram illustrating this specific security problem domain of estate planning and communication to, and access by, your heirs, which includes several subdomains best understood as “nested layers” that could be compromised. The deeper the layer, the more damage a breach causes, which is why the strongest protection needs to be at the center, which was represented by the zero-knowledge vault in the previous diagram, and each outer layer is a chance to stop trouble before it reaches the next layer and the next. I’ll explain the best practices for protecting each layer in this context.

People & physical environment: This is the layer we are concerned about with the instruction letter. Protection here isn’t a password at all; it’s who knows what. Nobody should have the master password; instead, the people you trust should have a path to it (an emergency access feature or a sealed letter from an attorney—more on that shortly)

Devices: These include screen lock/biometrics, automatic OS updates, anti-virus/malicious software updates, and treating a lost or stolen phone as a “change my passwords now” event. This is basic device security, but it applies to ALL your devices.

Password vault: This is the highest-leverage layer, since it protects everything nested inside it (including information, user IDs, passwords, or a combination of both). A strong, unique master password plus a security key or authenticator app for two-factor is the layer worth spending the most effort on.

Individual accounts: Your user IDs and unique, auto-generated strong passwords per site (so a leaked site doesn’t cascade to other sites because of having the same password), and passkeys when available. (A passkey is a login credential that entirely replaces a password. It’s a cryptographic key pair generated and stored on your device—phone, laptop, or security key—where you unlock it with a fingerprint, face scan, or device PIN instead of typing anything. The private half never leaves your device, and it only works on the legitimate website it was created for, which is why passkeys resist phishing in a way passwords never can. Some sites offer passkeys, and some don’t. Use them if they do.)

And finally, there’s the information/inventory letter itself, which a lot of people want to give their spouse and their heirs, an instruction letter that, by design, provides a shortcut through all four layers at once. That’s exactly why it’s risky as a single, consolidated document—it collapses layered defense mechanisms into a single flat sheet of paper. Yikes!

The solution is to split it by putting the access ”map” in the letter, your site credentials in the vault, and vault access via the emergency-access-type feature, which includes everything you may have otherwise put in the letter. This split effectively turns the letter into two documents, each serving a different purpose.

The inventory half includes your account names, institutions, locations, and who to call. This is the low-risk half. It can safely live in the outer “people” layer—a fireproof safe or lockbox, an attorney’s file, even OneDrive or iCloud—because on its own it doesn’t unlock anything.

The access path half means that instead of writing “vault master password is _ _ _ _ _ …,” it says something like “use 1Password’s emergency kit,” or “use Bitwarden’s emergency access feature,” or “the vault credentials are with the attorney, to be released on presentation of the death certificate.” Notice the arrow skips straight past “individual accounts” entirely; your kids never touch a single-site password directly. They go through the vault’s own mechanism, which then reveals everything else.

Better than a Post-It-Note in a box

The actual credentials can live elsewhere entirely, and I recommend keeping them in a password vault (like 1Password or Bitwarden), not written into the letter itself or in a Post-it-Note in a lockbox. Definitely not on a piece of paper in a desk drawer. The letter then just says, “Everything is in the password vault; here’s how to get into the vault.” This is the way I have mine set up. That way, the letter itself is far less dangerous if seen by the wrong eyes, because it’s a map, not a set of keys to the kingdom.

That’s the real payoff of the split: even if someone finds the inventory half, they’ve learned what exists, not how to get in. And the access-path half, read alone, is nearly useless without also holding the actual vault credential or being an authorized emergency contact.

Here’s a combined illustration that shows the high-level “solution architecture” (something I used to deal with in IT):

The nested domains stay the same, but the vault layer now carries the zero-knowledge point directly on it: even in the worst case, where someone breaches the vault provider’s servers, what they get is unreadable without your master password. That’s what makes the layer worth trusting with so much responsibility in the first place.

And the letter split now points to the actual mechanism rather than a vague “somehow gets in” — the access-path half isn’t a password on paper anymore, it’s a way to get emergency access, which only works because of the same zero-knowledge design labeled just above it. But this is where things get interesting. You want to use your password manager’s built-in emergency access feature (as I described above), rather than writing the master password anywhere. However, these features are implemented differently depending on the password manager you use.

An emergency access feature is, generally speaking, a built-in security mechanism in which you name a trusted person in advance and grant them a path into your vault that doesn’t depend on you being available, capable, or even alive to personally provide the credentials. It doesn’t require you to have done anything at the moment of the emergency. A family recovery feature that needs the locked-out person to still be present and set a new password isn’t this; it’s self-service recovery, not emergency access.

1Password, which I currently use, is more like ”self-service recovery” than true emergency access. What it offers is Family Organizer, which enables me to add family members (in this case, my wife) to the system and grant her shared access. If I die, she would use her own 1Password access credentials to reach anything shared with her (and any shared “family” vaults), in addition to her own credentials. If we both die, or when she dies after I am gone, the procedure is driven by whether other family members can access the account using our Emergency Kit (and related recovery info), which is 1Password’s emergency access procedure.

The 1Password emergency “kit” is a PDF containing the sign-in address, email, Secret Key, setup code (QR), and a place to record the account password; whoever uses it can sign in to the deceased’s 1Password account at 1Password.com/apps or 1Password.com. With this setup, you only need the deceased person’s Emergency Kit (stored safely for the executor/trusted person), plus whatever the inheritor needs to use it (e.g., the printed account password written in the kit).

You may see the weakness of this. In my case, this ”Emergency Kit” ( a sheet of paper isn’t much of a “kit,” is it?) is stored in a fire safe, although it could be in a safe deposit box (which only a spouse or someone else who is a joint-owner may be able to access before probate) or with a trustee. But my letter, which tells a trusted party where the emergency kit is, is in a folder in a file in my desk, along with copies of our estate planning documents (the originals are in the fire safe), and a digital copy is also stored online. Which, now that I’ve thought about it, is ironic since someone has to get to the password vault to access iCloud Drive, where the documents are stored—still a bit of an Earl-and-his-Post-it-note problem. I’ve just moved the vulnerability up one level instead of eliminating it. If the letter is lost, destroyed, or forgotten, or if nobody thinks to look for it in my desk drawer, the fire safe might as well be buried in the backyard next to Earl’s lockbox.

Still, there is some safety in terms of what’s actually in the letter versus what’s in the safe. The letter only says, ”The emergency kit is in the fire safe in my office.” That sentence, by itself, unlocks nothing. Someone would still need access to the physical safe, the combination (or key), and my 1Password account master password or the security key, which are three separate things, none of which live in the letter itself. Compare that to Earl, whose Post-it note was the password. So the letter is still a critical link in the chain, but it only tells you where to look, not what you’ll find when you get there. It’s the difference between a treasure map and the treasure.

That being said, I don’t love that the whole thing still rests on my wife and the kids actually knowing the letter exists and where it is. Which is really just estate planning 101: at some point, you have to accept that you can’t fully eliminate the need for at least one document, safely stored and known about so that those you want to can easily access it. The goal isn’t zero risk; it’s making sure the thing they need to find first is harmless on its own.

When the time comes

Once the surviving spouse is gone, the executor (or trusted person) must have each spouses’s Emergency Kit so they can recover each 1Password account independently—one kit per account. That means that I have to prepare two kits (or otherwise ensure separate recovery information for each account).

In 1Password, the Emergency Kit enables a family member who has forgotten their password or lost their Secret Key to regain access to their own account. The catch with estate planning is that it requires the locked-out person to still be present and able to set a new password themselves. The organizer completes the process but doesn’t unilaterally gain access to someone else’s vault contents. There’s no waiting period/takeover mechanism that works if the account holder is deceased or unreachable. So, specifically for estate-planning purposes, 1Password alone doesn’t give heirs a way in without you having already shared the Secret Key and password through some other channel (a sealed letter, an attorney, etc.), which is really the gap the instruction letter has to fill for 1Password users like me.

I’ve already talked a lot about 1Password (since it’s what I use), but Bitwarden—and other managers such as NordPass, Proton Pass, and, to a much lesser extent, Apple Passwords—provide a truer ”emergency access” option. Here’s a summary comparison:

• 1Password — As described earlier, it uses a zero-knowledge architecture, meaning that your master password plus a locally stored Secret Key derive the decryption key on your device, so the company never has enough to open your vault, even under a subpoena or a breach. But it has no true emergency access feature. What it offers instead is Family Organizer account recovery: if a family member forgets their password or loses their Secret Key, a Family Organizer can help them reset and regain access to their own account — without ever seeing their vault contents. The catch for inheritance planning: this requires the locked-out person to still be present and able to set a new password themselves. There’s no waiting period, a request-and-approve mechanism that lets someone else in if you’re unreachable or deceased. For 1Password users, that gap is exactly what an instruction letter (or a sealed copy with your attorney) still needs to cover, since there’s no built-in path that opens the vault on its own.

• Bitwarden — As stated previously, it uses a zero-knowledge architecture, so even a full server breach would only yield unreadable, encrypted data. Its Emergency Access feature is vault-specific rather than whole-account: you name a trusted contact, choose View (read-only) or Takeover (they set a brand-new master password and gain full control), and set a wait time of at least 1 day. If you don’t approve or deny the request, access unlocks automatically once the wait time runs out. Of the managers covered here, it seems to be the most complete match for what “true emergency access” should look like: a designated contact, a real waiting period you control, and a mechanism that works whether or not you’re able to act. (I recently received notice that 1Password subscription fees are increasing. Bitwarden is much less expensive, so I may consider a change. It is relatively easy to export passwords from one vault to another using a CSV file.)

• NordPass — States it uses a zero-knowledge architecture where only the user can see the vault contents; it also claims the vault is encrypted locally before upload (so the NordPass team can’t see your passwords/notes without your key). NordPass offers a simpler, more limited version of emergency access: You invite a trusted contact (they need their own NordPass account); once they accept, they can later request access to your vault. You’re notified and can grant it immediately or decline; if you don’t respond, access is automatically granted after a fixed 7-day wait (no customization, unlike Bitwarden or Proton). The access itself is view-only: your contact can see your passwords and secure notes, but can’t edit, delete, or export anything; there’s no Takeover option like Bitwarden’s.

• Proton Pass — Uses the term zero-access encryption (a “zero-access”/zero-access-at-rest model) for its encrypted cloud data: it says only you can decrypt using your private key, and Proton can’t access the plaintext it stores. It folds emergency access into your entire Proton account rather than the vault alone; you can name up to 5 trusted contacts, set a wait time of 1 to 30 days, and they’ll be granted access automatically if you don’t respond to their request.

• Apple Passwords — Does not use zero-knowledge architecture and no vault-level emergency access, but Apple’s account-wide Legacy Contact feature lets a designated person request access to your Apple ID data (which includes Passwords) after your death, using an access code plus a death certificate.

• Microsoft Edge — Microsoft also has a built-in password manager that offers secure password storage, autofill, and cross-device syncing. However, it is widely recognized to have fewer features than Apple’s dedicated Passwords app. Microsoft’s emergency access approach is to set up separate emergency (break-glass) accounts and use passwordless methods such as passkeys (FIDO2) or certificate-based authentication, then keep the credentials registered and exempt from Conditional Access blocking. This applies across all Microsoft applications, including Edge.

Some additional thoughts

If you still want a physical/digital backup of the master password itself, split it rather than store it in its entirety. Write half the master password (or a strong hint) in the letter, and give the other half to a sibling, attorney, or trusted friend. Or store one half in a safe or safe deposit box (keep in mind its limitations), and the other digitally. Neither piece alone unlocks anything.

Also, if you store the letter online, encrypt it, and don’t store the encryption password in the same place as the letter. That encryption is only as strong as its password, so the fix isn’t “no encryption,” it’s “don’t co-locate the encryption password with the file.” Keep the file on a reliable network drive, encrypted if you like, and give your kids the decryption password verbally or through a separate channel (a card in a safe or, if appropriate, a safe deposit box, or to your attorney, to be released only upon your passing).

Consider your attorney as the actual custodian. Many estate attorneys will hold a sealed letter of instructions with the rest of your estate documents, to be opened only at the appropriate time. This solves the “sitting in OneDrive forever” problem. It exists, but it’s not exposed day-to-day.

The honest bottom line: you can’t get this to zero risk; leaving the information to someone requires that someone eventually holds the keys. But you can make sure no single document, and no single moment of carelessness, hands over everything at once. That’s really the same principle as not sharing your master password with your kids while you’re alive: graduated, layered access, not one skeleton key.

Putting it all together

If you take nothing else from this piece, take this: security isn’t about finding a single perfect document or an unbreakable password. It’s about making sure no single point of failure—a lost letter, a stolen laptop, a phished login—can undo everything at once. Household security is only as strong as its weakest link, and everyone in the house needs to follow the same practices, not just whoever happens to be the most tech-savvy.

Practically, that means layering a few habits on top of the instruction-letter split we’ve walked through. Use passkeys wherever a site offers them, since they can’t be phished the way a password can. Let your password manager do its quiet, unglamorous job of refusing to autofill on a lookalike site; that’s not just convenience, it’s an active defense against the scam emails and texts that account for most real-world losses. And if you’re willing to take it a step further, a physical security key raises the bar again: even someone who has your master password still can’t get in without the device itself, which is exactly why it’s worth owning more than one, kept in different places, the same way you’d want more than one copy of anything else you can’t afford to lose.

None of this eliminates risk entirely; nothing does. But it does something better than a false sense of total security: it spreads the risk out, so that no single mistake, theft, or forgotten combination becomes the whole ballgame. Given that cybercrime losses for people over 60 topped $7.7 billion last year, up roughly 60% from the year before, the case for spending an afternoon on this is no longer in question. The only question is whether you do it now, on your own terms, or later, in a hurry, after something’s already gone wrong.

But his online account user IDs and passwords are on a Post-it note that’s stuck to the inside of the top of a small combination lockbox hidden somewhere in a cabinet in the house. He told Dot he did that. He did not tell her which cabinet. He also didn’t tell her the combination to the little “password lockbox.” He didn’t write the combination down anywhere, either. Or perhaps it’s on the Post-it-Note. Let’s hope he remembers it. The prudent man has given thought to his steps—the combination is not among his thoughts at present.

This is, it turns out, the state of estate planning in a surprisingly large percentage of otherwise well-intentioned, well-organized, and well-managed households. The important documents exist: the will, the trust, the powers of attorney, and the healthcare directive. They are in a folder, a safe, a filing cabinet, or—heaven forbid—possibly a box in the garage. The attorney was helpful, so the paperwork is technically complete. But somewhere between the attorney’s office and the actual execution of the plan, a Post-it note and a combination lockbox entered the picture, “hidden” in a cabinet that has not been identified to anyone else who might actually (and urgently) need to find it someday.

Love them or hate them, passwords were a genuinely useful invention. They protect your digital assets, accounts, financial life, and identity. But here’s what a password also does, which the inventors perhaps didn’t fully consider: it keeps out everyone who doesn’t know it; which, as it turns out, includes nearly everyone who would need to find the paper you wrote it on, open the cabinet it’s hidden in, figure out the combination to the box the paper is sealed inside, and finally access the very accounts the whole arrangement was meant to protect. A password is, in this sense, solving and creating the same problem simultaneously. Earl finds this puzzling. Dot finds it just another day in Earl-retirement-land.

The deeper issue—and as regular readers of The Lighter Side have come to expect, there’s always a deeper issue underneath the funny things—is that estate planning has two entirely separate problems that most people solve at entirely different times and in entirely different ways. The first problem is the legal one: the documents, the designations, the trustees, the executors, the distribution instructions. Most reasonably diligent people eventually address this one, usually after a health scare or a particularly sobering conversation with a friend whose family went through probate without a will and is still not speaking to each other. The second problem is the practical one: making sure the people who need to find things can actually find them, understand them, and access them without a full-scale archaeological expedition through the kitchen cabinets or the entire house. Or was it the den cabinets? The kitchen cabinets? Or the garage? Or, heaven forbid, buried in the backyard since the box was advertised as “waterproof.”

And if the box is actually found, can it be opened without a hammer or a stick of dynamite? Most people never fully solve the second problem.

What actually needs to exist—alongside the will, the trust, and the powers of attorney—is something called a letter of information and instructions <= Click the link for a sample template. It’s not a legal document, just a plain-language letter that tells your family where everything is, how everything works, who to call, what accounts exist, where the passwords are, and—critically—which cabinet. It doesn’t require an attorney. It doesn’t need to be notarized. It doesn’t need seventeen tabs. It just needs to be written, updated occasionally, and located somewhere more findable than inside a combination lockbox inside an unspecified cabinet somewhere in a house with a lot of cabinets. A fireproof box with a label on it is a reasonable start. Telling at least one other person where the box is specifically would be considerably better. Writing the combination somewhere other than on a Post-it note inside the box would be ideal.

For passwords in particular, setting up a digital password vault (products like 1Password or Bitwarden are good candidates) is an excellent modern digital solution that eliminates the Post-it note, the box, and the cabinet entirely and makes everything accessible to the right people at the right time. One important note: do not write the master password for your password vault on a Post-it note and hide it somewhere in the house. Earl has been meaning to set this up since last spring. The spring before that, actually. His progress is slow on certain things.

Earl actually knows all of this. The Post-it note was always a temporary measure—a placeholder, a transitional solution, a bridge to the more permanent (and complex) system of password vaults, passcodes, and authentication apps he fully intends to implement. Yet the box is still in the cabinet; the cabinet remains unidentified; the combination to the box has been forgotten; and the note inside the box includes passwords that have been changed but not updated.

Tippy knows which cabinet. He has always known which cabinet because he pays close attention to all of the cabinets in the house, several of which contain things he cares about deeply. He also knows that Earl probably won’t remember the combination, that it’s at least possible that he wrote it down on the Post-it-Note that’s locked in the box, that Dot doesn’t know which cabinet it’s in, and that the kids may eventually need to find it. He hopes Earl realizes he’s forgotten the combination if he remembers to get the box to change the password on the post-it note after he changed it online. But that could start this whole thing all over again.

He is not telling because nobody has asked him directly, and also because he’s a dog, and this is not how any of this works. The kids will figure it out. Probably. Maybe. Hopefully. Or maybe, just maybe, Earl will remember.

He’s not exactly a financial whiz, though. He’s got an MDiv, not an MBA. But he is a good steward—he drives a sensible used car, lives modestly, and manages his own retirement savings with the same practical simplicity he brings to most things. He’s got enough diversification to sleep at night, he gives generously as he encourages others to, and he maintains enough humility to know what he doesn’t know. He’s never run a Monte Carlo simulation (he thinks it’s a casino game). He thinks a “hedge fund” is the money you set aside to upgrade your landscaping. Yet somehow, in years of conversations with Earl, he’s never failed to have an answer. It’s usually humbly delivered, short and sweet, full of wisdom, and often includes a verse or two from the Bible.

Pastor Dave strongly believes what the apostle Peter said when he wrote that God, by His divine power, “has given us all things that pertain to life and godliness” (2 Pet. 1:3). (I don’t think he’d be a very good preacher if he didn’t.) Dave knows that Peter isn’t talking about some things or most things, but ALL things. And they’re all recorded in the written Word that Peter himself said is more reliable than his own eyewitness experience of the transfiguration (2 Pet. 1:16-18).¹ (Peter had a front-row seat to the transfiguration and still said the written Word is more reliable than his own recounting of it. Most of us are working with considerably less firsthand experience and considerably more confidence in our own conclusions about certain things.) Also, Dave knows what Paul said: that “All Scripture is God-breathed and profitable” (2 Tim. 3:16). It’s sufficient for doctrine, correction, training, and equipping believers for every good work, including, as it turns out, things like retirement, even though the word “retire” can be found only one time in the Bible in Numbers 8:23-26.

The Levites certainly earned their retirement. Carrying the ark of the covenant across a desert for twenty-five years makes Earl’s IT career carrying a laptop in a briefcase look like a sabbatical. Plus, another lesser-known duty of the Levites included up-close inspections of skin diseases (Lev. 13). So how exactly was a fifty-something priest, with zero access to reading glasses, supposed to squint his way through that job? Imagine the misdiagnoses that could occur, such as occasionally declaring sunburned skin unclean and a leper merely “a bit flushed.” (I sometimes have trouble reading the words to the worship songs displayed on the overhead screens at my church, and I have modern progressive lenses.)

And there’s something that I think biblical scholars may have largely overlooked: the pillar of fire leading Israel through the wilderness may have inspired history’s first F.I.R.E. movement: The Levitical Priesthood Financial Independence, Retire Early plan—L.P.F.I.R.E.P. (Apparently, it wasn’t a “thing” in Moses’ time; he was eighty when he was just really getting started.) I wonder if they had their own exclusive retirement community for retired priests? They could have called it “Levitical Retirement Village.”

Pastor Dave can answer Earl’s most complex non-financial questions (and some financial ones) with four words and a verse. (He could preach a full sermon on some of them) In this case, Pastor Dave said four things: plan wisely, trust God, be generous, and don’t worry about tomorrow. Earl may have been hoping for more specifics, but Pastor Dave gave him a verse written two thousand years ago. So, instead of a textbook explanation, Earl got an ancient but overarching answer to his question about the biblical view of retirement.

Dot, who’s seen this exchange in various forms for over a decade, wants to put Pastor Dave’s words and the verse on the fridge. Tippy, who was there with Earl and Dot in the churchyard for some unknown reason (I can make him appear wherever I want), recalled that the refrigerator door is his most-loved and often-viewed surface in the house, and agreed that this would be a great addition.

Retirement is a complex topic with many facets, but Pastor Dave isn’t oversimplifying the issue. Nor am I suggesting that all the questions about retirement can be answered with one verse. But what that verse gives us is a core principle to guide how we view every season of life, including retirement. I would summarize it this way:

When you make the Kingdom of God and His righteousness the most important thing in your life and your retirement—the first priority, the center around which everything else arranges itself—the practical concerns of daily life, including financial ones, find their proper place. They don’t disappear; God, who is always immanent, loving, and caring, upholds and sustains all things, including your financial and practial needs as you faithfully serve Him. So, focus on God’s kingdom first. Be wise in managing whatever God has entrusted to you. Give generously from whatever God has given you. And trust that your Heavenly Father loves you and wants to care for you your whole life, until he welcomes you into his kingdom that will last forever.

Perhaps you have a pastor like Pastor Dave. He’s there almost every Sunday, with his kind and patient smile, short answers, and powerful verses in response to difficult questions. The book he always references is the Truth, “breathed out by God” (2 Tim. 3:16), and it is timeless. Earl’s questions, beneath the surface of financial talk, are the same as for many of us: “Can we trust God with the future?” The answer is always yes, and it has always been so for those who “love God…and who are called according to His purpose” (Rom. 6:28). That’s what the fourteen-word phrase that Dot plans to put on the refrigerator is all about.

[1] This is one of the most stunning statements about biblical authority in the entire New Testament, made all the more powerful because the person making it has the most impressive personal credentials imaginable. Peter is present in all three accounts, along with James and John, which is why his testimony in 2 Peter carries such weight. He’s not reporting secondhand; he was on the mountain. The Transfiguration itself is recorded narratively in Matt. 17:1-8, Mark 9:2, and Luke 9:28-36.

In the previous series of articles, we explored the Self-Sustaining Principle, which is the biblical call to plan wisely so we don’t become an unnecessary burden on others. We discussed saving adequately, generating sustainable retirement income, managing expenses, and building wealth responsibly. These are essential components of faithful retirement stewardship.

But the Self-Sustaining Principle doesn’t tell the whole story.

What happens when financial self-sustainability (I use those terms deliberately but with a view toward something deeper, which is our total dependency on God) isn’t enough—when age, illness, or disability strips away our independence? When a spouse develops dementia? When a parent can no longer live alone? When the careful plans we’ve made meet the harsh realities of human weakness and frailty in a fallen world?

This is where the Caregiving Principle enters—the second pillar of the Biblically-Informed Framework for Retirement Stewardship (BIFRS). We first introduced this principle in the BIFRS introduction article.

The reality we can’t avoid

We will all need healthcare in some form before and in retirement. Most of us will need some form of care in our later years, no matter how well we’ve planned financially.

According to the U.S. Department of Health and Human Services, about 70% of people turning 65 will need some form of long-term care during their remaining years. Women will need care for an average of 3.7 years; men for 2.2 years. About 20% will need care for longer than five years.

These aren’t just statistics about nursing home stays. They include the everyday realities of aging: help with bathing, dressing, preparing meals, managing medications, getting to medical appointments, and handling finances when our minds aren’t as sharp. They include the slow decline that most of us will face if we live long enough.

The question isn’t whether we’ll need care. The question is who will provide it, how we’ll receive it, and whether we’ve prepared our families—and ourselves—for that reality.

The biblical foundation

At its core, caregiving is based on love.

When Jesus was asked which commandment was greatest, he answered without hesitation:

“Love the Lord your God with all your heart and with all your soul and with all your mind… And love your neighbor as yourself.” (Matthew 22:37-39, ESV)

This command to love—expressed as practical, sacrificial care for elderly family members—runs from one end of the New Testament to the other. Lovingly caring for family members and others is an expression of what it means to follow Christ.

But the New Testament vision goes even further than family obligation. John writes simply:

“We love because he first loved us.” (1 John 4:19, ESV)

This means that every act of genuine caregiving flows from the same source: the prior, initiating love of God poured into our hearts through Christ. We don’t care for others to earn something or to fulfill a duty. We care because we have been cared for—extravagantly, at great cost—and that changes everything about how we view the aging, the vulnerable, and the dependent people in our lives.

The Caregiving Principle also draws from explicit biblical teaching about family responsibility, particularly in Paul’s first letter to Timothy:

“But if anyone does not provide for his relatives, and especially for members of his household, he has denied the faith and is worse than an unbeliever.” (1 Timothy 5:8, ESV)

That’s strong language. Paul doesn’t say neglecting family is a minor oversight or a regrettable lapse in judgment. He says it’s a denial of the faith worse than the behavior of unbelievers.

A few verses later, he reinforces this principle:

“If any believing woman has relatives who are widows, let her care for them. Let the church not be burdened, so that it may care for those who are truly widows.” (1 Timothy 5:16, ESV)

The biblical order of responsibility

Notice the order of responsibility that Paul establishes:

First, family members care for one another. This is the primary obligation. Children care for aging parents. Spouses care for each other. Siblings help siblings when needed. This isn’t optional; it’s fundamental to living out our faith.

Second, the local church supports those with no family. When there’s genuinely no family to provide care—when someone is “truly a widow” with no relatives to help—then the church steps in. The church community becomes the family.

Third, the broader society provides a safety net. Programs like Medicare, Medicaid, and Social Security exist partly because of deeply rooted Christian influence in our culture. As John Piper notes in his framework, “I suspect that the existence of legally mandatory Social Security in the wider society is owing to deeply rooted Christian influence that says we won’t throw away our old people but find a way to care for them.”

This biblical order—family, church, society—shapes how we think about caregiving in retirement and into later life.

The tension we must deal with

Here’s where things get complicated. We’ve just spent a series of articles on the Self-Sustaining Principle, emphasizing the importance of not burdening others. Now we’re talking about the Caregiving Principle, which acknowledges that we will need help and that family and healthcare providers should provide it.

Isn’t this a contradiction?

Not at all. It’s a both/and, not an either/or.

The Self-Sustaining Principle focuses primarily on financial provision. It says: plan wisely so that, if at all possible, you can pay your own bills, cover your own expenses, and maintain your own household without requiring financial support from family, church, or society.

The Caregiving Principle focuses on personal care. It acknowledges that there’s a difference between needing someone to pay your bills and needing someone to help you bathe. Between hiring help with your savings and imposing unpaid caregiving duties on family. Between maintaining financial independence and maintaining physical independence.

Financial self-sustainability creates the context in which care can be both given and received as an expression of mutual love rather than imposed as a crisis born of poor planning.

Let me illustrate with two scenarios:

Scenario A: An 82-year-old father has saved adequately for retirement. He receives Social Security, has a comfortable nest egg, and has planned for healthcare costs. When he develops mobility issues and can no longer safely live alone, his daughter helps him transition to assisted living. His savings pay for the facility. His daughter visits regularly, manages his medical appointments, and advocates for his care. This is the Caregiving Principle in action, enabled by the Self-Sustaining Principle.

Scenario B: An 82-year-old father never saved for retirement, spent freely during his working years, and has only Social Security. When he develops the same mobility issues, he can’t afford assisted living. His daughter must either take him into her home (disrupting her own family) or cobble together inadequate in-home care she can barely afford while also supporting her own family. Both father and daughter feel the strain—he feels like a burden; she can be tempted to feel resentful and exhausted.

In both scenarios, caregiving happens. But in the first, financial preparation transforms caregiving into an expression of love and honor. In the second, lack of financial preparation turns caregiving into a crisis that may strain both relationships and resources.

The Self-Sustaining Principle and Caregiving Principle work together. Financial sustainability doesn’t eliminate the need for care, but it changes the nature of that care from desperate obligation to loving service.

Care goes in two directions

The Caregiving Principle operates in two directions, and we need to prepare for both:

1. Preparing to give care

If you’re in your 40s, 50s, or 60s, you may already be facing this reality. Perhaps your parents are aging, your in-laws need more help, or a sibling has health challenges. You’re in what demographers call the “sandwich generation”; i.e., caught between caring for children while also caring for aging parents.

The statistics are sobering. According to AARP, more than 53 million Americans provide unpaid care to an adult with health or functional needs. Family caregivers provide an estimated 80% of long-term care in the United States. The economic value of this unpaid care is estimated at $470 billion annually.

If you’re not in this season yet, you likely will be. Very few of us will navigate our middle years and early retirement without facing caregiving responsibilities for aging parents or a spouse.

Preparing to give care means having honest conversations with aging parents about their wishes, plans, and resources. It means coordinating with siblings about shared responsibilities. It means understanding Medicare, long-term care options, and local resources. It means recognizing the physical, emotional, and spiritual toll of caregiving and knowing when to ask for help from the church, community, or professional services. It means setting appropriate boundaries to protect your own health and family. And fundamentally, it means viewing caregiving as ministry and worship, not mere duty.

We’ll explore all these topics in detail in upcoming articles. But the first step is acknowledging that caregiving for aging parents or a spouse isn’t an unlikely scenario you might face—it’s a probable reality you should prepare for.

2. Preparing to receive care

This is often harder to think about than giving care. We don’t want to imagine ourselves as dependent, weak, or burdensome. American culture prizes independence and self-sufficiency. The idea of needing help with basic daily activities feels like a weakness or even a failure.

But here’s a biblical truth we need to embrace: There is dignity in dependence when that dependence is rooted in our created nature as relational beings made in God’s image.

From birth to death, we are designed for interdependence. Babies can’t survive without care. Toddlers need help learning to walk, eat, and dress. Children need guidance and protection. Even in our strongest years, we depend on others—for food grown by farmers, for medical care from doctors, for friendship, fellowship, and community from the church.

Why do we assume that needing help in old age is somehow different? Why do we view it as a loss of dignity rather than as the natural rhythm of human life?

The Bible never equates physical strength with spiritual value. In fact, Paul writes:

“Therefore I will boast all the more gladly of my weaknesses, so that the power of Christ may rest upon me.” (2 Corinthians 12:9, ESV)

Our weakness can display God’s strength. Our dependence can deepen our faith and provide opportunities for others to serve.

Preparing to receive care means rejecting the cultural lie that needing help equals loss of dignity. It means planning ahead so our care needs don’t create a financial crisis for the family. It means communicating clearly about our preferences and values. It means creating legal documents—powers of attorney, advance directives—while we’re still competent. It means choosing people we trust to make decisions if we can’t. It means developing the spiritual maturity to receive care with gratitude rather than shame. And it means understanding that accepting help graciously is itself a gift to the caregiver.

The most loving thing you can do for your future caregivers is to prepare well. That preparation includes financial planning (the Self-Sustaining Principle), honest conversations, legal documents, and the spiritual work of learning to receive care with grace.

What the Caregiving Principle Is NOT

Before we go further, let me clarify some misconceptions.

The Caregiving Principle does NOT mean:

• Adult children must always provide hands-on physical care for aging parents

• You should never use professional caregivers or facilities

• Financial assistance to parents should have no limits

• You must sacrifice your own family’s well-being to care for aging parents

• Receiving care means you’ve failed at self-sufficiency

• You can’t use Medicare, Medicaid, or other government programs

• The church should solve all caregiving needs

• Caregiving is exclusively a family burden with no community support

The Caregiving Principle DOES mean:

• We honor biblical priorities: family first, then church, then society

• We plan ahead so care can be given as love rather than crisis management

• We prepare financially so our care needs don’t devastate our family

• We have honest conversations about aging, preferences, and resources

• We recognize that giving and receiving care are both acts of worship

• We ask for help when we need it—from family, church, and community

• We view aging and dependence as normal parts of the human experience, not failures

• We steward our bodies, resources, and relationships to prepare for this season

The four major areas for planning

Over the next several anchor articles in this Caregiving Principle series, we’ll dive deep into four major caregiving and care-receiving areas. Let me preview what’s coming:

1. Healthcare planning before Medicare—the “gap”

If you retire at age 65 or later, you transition directly from employer-based health insurance (or COBRA continuation coverage) to Medicare. The transition is relatively straightforward—you enroll in Medicare Parts A and B around your 65th birthday, add Part D prescription coverage, choose either a Medigap supplement or Medicare Advantage plan, and you’re covered.

But what if you retire at 62? Or 60? Or 55? What do you do for health insurance during those years before Medicare eligibility? This is one of the most significant—and most underestimated—challenges facing early retirees.

The costs can be staggering. A couple retiring at age 62 and purchasing individual health insurance through the Affordable Care Act (ACA) marketplace could easily pay $1,500-$2,500 per month in premiums—$18,000-$30,000 annually—even with relatively high deductibles and copays. Over three years before Medicare eligibility, that’s $54,000-$90,000 just for premium costs, not including actual healthcare expenses. For a couple retiring at 60, add another 2 years and $36,000-$60,000 to those totals.

These numbers can make or break early retirement plans. I’ve seen people delay retirement specifically because they couldn’t afford the healthcare coverage gap. I’ve seen others retire early and then return to work part-time—not primarily for income, but for employer-sponsored health insurance. The healthcare coverage gap between early retirement and Medicare eligibility at 65 is one of the most important planning considerations if you’re considering retirement before 65, yet many people don’t fully understand their options or realistically budget for the costs until they’re already committed to retiring.

2. Healthcare planning: Medicare and beyond

In article #2 in the Caregiving Principle series, we’ll walk through the main options for healthcare coverage before Medicare, the costs you can expect, and how to plan for this challenging transition period.

Healthcare is the foundation of caregiving. Medicare becomes the primary health insurance for most Americans at age 65, but understanding it requires navigating a bewildering alphabet soup of parts, plans, and premiums.

Medicare has four parts:

• Part A covers hospital stays, skilled nursing facility care, hospice, and some home health care

• Part B covers doctor visits, outpatient care, medical equipment, and preventive services

• Part C (Medicare Advantage) is an alternative to Original Medicare, offered by private insurers

• Part D covers prescription drugs

But that’s just the beginning. You also need to decide between Original Medicare (Parts A and B) plus a Medigap supplement, or Medicare Advantage (Part C). You need to understand IRMAA surcharges that can add thousands to your annual costs. You need to budget for dental, vision, and hearing care, which Medicare doesn’t cover. You need to plan for the years between retirement and Medicare eligibility if you retire before age 65.

According to Fidelity’s 2025 Retiree Health Care Cost Estimate, a couple retiring at age 65 can expect to spend approximately $315,000 on healthcare costs throughout retirement. That’s an average; your actual costs could be significantly higher or lower depending on your health, your coverage choices, and how long you live.

Healthcare planning for aging parents is equally important. Do your parents have adequate Medicare coverage? Do they understand their options? Are they paying too much for supplemental coverage they don’t need, or do they have dangerous coverage gaps? Can they afford their medications? Do they need help navigating the healthcare system, coordinating multiple specialists, or understanding complex medical decisions?

In the upcoming healthcare planning article, we’ll walk through all of this in detail. We’ll explain how each Medicare part works, how to choose between Original Medicare and Medicare Advantage, how to budget for healthcare costs, and how to help aging parents navigate their healthcare coverage. We’ll provide decision frameworks, cost comparisons, and practical action steps for different life stages.

Healthcare planning isn’t optional; it’s foundational to the Caregiving Principle. You can’t give or receive care effectively without understanding how healthcare coverage works and what it costs.

3. Long-Term Care planning: Beyond Medicare

Here’s what catches most people by surprise: Medicare doesn’t pay for long-term care.

Medicare covers medical care, such as doctor visits, hospital stays, and rehabilitation after surgery. But it doesn’t cover the ongoing personal care that most of us will eventually need: help with bathing, dressing, eating, toileting, transferring from bed to chair, and managing continence. These are called Activities of Daily Living (ADLs), and when you can’t perform two or more of them independently, you need long-term care.

Long-term care comes in several forms, each with dramatically different costs:

• In-home care: Aides come to your home to help with ADLs and household tasks

• Adult day care: Daytime programs providing supervision, activities, and meals

• Assisted living: Residential facilities providing housing, meals, and assistance with ADLs

• Memory care: Specialized facilities for those with dementia and Alzheimer’s

• Skilled nursing facilities: 24-hour medical care for those who need constant supervision

• Continuing Care Retirement Communities (CCRCs): Campuses offering independent living, assisted living, and skilled nursing all in one location

The costs are staggering. In 2026, the median annual cost for a private room in a skilled nursing facility is approximately $120,000 to $140,000. Assisted living averages $60,000 annually. Even in-home care can exceed $75,000 per year if you need full-time help.

And remember: 70% of people turning 65 will need some form of this care. The average duration is 3.7 years for women, 2.2 years for men who do. About 20% of them will need care for longer than five years. Do the math: a typical long-term care episode could easily cost $150,000-$300,000. A longer episode, especially one involving memory care or skilled nursing, could exceed $500,000.

How do people pay for this? There are essentially five options:

1. Personal savings and income from Social Security, pensions, and investments

2. Long-term care insurance (traditional policies)

3. Hybrid life insurance/long-term care policies that combine death benefits with care coverage

4. Medicaid for those who qualify (which requires spending down most assets)

5. Family caregiving (unpaid, which shifts the financial burden from money to time)

Each option has advantages and disadvantages. Long-term care insurance can be expensive and has become harder to find. Self-insuring requires substantial assets. Medicaid planning raises ethical questions about intentionally impoverishing yourself to qualify for government benefits. Family caregiving can be rewarding, but it is also exhausting and can derail careers.

Long-term care is perhaps the most financially dangerous risk in retirement. It’s also one of the most emotionally and spiritually challenging aspects of aging. Planning for it is essential to faithful stewardship.

4. Family communication and caregiving responsibilities

This may be the most challenging area. How do you have “the conversation” with aging parents about their plans, their resources, and their wishes? How do siblings share caregiving responsibilities fairly? What do you do when one sibling provides hands-on care while another provides financial support? How do you care for parents without enabling poor decisions? How do you balance caring for aging parents with raising your own children and maintaining your marriage?

These questions don’t have simple answers, but we’ll explore biblical principles and practical wisdom to navigate these complex family dynamics in a future article.

5. Legal and estate planning for caregiving

Advance planning dramatically reduces family stress and conflict. We’ll discuss the essential legal documents everyone needs: wills, powers of attorney (financial and healthcare), advance directives, and living wills. We’ll help you understand when you need an attorney versus when online documents are sufficient.

We’ll also discuss how to approach aging parents about whether they have these documents, where they’re located, and who they’ve designated to make decisions for them. And we’ll explore the Christian perspective on topics like Medicaid planning and spend-down strategies.

Preparing for your coming weakness

Preparing to receive care also means taking practical steps now to make it easier for your family to help you later. Cognitive and physical decline will affect every retiree who lives long enough. The question isn’t whether weakness will come, but whether we’ll prepare for it while we’re still capable.

Your Coming Weakness and Retirement Stewardship (Updated 2026) addresses this reality. In that article, I present eight specific action steps you can take to protect yourself and your family before decline makes managing your affairs difficult:

1. Simplify your finances by consolidating accounts at one or two institutions

2. Write everything down in comprehensive checklists and password managers

3. Put finances on autopilot through the automation of bills, deposits, and routine transactions

4. Delay Social Security to maximize guaranteed income during a potential cognitive decline

5. Build a support network through church and community relationships

6. Establish powers of attorney and trusted contacts at financial institutions

7. Engage professional help, like elder law attorneys and daily money managers, when needed

8. Consider trusts only when they truly make sense for your situation

The 2026 update to that article includes my perspective seven years later (at age 78 versus 71), updated Alzheimer’s statistics (7 million Americans 65+ in 2026, projected to reach 12.7 million by 2050), FBI fraud statistics ($3+ billion annually targeting seniors), and an “Act Now Before It’s Too Late” section with age-based timelines.

The central message: These preparations must happen in your 50s, 60s, and early 70s—not in your 80s when decline may have already begun.

Where we go from here

The Caregiving Principle might feel overwhelming. Healthcare planning. Long-term care costs. Difficult family conversations. Legal documents. It’s a lot to think about, plan for, and prepare.

But remember: this is also about stewardship, and stewardship isn’t just about money; it’s about wisely managing everything God has entrusted to us, including our bodies, our relationships, and our later years.

As we work through this series, we’ll break down each major area into practical, actionable steps. We’ll provide decision frameworks, checklists, and resources. We’ll help you have the conversations you’ve been avoiding. We’ll show you how to prepare financially, legally, and spiritually.

Most importantly, we’ll ground everything in biblical truth: You are made in God’s image. Your dignity doesn’t depend on your independence. Your weakness can display God’s strength. Receiving care graciously is an act of faith. Giving care sacrificially is an act of worship.

Whether you’re in your 40s, anticipating caring for aging parents, in your 50s or 60s, planning for your own future care needs, or already navigating the complexities of caregiving, the Caregiving Principle provides a framework for approaching this season with wisdom, grace, and faith.

The Self-Sustaining Principle asks: “How can I provide for myself so I don’t burden others?”

The Caregiving Principle asks: “How can I prepare to both give and receive care in ways that honor God, honor family, and reflect biblical priorities?”

Both questions matter. Both require planning. Both reflect faithful stewardship.

In the next article, we’ll begin with healthcare planning—understanding Medicare in detail, realistically estimating costs, and making wise decisions about coverage. It’s the foundation of caregiving preparation, and it affects nearly everyone who reaches age 65.

Until then, I encourage you to start having conversations. If you have aging parents, ask them about their Medicare coverage, their long-term care plans, and their legal documents. If you’re approaching retirement yourself, start thinking about who you’d want making decisions if you couldn’t. If you’re married, discuss these questions together.

The Caregiving Principle isn’t about creating fear or anxiety. It’s about faithful preparation. It’s about loving your family well by planning ahead. It’s about stewarding the gift of life—all of it, including the seasons of weakness and dependence.

And ultimately, it’s about reflecting the character of God, who cared for us when we were utterly helpless and continues to sustain us through every season of life.

I recently published a book on this subject, and the broader topic of later life concerns, which includes the biblical and theological foundations of “Legacy,” as well as many of the practical areas that will be covered in the next series of anchor articles:

But if you do ask a retiree whether they’re staying busy, you could get a variety of answers. The question seems to imply, at its core, that retirees are generally not busy. That their days are a blur of napping, going to the movies, early-bird dinner specials, and watching the Weather Channel. That may describe occasional days for some of us (I like watching the Weather Channel, but usually when something is “brewing”—it comes from growing up in Central Florida), but not every day for sure.

“Busy” also means different things to different people. For some, the question “Are you staying busy?” is really a polite way of asking, “What the heck do you do all day?” to which some might respond with a hint of indignation, “Whatever I want!” Others may stare blankly until they muster, “Lots of things — I just try to stay busy.” And then some offer a seven-point answer that begins with a brief historical overview of retirement and somehow ends with the Levitical priesthood, quoting Numbers 8:24-26. You were just trying to get from the lobby into the church service. You may not make it.

Or you might also get a simple, thoughtful, honest answer like Earl’s.

This cartoon introduces Norm, Earl’s neighbor and occasional foil. Norm is not a bad guy, even if he looks a little silly in the bright red athletic suit, which, in my rendering, looks a lot like pajamas. (Do people even wear “sweat suits” anymore? Maybe they’re called “sweat outfits,” but that doesn’t sound right.) He’s just relentlessly, exhaustingly, and enthusiastically retired in the most performative way possible. He is the person retirement magazines are written for and about. He is the “after” photo in a retirement-planning brochure, complete with styled hair, a well-groomed mustache, and fewer facial wrinkles from using Particle Facecream for Men, which he saw advertised on Fox News.

Norm’s retirement embodies the cultural default answer: get busy and stay busy. Being busy is respectable; it signals that you are still active, still achieving, and still relevant. The retirement magazines are full of fit, tanned people with excellent hair (perhaps graying, like Norm’s) and unnaturally white teeth. (Seriously, how do they do that teeth thing? Probably another product seen on Fox News.) These are people who are kayaking, volunteering, traveling, launching second careers, and running half-marathons. The implicit message is that the goal of retirement is to replicate the pace of working life with more fun and interesting activities. Stay busy, and whatever you do, don’t slow down. Don’t sit down. And don’t, under any circumstances, admit that you took a nap.

To be fair, there is something to this “staying active in retirement” thing. Staying active has generally been shown to benefit people physically, mentally, and socially. But what “active” looks like for one person can be very different from what it looks like for another. Comparing your retirement to a magazine cover is about as useful as comparing your portfolio to Warren Buffett’s. Instructive, perhaps, but encouraging?—not particularly. As Buffet once said, “People buy Berkshire [Hathaway] to invest like me. Then they call their broker every week to ask why it isn’t doing anything. That’s not investing like me. That’s the opposite of investing like me.”

Here’s the more important distinction: just being busy is fairly easy (unless you’re just really, really lazy, of course). It requires nothing more than a full calendar and a basic unwillingness to sit still. Being thoughtful and intentional about what you do and why you do it is considerably harder. It requires knowing what actually matters to you, to God, and to others, which in turn requires the kind of unhurried reflection that busyness tends to crowd out. Some people use the newfound flexibility of retirement beautifully. Others fill it immediately with frenetic activity and then, six months later, wonder why they still feel vaguely unsatisfied. Pickleball is fun, but it’s not the total answer.

The biblical perspective adds a dimension that retirement magazines tend to gloss over, possibly because it doesn’t photograph as well as kayaking in Alaska. A genuinely purposeful retirement will include some meaningful service to others: mentoring, volunteering, giving generously, and serving the local church with the time and wisdom that working life never quite allowed. This is the natural outflow of a life shaped by gratitude and grace and, for many people, the answer to the nagging dissatisfaction that a full calendar alone can’t provide.

This is consistent with what a kind subscriber recently wrote about this topic after suggesting it to me for a cartoon after his conversation with a friend—who was not retired—asked him about how he was spending his time in retirement:

Rather than “busy,” my main goal in retirement is to be “fruitful,” I told him. To grow personally while being of use to those around me. This seemed to satisfy him, but it left me with the same feeling it always does: Why do I have to justify my existence in this way? People in demanding active careers have built-in “justification.”

I think part of being the “fruitful” retiree that he aspires to is something else that the Bible teaches we should embrace: the activity of abiding. Jesus was direct about this in John 15. The branch that bears fruit is not the most frantically active one. It’s the branch that stays connected to the vine. Abiding is unhurried time in Scripture, in prayer, and in quiet attentiveness to the Holy Spirit. It isn’t the absence of productivity. It is the source of it. Everything else—including fruitfulness— flows from a better and deeper place when abiding comes first.

And then there is rest—actual, intentional, guilt-free rest. Many retirees are remarkably bad at this, having spent forty years treating rest as something you do only after everything productive is finished rather than as a gift to be received. Rest is biblical. The Sabbath principle didn’t retire when you did.

Retirement looks different for everybody, and it should. Physical health, financial margin, personality, spiritual gifts, and local church needs all shape what a faithful and flourishing retirement looks like for any particular person. There is no template. There is no magazine cover to match. There is just the daily question of whether you are living your days with gratitude, intentionality, and a genuine awareness of the One who has numbered them all.

Norm has his view of retirement. Earl is carefully working his out. Dot makes a reasonable assumption. And Tippy’s mind has wandered. But then he has never once been asked what he does all day, has never felt the need to justify his schedule to anyone, sometimes sleeps twelve hours without interruption, and wonders where in the world the name “pickleball” came from.

Still, FORO is a legitimate concern. Some haven’t saved as much as they wanted. Retirements that once lasted ten or twelve years now routinely stretch to twenty-five or thirty. Inflation quietly erodes purchasing power. Markets don’t always cooperate and can be downright cantankerous at times. And unlike your working years, when a bad month could be offset by next month’s paycheck, a bad sequence of returns in early retirement can do permanent damage to a portfolio. This is why financial planners invented a tool with a name that makes it sound considerably more glamorous than it actually is: the “Monte Carlo Simulation” (apparently, everyone in Monte Carlo wears tuxes and evening gowns, at least in the movies).

The Monte Carlo simulation may sound like it came from a James Bond film, but it’s actually just a very busy calculator running thousands of hypothetical scenarios at once.^[1] This method, named after the famous Monaco gambling destination—which should tell us something—works by running thousands of randomized scenarios on your retirement numbers to see how many come out favorably. It’s what smart financial advisors do when they finally admit that predicting the future is impossible, but that systematically guessing at it is at least better than guessing at it casually. As baseball catcher and philosopher Yogi Berra once said, “It’s hard to make predictions, especially about the future.”

The difference between Monte Carlo and just winging it is roughly the difference between playing darts with a very expensive dartboard and no dartboard at all. The dart throws are still random. The board is just better labeled than the wall around it that you keep hitting. (My brother and I had a dartboard in our bedroom growing up, and the walls were made of plaster. As you might imagine, we made quite a mess—it looked like a wild woodpecker had gotten loose in our room.)

Here’s the basic idea behind running simulations: rather than assuming your portfolio will earn a steady average return every year—which it never does, not even close, not once—a Monte Carlo simulation runs hundreds or thousands of randomized sequences of market returns, inflation rates, and spending patterns. At the end, it tells you something like: Based on these assumptions, your plan succeeds in 87% of scenarios. Which sounds enormously reassuring until you spend a few seconds thinking about the other 13%—as Dot did. Then you’re no longer as reassured.

This is part of financial planning that you can do and that many advisors do for their clients. So, you can run it again with different inputs, and the probability of success may or may not change. Still, the really fun thing is that you can make your inputs more optimistic, which can improve the outputs and may even make you feel better, even if it’s way off. Stock returns that average 12% a year and inflation averaging 1% a year—sure, why not?

Actually, this is the most useful thing Monte Carlo does. It doesn’t promise everything will be fine, but it forces you to consider all the variables involved in the calculations. (By the way, they’re called “variables” for a reason: they can vary because they are unpredictable, so you have to make “informed guesses.”)

In a way, it answers what if? questions. What if you retire the year before a major market downturn? What if inflation runs hotter than expected? What if you live to 95? What if you live to 137? What if bread goes to $47 a loaf, or $47 a slice? What if you retire early, the market crashes and never comes back, you live to be 100, and they don’t make bread anymore (I don’t think there’s a bread-baking variable in the models).

The simulation probably won’t cover all of these, but the good ones will cover most of them, and the exercise of asking the questions is genuinely valuable even when the answers are uncomfortable. The simulation doesn’t predict the future; it maps the territory of possible futures and asks how prepared you are for the range of them. Some think of it as a may make you worry app, which can be bad, but at least it’s organized.

I’m being serious now, really I am. Used well, it’s a genuinely helpful planning tool. Used poorly—or trusted absolutely—it gives false precision to an inherently uncertain exercise. The inputs matter enormously: your assumed rate of return, your spending level, your time horizon. Change any of them, and the results shift dramatically. Garbage in, garbage out, as they say, regardless of how impressive the output looks, and Monte Carlo output always looks impressively precise, which is part of the problem. A number like 94.3% suggests a level of certainty that the actual future may not mirror.

That’s why the wisest response to a Monte Carlo result—whether it says 94% or 74%—is neither panic nor false comfort, but something closer to what the Proverbs writer had in mind: “The heart of man plans his way, but the Lord establishes his steps“ (Prov. 16:9). We plan, model, and stress-test and then stress-out (just kidding—don’t do that). We adjust our spending, diversify our holdings, and build in a margin of safety for the unexpected. And then we hold those plans loosely, trusting our Heavenly Father, whose knowledge of the future is not statistically probabilistic but sovereign and certain; and who, notably, has never once needed to run a simulation. (If God had run a “creation simulator,” He may have changed his mind.)

Earl loves his simulator and runs it every quarter—assuming he can clear all the input errors and cached values that keep mysteriously returning. The answer is almost always the same, but he runs it again anyway—but that’s something for another day (or cartoon). Dot remains skeptical of anything that requires a computer and involves percentage-based prognostication—think weather reports. And Tippy would like to point out that he has never once thought about sequence-of-returns risk, has no idea what a Monte Carlo simulation is, and sleeps twelve hours a day without interruption.

That correlation is hard to ignore.

[1] Suggestion: try https://www.honestmath.com/model for a good, easy-to-use, and reliable simulator. (Be sure to read the documentation to fully understand the model before you use it. Especially why your input—the variables—matter so much.)

In this article, we’ll explore Tier 3 income. This variable, self- or advisor-managed layer sits atop your guaranteed income (Tier 1: Social Security, pensions, annuities) and semi-stable income (Tier 2: bonds, dividends, TIPS). It’s the most flexible part of your retirement income, but also the most complex, challenging, and risky if managed poorly.

After nine years of retirement at age 73, I can tell you from experience: once you work out Social Security, the withdrawal lever matters more than almost anything else. You can have a million-dollar portfolio and still run out of money if you withdraw poorly. Conversely, you can stretch a modest portfolio surprisingly far with wise withdrawal decisions (and if you also manage Tier 1 and Tier 2 income well).

This article provides an overview of the main Tier 3 income sources and how they work together, with links to detailed articles on each topic for those who want to dive deeper.

(Note: If, at this point, you’re thinking, “hey, this all looks a sounds a lot like a ‘bucket strategy’ to me,” you’d be right. It’s based on the bucket strategy I’ve written about on the blog—more on that later.)

Understanding Tier 3: The flexibility layer you (or your advisor) actively manage

Tier 1 income provides your foundation—guaranteed, inflation-protected income you cannot outlive. Tier 2 adds semi-stable cash flow with modest risk. Tier 3 is different. This is income you create through active decisions, and those decisions have cascading consequences throughout your retirement.

The five components of Tier 3 income:

Portfolio withdrawals

There are different types of withdrawals from risk-based investment portfolios. Here, I am excluding dividends and income, which were included in Tier 2 income.

Sustainable Withdrawals (a/k/a the “safe withdrawal rate,” or “SWR”) are the systematic sale of investments (security assets) to generate cash for spending. This is the core challenge of retirement income planning: determining how much you can safely withdraw annually without depleting your portfolio prematurely (the “sustainable” and “safe” aspect), especially when you don’t know how long you’ll live, what market returns you’ll experience, or what unexpected expenses might arise.

Required Minimum Distributions (RMDs) are mandatory withdrawals from traditional IRAs and 401(k)s beginning at age 73 (or 75 for those born in 1960 or later). The IRS calculates your RMD each year based on your account balance and life expectancy. These withdrawals are fully taxable and can push you into higher tax brackets, increase Social Security taxation, and trigger IRMAA surcharges even when you don’t need the money for spending.

Roth IRA distributions provide tax-free, flexible withdrawals with no RMDs during your lifetime. Because Roth withdrawals are not taxable income, they don’t affect Social Security taxation or IRMAA calculations. This makes them extraordinarily valuable for managing your tax situation in later retirement, covering unexpected expenses, and providing tax-free income during years when other sources would push you into higher brackets.

Other variable income sources

Though less common, these can also provide variable income in retirement:

Part-time earnings from consulting, freelancing, seasonal work, or small-business ventures constitute fully taxable income that can substantially reduce portfolio withdrawal pressure. Even modest earnings of $10,000-15,000 annually can extend portfolio longevity by years while providing purpose, social connection, and mental stimulation.

Strategic asset sales involve liquidating specific assets beyond routine portfolio withdrawals, such as downsizing your home, selling investment property, liquidating a business, or selling collectibles. These one-time infusions can address everyday or major expenses, rebalance your portfolio, or simplify your financial life.

The unifying characteristic of all Tier 3 sources is that they are under your control. I’m not saying you control the real estate or stock markets. What I mean is that, unlike Social Security or bond interest, Tier 3 income depends directly on your decisions—what kind of assets you liquidate, how many, and when. That control creates enormous opportunity but also enormous responsibility.

The big challenge: sequence-of-returns risk

Before exploring specific withdrawal strategies, you need to understand the single most significant risk facing retirees who depend on portfolio withdrawals: sequence-of-returns risk.

I introduced this earlier, so here’s the simple version: the order of investment returns matters far more in retirement than during your accumulation years. During your working years, market volatility doesn’t hurt you much. If stocks drop 30% when you’re 45, you keep contributing to your 401(k), buying shares at lower prices, and benefiting when markets recover. Bear markets during accumulation can actually help because you’re buying more shares at depressed prices.

But in retirement, the math reverses. Now you’re withdrawing from your portfolio, which means you’re selling shares. If the market drops 30% in your first or second year of retirement while you’re taking withdrawals, you’re forced to sell far more shares to generate the same dollar amount. Those shares are gone forever—they can’t participate in the eventual recovery. This permanently reduces your portfolio’s future earning potential.

The good news? You can mitigate sequence risk through prudent withdrawal strategies, adequate cash reserves, and spending flexibility. I’ve written a comprehensive article examining how sequence risk works, real examples from the 2022 market decline, and specific strategies that are effective in protecting your portfolio.

If You’re Close to (or in) Retirement You Need to Understand “Sequence of Returns Risk” (Updated 2026) explains sequence of returns risk—the danger of experiencing poor market returns early in retirement while simultaneously withdrawing from your portfolio—and why it’s the most critical threat facing near-retirees. Written from the perspective of someone now 73 with nine years of retirement experience, I validate theories with actual results from weathering both the 2020 COVID crash and 2022 inflation crisis. Nine years of retirement confirmed sequence risk isn’t academic—it’s real. Fellow retirees who entered retirement heavily in stocks with minimal cash reserves and panicked during downturns suffered permanent damage. Those who maintained cash buffers, conservative allocations, and discipline through volatility saw portfolios recover and exceed previous highs.

How Sequence Of Returns Affects Your Retirement (Updated 2026), written during the 2022 inflation crisis, when stocks were down significantly, examines sequence-of-returns risk through detailed mathematical examples showing how identical average returns can produce radically different retirement outcomes based solely on timing. I was six years into retirement, addressing retirees who retired at the 2021 market peak and are now experiencing the “double whammy” of declining portfolios and ongoing withdrawals. Sequence risk is real and measurable, particularly devastating for those retiring during market peaks. However, flexible spending strategies, appropriate asset allocation, guaranteed income sources, and adequate cash reserves can substantially mitigate damage. The article provides concrete examples showing that identical portfolios with identical average returns can yield completely different outcomes solely due to return sequences and withdrawal strategies.

The “Cash Bucket Strategy”: Defending Against Market Volatility (Updated 2026) introduces and validates the three-bucket retirement withdrawal strategy through nine years of actual implementation, including two major market crises. Originally written in the aftermath of the October 2020 COVID-19 surge, the 2026 update provides concrete evidence that the strategy works exactly as designed when tested under real-world stress. After nine years and two major crises, the cash bucket strategy delivers on its promises—protecting against sequence risk, providing psychological comfort during volatility, and maintaining spending without panic selling. Not optimal for pure returns (aggressive allocation would have generated more during strong years), but retirement isn’t just about maximizing returns. It’s about sustainable income, acceptable risk, and manageable stress. This strategy excels at all three. Peace of mind is priceless, and when the next market crisis arrives, properly positioned buckets allow you to sleep soundly through the storm.

Portfolio withdrawal strategies

All withdrawal strategies, despite their variety, fall into three general categories. Understanding these philosophies helps you see which approach might work best for your situation.

Fixed withdrawal strategies

The most famous fixed strategy is the 4% rule, developed by financial planner William Bengen in the 1990s. The concept is simple: In year one of retirement, you withdraw 4% of your initial portfolio balance. In year two, you use the same dollar amount, adjusted for inflation. You continue this pattern every year, regardless of market conditions.

The appeal of this approach is its predictability. You know what your “paycheck” will be. It’s simple to understand and implement. You don’t have to make difficult decisions every year about whether to increase or decrease spending. For people who value consistency above all else, it has real merit.

But the 4% rule has significant weaknesses. It ignores market conditions (except for inflation) entirely, so you keep withdrawing the same amount whether the market has just crashed 40% or soared 30%.

This inflexibility can be too conservative if markets perform well; you could end up with a much larger portfolio than you need and unnecessarily restrict your lifestyle and giving. But it can also be too aggressive if markets perform poorly or if you experience bad returns early in retirement—sequence risk can destroy a portfolio even if the 4% rule “should” work based on historical averages.

The 4% rule remains a valuable benchmark and starting point for evaluating sustainable withdrawal rates. But it’s no longer sufficient as your only strategy. We now know too much about how to improve it.

Sustainable Retirement Income—Part One: Fixed Withdrawals (Updated 2025) explores the most common approach to generating retirement income through systematic portfolio withdrawals, focusing on the famous 4% rule first proposed by William Bengen in 1994 and validated by the Trinity Study. The article explains how fixed withdrawal strategies work—taking an initial percentage (typically 3.5-4.5%) of your portfolio and adjusting that dollar amount annually for inflation, regardless of market performance—while acknowledging the strategy’s limitations, particularly the risk of accelerating depletion when withdrawing increasing amounts from depreciated assets during market downturns.

I have updated the article with more recent 2024 Morningstar research showing safe withdrawal rates of 3.9-4.0% in current interest rate environments. The article provides guidelines for conservative (3.5%), moderate (4.0%), and aggressive (4.5%) approaches based on stock allocation and risk tolerance.

Flexible withdrawal strategies

Flexible strategies represent the evolution beyond fixed rules. Instead of withdrawing the same inflation-adjusted amount every year regardless of circumstances, flexible approaches adjust your withdrawals up or down based on portfolio performance, market conditions, predetermined guardrails, or changes in your actual spending needs.

The philosophy is straightforward: When your portfolio is doing well, you can afford to withdraw more—or at least maintain your inflation adjustments. When your portfolio is struggling, you need to tighten your belt temporarily to preserve longevity. This responsive approach dramatically reduces sequence risk by avoiding forced withdrawals at the worst possible times.

The advantages are substantial. You reduce the risk of running out of money because you’re not blindly withdrawing during severe downturns. You increase portfolio longevity by protecting it when it’s most vulnerable. And you actually gain the freedom to increase spending when markets are strong, meaning you might enjoy your retirement more, rather than always living in fear of overspending.

Flexible withdrawal strategies are now considered the gold standard among financial planners who work with retirees. They’re more sophisticated, more responsive to reality, and demonstrably more effective at making money last than rigid fixed approaches.

Among flexible withdrawal approaches, the guardrail system—initially developed by financial planners Jonathan Guyton and William Klinger—has emerged as one of the most respected and practical frameworks for managing retirement withdrawals.

The basic concept is elegant. You start with an initial withdrawal rate, typically between 4% and 5%, depending on your age, portfolio allocation, and risk tolerance. Each year, you test whether your current withdrawal amount is still sustainable given your portfolio’s performance. If your portfolio has grown strongly and your withdrawal rate has fallen (meaning you’re withdrawing a smaller percentage of a now-larger portfolio), you can increase your spending. If your portfolio has struggled and your withdrawal rate has risen uncomfortably high (meaning you’re withdrawing a larger percentage of a now-smaller portfolio), you need to reduce your spending temporarily.

Sustainable Retirement Income–Part Two: Variable Withdrawals (Updated 2025) examines variable withdrawal strategies that adjust spending based on portfolio performance or other factors, in contrast to fixed withdrawal approaches. Updated with Morningstar’s December 2025 research, the article shows that flexible strategies now support starting withdrawal rates of 5.2-5.7%—dramatically higher than the 3.9% fixed-rate option—while delivering higher lifetime spending, though with more minor bequests and greater year-to-year income variability. Variable strategies now offer 33-46% higher starting withdrawal rates than fixed approaches, while delivering higher total lifetime income, according to 2025 research.

Hybrid “bucket” strategies

Bucket strategies represent a fundamentally different way of thinking about withdrawals. Instead of focusing on rules for percentages and adjustments, bucketing approaches organize your portfolio into distinct “buckets” with varying time horizons and purposes.

A typical three-bucket system works like this: Bucket One holds cash or near-cash (money market funds, short-term CDs, high-yield savings accounts) covering one to two years of living expenses. Bucket Two contains bonds, intermediate-term fixed income, TIPS, and other stable assets covering the next five to seven years of spending. Bucket Three holds stocks and growth assets for long-term appreciation, untouched during the early years of retirement.

The appeal is both practical and psychological. Practically, bucket strategies protect you from sequence risk because you never have to sell stocks during a downturn—you draw from Buckets One and Two while Bucket Three recovers. Psychologically, buckets are intuitive and comforting. You can see your near-term money safe and accessible, which reduces anxiety during market volatility.

When markets are strong, you “refill” the cash and bond buckets from the growth bucket, always maintaining that protective buffer. When markets struggle, you leave the growth bucket alone and live off the stable buckets until conditions improve. This creates a natural mechanism for not selling low.

The disadvantages are real, though. Bucket strategies can be implemented poorly, with too much money parked in low-return cash instruments that earn nothing while inflation erodes their value. They require disciplined rebalancing—you have to actually refill those buckets when markets are up, which psychologically feels like “selling winners” at precisely the moment you want to let them keep running. And if you’re not careful, a bucket approach can become overly conservative, sacrificing long-term growth for short-term security.

The best practical approach for most retirees combines elements of all three philosophies: a bucket structure to organize assets and manage sequence risk, flexible withdrawal rules (e.g., guardrails) to adjust spending based on portfolio performance, and an underlying withdrawal rate (e.g., 4%) as a baseline reference point. This hybrid approach provides structure, flexibility, and protection simultaneously.

The “Cash Bucket Strategy”: Defending Against Market Volatility (Updated 2026). This article is referenced and summarized in the section on sequence-of-returns risk above. It introduces and validates the three-bucket retirement withdrawal strategy through nine years of actual implementation, including two major market crises.

The “Cash Bucket Strategy”: Issues and Alternatives (Updated 2026) examines weaknesses in the traditional three-bucket retirement strategy and presents two modified approaches addressing these limitations. Written in November 2020 by someone who has used the bucket strategy since retiring in 2018, the article acknowledges the strategy’s value while honestly confronting its challenges, grounded in biblical wisdom about seeking counsel (Proverbs 15:22) and anticipating dangers (Proverbs 27:12). The three-bucket strategy isn’t perfect—low rates, prolonged downturns, and growth sacrifice create genuine risks requiring careful navigation. The income floor variation addresses sustainability concerns by guaranteeing income but requires an annuity commitment. The two-bucket approach simplifies management but requires greater tolerance for volatility and stronger rebalancing discipline. All versions demand balancing competing needs: near-term security versus long-term growth, psychological comfort versus mathematical optimization, simplicity versus control. Choose the option that best matches your savings level, risk tolerance, and stewardship priorities.

My “Bucket Strategy” (Updated 2026) outlines my “Wise Retirement Stewardship Strategy” (WRSS), a four-bucket approach for retirees with traditional IRAs who haven’t committed to annuitization, using Required Minimum Distributions (RMDs) as the framework for bucket allocation. The strategy allocates a $500,000 portfolio as follows: Bucket #1 holds two years of withdrawals ($36,534) in cash earning minimal interest; Bucket #2 contains years 3-4 ($36,892) in short-term investment-grade bonds or CDs; Bucket #3 holds years 5-10 ($121,579) in intermediate-term bonds and TIPS funds for modest income generation; and Bucket #4 receives the remaining 60% ($304,993) invested aggressively in dividend-growth funds, high-yield bonds, REITs, and preferred stocks using a “core and satellite” approach targeting 3-5% income plus capital appreciation. Annual withdrawals are determined by taking the higher of either the RMD (starting at 3.9% at age 72) or an estimated withdrawal amount (starting at 3.5% adjusted 2% annually for inflation), with the cash bucket refilled either through interest and dividends from all buckets (requiring 3.9% average annual return) or by selling appreciated assets from Bucket #4 during up markets while living off Buckets #1-3 during downturns.

Withdrawal sequencing: coordinating across account types

Which account type should you withdraw from, and in what order? This is where Tier 3 withdrawals intersect powerfully with the tax lever in the RFLE.

The conventional wisdom used to be simple: withdraw from taxable accounts first, traditional IRAs second, and Roth IRAs last. Delay taxes as long as possible, allowing tax-deferred accounts to compound, and preserve Roth dollars for the very end when they provide maximum flexibility.

This conventional wisdom is wrong for most retirees because it leads to unnecessarily high lifetime taxes. If you drain taxable accounts first and leave traditional IRAs untouched, those IRAs grow larger and larger. When RMDs begin at 73, you’re forced to take massive distributions from those large accounts. Those large RMDs push you into higher tax brackets, cause up to 85% of Social Security to become taxable, and trigger IRMAA surcharges that add thousands to your Medicare premiums. You end up paying far more in lifetime taxes than necessary.

The better approach is to coordinate withdrawals with strategic Roth conversions during early retirement, before RMDs begin. This typically works across three phases:

Phase 1 (ages 65-73): Your golden window for tax optimization. Take a hybrid approach—withdraw some from taxable accounts (harvesting capital gains at favorable rates), some from traditional IRAs (keeping yourself in the 12-22% brackets), and convert substantial amounts from traditional IRAs to Roth IRAs to fill up lower tax brackets without triggering IRMAA.

Phase 2 (ages 73-85): Now RMDs are mandatory. Your goal shifts from conversion to management—taking required RMDs, supplementing with Roth withdrawals when RMDs would push you into higher brackets, and using Qualified Charitable Distributions (QCDs) to satisfy RMD requirements while supporting your giving directly from IRAs tax-free.

Phase 3 (85+): By now, your early Roth conversions pay enormous dividends. When unexpected medical expenses arise or you need to pay for home healthcare or assisted living, you can draw heavily on Roth assets without tax consequences. Traditional IRA withdrawals for these purposes would not only be taxed but could trigger massive IRMAA surcharges.

This three-phase approach typically reduces lifetime taxes by $100,000 to $ 300,000 or more compared with the conventional approach. The savings come from keeping RMDs manageable, avoiding high brackets, minimizing Social Security taxation, and preventing IRMAA surcharges.

Required Minimum Distributions (RMDs)

Starting at age 73 (or 75 for those born in 1960+), the IRS requires you to withdraw a percentage of your traditional IRA and 401(k) balances each year. These Required Minimum Distributions exist because the government wants to collect taxes on money that’s been growing tax-deferred for decades.

Your RMD percentage starts around 3.8% at age 73 and gradually increases to roughly 5.3% by age 80, 6.3% by age 85, and 8.8% by age 90. For retirees with large traditional IRA balances, RMDs create significant challenges—fully taxable income that can push you into higher brackets, increase Social Security taxation, and trigger IRMAA surcharges.

The key to managing RMDs is to reduce the problem before it starts through Roth conversions during the ages 65-72. Every dollar you convert is a dollar that won’t be subject to RMDs later. Once RMDs begin, Qualified Charitable Distributions allow you to direct up to $105,000 annually (per person) from your IRA directly to charities. The distribution counts toward your RMD but doesn’t count as taxable income—extraordinarily tax-efficient for retirees who give regularly.

Thinking (But Not Too Concerned) About RMDs (Updated 2026) demystifies Required Minimum Distributions (RMDs), arguing they’re far less threatening than retirement media suggests, especially for retirees already withdrawing from savings—validated by my personal experience after taking my first RMDs at age 73. Recent legislation has made RMDs more manageable: the SECURE Act raised the starting age from 70½ to 72, then SECURE 2.0 raised it again to age 73 (for those born 1951-1959) or 75 (for those born 1960+), reduced penalties from 50% to 25%, and increased QCD limits to $105,000 and QLAC limits to $200,000 (more on QCDs and QLACs in the Tax lever series).

Part-time work: the under-appreciated income source

Part-time work during retirement deserves more attention than it receives. I’m talking about strategic, voluntary, meaningful work that reduces portfolio pressure while providing purpose, social connection, and mental stimulation.

The financial impact of even modest earnings can be dramatic. A retiree with a $600,000 portfolio planning a 4% withdrawal rate ($24,000 annually) who instead earns $15,000 annually from part-time work for five years can reduce portfolio withdrawals to $9,000 during those years. This $75,000 reduction in withdrawals, combined with continued portfolio growth, can extend portfolio longevity by 5-7 years or more.

Beyond direct financial benefit, part-time work allows you to delay Social Security to age 70 (increasing guaranteed lifetime benefits by 24%), provides natural inflation protection that portfolio withdrawals don’t, and can fund Roth IRA contributions even during retirement (up to $8,000 for those 50+). The best part-time work leverages existing skills, has flexible hours and minimal stress, provides meaningful social interaction, and pays reasonably well for the time invested.

Working in Retirement (Seriously?) (Updated 2026) argues that working in some capacity during retirement provides both essential purpose and transformative financial benefits, a claim validated by my nine years of retirement experience, which combined blog writing with occasional consulting. While 54% of workers now expect to continue working after retirement (driven by financial necessity, desire for engagement, and dramatically expanded gig economy opportunities), the financial implications extend far beyond supplemental income: working part-time ages 65-70 while delaying Social Security and avoiding portfolio withdrawals can add $400,000-600,000 in lifetime financial security through multiple compounding mechanisms including permanently higher Social Security benefits (24-32% increase from delaying to age 70), preserved portfolio growth during critical sequence-risk years, dramatically reduced withdrawal rates (converting dangerous 6% rates to safe 3% rates), tax efficiency advantages (Roth contributions, QBI deductions, strategic bracket management), Social Security earnings test navigation, and healthcare cost savings (employer coverage saving $15,000-25,000 over 2-3 years pre-Medicare).

Strategic asset sales: one-time or ongoing

Beyond routine portfolio withdrawals, retirees sometimes face decisions about selling major assets—downsizing the family home, selling rental property, liquidating a business, or converting collectibles to cash.

Downsizing your home represents the most common strategic asset sale. Selling a $500,000 house and moving to a $300,000 condo releases $200,000 (after transaction costs), reduces ongoing expenses, simplifies your life, and improves safety as you age. The home sale exclusion ($250,000 single, $500,000 married) means you typically pay no capital gains tax on primary residence appreciation.

Home Equity and Your Retirement (Updated 2026) examines home equity as a critical retirement resource that has been transformed by the 2020-2024 housing boom, with total U.S. homeowner equity more than doubling from $14.44 trillion (2017) to $32 trillion (2025), median home values rising 75% from $240,000 to $420,000, and median home equity for ages 65+ nearly doubling from $130,000 to $250,000—still representing roughly 60% of average retiree net worth, especially for lower-to-middle-income households. Discusses how a paid-off home creates substantial financial margin ($24,000 annually in his case, equivalent to needing $600,000 less in retirement savings), though he cautions against viewing appreciation as permanent wealth until actually realized through sale. Home equity provides multiple retirement benefits: reducing expenses when paid off, serving as emergency reserves through HELOCs (though rates have spiked from 5-6% in 2018 to 7-9% in 2025, making borrowing far more expensive), enabling downsizing strategies that can free up substantial cash while reducing ongoing costs (detailed example shows $18,600 annual savings plus $55,000 freed-up cash), and as a last resort, funding supplemental income through reverse mortgages—though these remain expensive with 5-7% upfront costs and 7-9% ongoing interest rates that rapidly deplete equity (example shows $250,000 reverse mortgage growing to $517,000 debt in 10 years, leaving minimal equity despite home appreciation).

Housing Decisions and Financing Options in Retirement (Updated 2026) examines five strategic housing options for retirees (downsizing to reduce expenses, using HELOCs or home equity loans for repairs/upgrades, reverse mortgages for income, staying put with plans to move later, or moving to a different home), providing comprehensive analysis of each approach within the dramatically transformed financial landscape since the original 2021 publication—specifically, home values rising 40% from $300,000 to $420,000 (2021-2025), HELOC rates spiking from 3-4% to 7-9%, 30-year mortgage rates doubling from 3% to 6.5-7%, and reverse mortgage rates rising from 4-5% to 7-9%, fundamentally changing the cost-benefit calculations for each strategy. The article grounds biblical perspectives on home as sanctuary and blessing (Isaiah 32:18, 65:21-22) while detailing practical mechanics including HELOC interest calculations, reverse mortgage costs (5-7% upfront plus ongoing interest rapidly depleting equity), HECM for Purchase options for upsizing, and current regulatory requirements like mandatory financial assessments.

Selling rental property eliminates landlord responsibilities but involves capital gains taxes plus depreciation recapture. Some retirees find that selling rental property in their 70s, while still capable of managing the sale process and before cognitive decline becomes a concern, provides peace of mind worth the tax cost.

One creative approach combines strategic asset sales with charitable giving. Donating highly appreciated assets—whether stocks, real estate, or business interests—to donor-advised funds or directly to charities eliminates capital gains taxes entirely while providing a charitable deduction.

The stewardship perspective on Tier 3 withdrawals

Withdrawal management isn’t just technical financial planning; it’s also deeply theological. Scripture ties income to God’s provision, our stewardship responsibilities, and our ability to serve and give. In retirement, income reflects God’s lifelong faithfulness, your past diligence, and ongoing trust in His provision.

Two behavioral challenges commonly emerge. First, “consumption anxiety”—difficulty actually spending money you’ve spent 40 years accumulating. The antidote is reframing withdrawals as receiving the harvest from seeds you planted decades ago, distinguishing essential from discretionary spending, and building flexibility through guardrails.

Second, overspending in early active retirement years without adequate regard for longevity and late-life healthcare needs. The solution isn’t denying yourself enjoyment—it’s building a sustainable spending plan that accounts for the full retirement arc from go-go years (65-75) through slow-go years (75-85) to no-go years (85+).

From a stewardship perspective, wise withdrawal planning ensures resources last as long as they’re needed while maintaining capacity for generosity. Proverbs 21:5 reminds us that diligent planning leads to abundance. First Timothy 5:8 teaches provision for household members. Second Corinthians 9:7 encourages cheerful giving. A wise withdrawal strategy should preserve, and ideally increase, your capacity for generous giving throughout retirement, rather than gradually squeezing it out.

Common mistakes to avoid

After nine years of retirement and countless conversations with fellow retirees, several withdrawal mistakes consistently damage retirement outcomes:

Claiming Social Security at 62 when financially unnecessary permanently reduces guaranteed income and increases portfolio pressure. Withdrawing at fixed dollar amounts, regardless of market conditions, exposes you to sequence risk. Ignoring Roth conversions during early retirement (ages 65-73) forces you into higher lifetime taxes. Withdrawing from accounts in the wrong sequence maximizes taxes rather than minimizing them. Maintaining too much cash (3+ years) sacrifices growth, while too little cash (under 12 months) increases sequence risk. Failing to distinguish essential from discretionary spending prevents effective guardrail implementation. Ignoring IRMAA cliffs costs thousands in unnecessary Medicare premiums. Being overly conservative means many retirees die with most of their wealth intact, having unnecessarily restricted their spending and giving.

Bottom line: orchestrating Tier 3 for sustainability and lifelong financial peace

Tier 3 income—portfolio withdrawals, RMDs, Roth distributions, part-time earnings, and strategic asset sales—represents the most complex and consequential aspect of retirement income planning. Unlike Tier 1’s guaranteed income and Tier 2’s semi-stable cash flow, Tier 3 requires active, ongoing management and coordination.

The key principles that emerge from both research and practical experience center on five areas. First, maintain spending flexibility through guardrail systems that protect portfolio longevity while allowing increased spending when appropriate. Second, build robust liquidity buffers through cash and bond buckets that eliminate forced selling during bear markets. Third, manage withdrawal sequencing strategically across account types to minimize lifetime taxes. Fourth, consider the full retirement arc from go-go years through late-life healthcare needs. Fifth, preserve capacity for generous giving throughout retirement.

Financial Gurus vs. Economics Professors examines the fundamental differences between advice from popular personal finance “gurus” (like Dave Ramsey) and academic economists/professors, drawing on Yale Professor James J. Choi’s research paper comparing 47 personal finance books to academic economic models. The core debate centers on life-cycle economics theory versus practical behavioral advice—economists theoretically recommend saving less when young and more in mid-life peak earning years (based on Franco Modigliani’s work), while gurus advocate for consistent high savings rates throughout life because behavioral simplicity and habit-building work better in practice despite being theoretically suboptimal. I conclude that while you respect academia and economic science, the gurus may actually have it right about what works best in practice, particularly because building a savings habit early acknowledges the reality of limited willpower and the difficulty of abruptly changing financial behaviors later in life. However, I also note that in my book Redeeming Retirement, I suggest it is possible to get a late start and still succeed by saving heavily in mid-life peak earning years (agreeing with economists), though you acknowledge that building early saving habits is probably best even at relatively low percentages due to human nature.

This is what stewardship looks like in practice—not hoarding, not overspending, but wise management that honors God, provides for needs, blesses family, and enables generosity. Your Tier 3 withdrawal strategy is where this stewardship becomes most tangible and most consequential.

I even coined a phrase — and a blog title — that you don’t hear very often: Retirement Stewardship. Which, if I’m honest, sounds a little like I’m managing the retirement of a small country. But stick with me.

The average Christian doesn’t use the word nearly as often as I do. When was the last time you got up on a Monday morning and said, “By God’s grace, I’m going to practice wise stewardship today”? It also gets grammatically strange in ways people don’t always notice. As a noun, it’s fine — “stewardship.” As a verb, it gets wobbly — “I’m going to steward this well.” And as an adverb, it goes completely off the rails — “I’m going to handle this in a stewardly way.” I’ve actually never heard or said that last one—I want that on the record.

For some who hear it, the word simply evokes I have no idea what you’re talking about. Others hear it and instinctively hold on to their wallets. And it strikes particular fear into anyone without a budget who has a car loan, because it immediately conjures up Dave Ramsey wagging his finger at them across the screen, delivering his verdict: Bad steward. Bad steward.

The word sounds strange partly because it’s old and used mostly by Christians — and by people on cruise ships, where a steward brings you a towel. It comes from the Old English stiward, meaning “manager of a household or estate,” and the biblical concept behind it is genuinely profound. Scripture is remarkably consistent: everything we have belongs to God, and we are managers, not owners. Our money, our time, our possessions, our bodies, our relationships — all of it held in trust, all of it to be handled with care and accountability. “Moreover, it is required of stewards that they be found faithful” (1 Cor. 4:2). That is not a small idea. That is a complete reorientation of how we think about everything we think we own.

The problem—and Earl knows this problem personally, from both sides of it—is that a big idea applied without wisdom or proportion can become its own kind of burden. When stewardship becomes the lens through which every single decision must be filtered, and every choice must be justified theologically, it stops being liberating and starts being exhausting. For the people around you, anyway. Dot has a word for this. It isn’t stewardship. Tippy also has thoughts, which he keeps mostly to himself, which is one of the things that makes him the wisest creature in the room.

The truth is that faithful stewardship isn’t primarily about using the word correctly or applying it comprehensively to every line item in your budget with the grim determination of a theological auditor. It’s about a posture—a wise, peaceful, grateful, loving, faith-filled daily orientation toward God that says: everything I have belongs to Him, and I want to handle it in a way that honors that. That posture shows up in the big decisions and the small ones. In the car you drive, and yes, arguably, in the cheese you eat. Though I would argue—and I feel strongly about this—that stewardship means saving money where you can and should, but scrimping on cheese is not one of those places (just ask my wife), nor are your children’s or grandchildren’s birthday presents, for example, or your giving to your local church.

The point is that it shows up quietly, in wise and generous choices made from a heart of gratitude, not as a lecture series delivered to your family every Saturday afternoon while they’re trying to watch the ball game or a movie.

Even Tippy knows when enough is enough. He once ate an entire wheel of brie off the counter without a moment of theological reflection on stewardship. And honestly, he seemed at peace with that.

So welcome to The Lighter Side, which will be a recurring feature where Earl, his wife Dot, and their dog Tippy take a sideways look at retirement, aging, money, faith, and the occasionally bewildering experience of being a Christian trying to finish well in a world that can’t quite agree on what that means. You’ll also meet Norn, Earl and Dot’s neighbor and friend, and their pastor, Dave.

Earl works hard at the “retirement thing” and means well. Dot sees things simply and clearly, but often has a degree of skepticism. Norm is the retirement magazine poster boy. Pastor Dave is the younger, patient, and often wiser one. And Tippy, who’s named after a certain inflation-protected financial instrument, never misses a chance to offer thoughts and “tips” of his own—he has questions and opinions about everything.

If you’ve ever bought a retirement book that directly contradicts the last retirement book you bought, you may see yourself here. If you’ve been frustrated by all the noise and conflicting claims in the financial media or been confused by an earnest financial advisor, you’ll find something in these cartoons to smile about.

I’ve tried to capture the essence of The Lighter Side in this week’s first installment. I hope you like it—new installments of The Lighter Side will appear regularly right here on the blog and in the newsletter. My intent is for each one to tackle a topic from a humorous angle while always landing on a genuine point.

Oh, and by the way, these cartoons are not AI-generated. I hand-draw them with an app called “SketchNow.” Honestly, it’s primarily intended for developing presentations, not cartoons, but I’m finding ways to make it work. I used it to create all the little cartoons on each chapter-heading page in NextGen Steward: Planning and Living for the Glory of God.

Drop me a line and let me know what you think, or if you have a suggestion for a cartoon.

In the previous article, we explored Tier 1 Income—your guaranteed, lifetime income floor from Social Security, pensions, and annuities. This foundation is the bedrock of a sustainable retirement, providing income you cannot outlive, regardless of market conditions.

We now move to Tier 2: the stability layer that bridges the gap between your guaranteed income floor and the growth-oriented investments in Tier 3. Think of this as the middle floor of your sustainable retirement income house—not quite as secure as the foundation, but far more stable than relying on volatile stock market withdrawals.

From the Sustainability Principle perspective, Tier 2 income enhances retirement sustainability by providing a reliable (though not guaranteed) cash flow that reduces your dependence on portfolio withdrawals, cushions against sequence risk, and maintains your income stability during market turbulence.

Tier 2 Components

Bond Interest: The Core of Tier 2

Bonds form the core of Tier 2 for most retirees seeking sustainable retirement income. When you own bonds (either individually or through funds), you receive regular interest payments, typically semi-annually for individual bonds, monthly for most bond funds.

Why bonds matter for retirement sustainability:

Predictable payments: Unlike stock dividends (which can be cut), bond interest is contractually obligated. If you own a 10-year Treasury bond paying 4.5%, you’ll receive 4.5% annually until maturity, regardless of market conditions. This predictability contributes directly to sustainable income.

Lower volatility than stocks: While bond prices fluctuate (especially with interest rate changes), they’re far less volatile than stocks. A diversified bond fund rarely loses more than 5-10% in a bad year, compared with 20-50% in a severe bear market for stocks. This stability protects retirement sustainability.

Negative correlation with stocks (usually, but not always): Historically, when stocks decline sharply, investors flee to bonds, pushing bond prices up. This relationship broke down temporarily in 2022 when both declined simultaneously, but over the long term, bonds provide valuable diversification that enhances portfolio sustainability.

Capital preservation: Investment-grade bonds almost always return your principal at maturity (for individual bonds) or maintain reasonably stable values over time (for funds), helping preserve capital and support sustainable retirement.

How Interest Rates are Impacting Retirees (Updated 2026) was originally published in September 2023 when the Fed Funds rate had peaked at 5.33% after aggressive rate increases to combat inflation, but the interest rate landscape has shifted significantly by April 2026—the Fed reversed course with three quarter-point cuts in late 2025, bringing rates down to 3.50-3.75%, though they’ve held steady since January 2026 due to persistent inflation (2.7-3.3%) and Middle East geopolitical tensions. While the rate environment remains more favorable for retirees than the near-zero rates of 2020-2021, the benefits are moderating: money market funds now yield 3.4-3.7% (down from 4.95% peaks), 5-year Treasuries around 4.0-4.2%, and immediate annuity payouts remain historically attractive at 8.2-8.4% for my age (73), though these will likely decline if the Fed continues cutting.

Individual Bonds vs. Bond Funds

This is one of the perennial debates in retirement planning. Should you own individual bonds or bond funds?

Individual Bonds or Bond Funds? (Updated 2026) compares individual bonds versus bond funds for retirees, explaining that while individual bonds provide a guaranteed principal return if held to maturity (making them ideal for specific future expenses such as college tuition), bond funds offer simplicity, instant diversification, and professional management that better serve retirees primarily seeking sustainable income. The 2026 update reveals that after holding bond funds through the painful 2022 losses, they fully recovered by 2024-2025. The article concludes that bond funds are generally superior for most retirees due to lower costs, easier management, monthly income, and professional oversight. In contrast, individual bonds are appropriate primarily for wealthy investors with specific future obligations or for those who can’t tolerate fund price volatility, even when held for income.

Bond Ladders

For retirees who prefer individual bonds, laddering is a standard approach. A bond ladder is a strategy of owning bonds with staggered maturities—perhaps maturing each year for the next 5-10 years.

The challenge with ladders is that they require significant capital ($50,000-100,000 minimum to build a proper ladder), more work to manage, and you need expertise to select appropriate bonds. This is why many retirees prefer bond funds despite giving up the maturity guarantee.

To Ladder or Not to Ladder? (Updated January 2026) examines bond ladders versus bond funds for retirement income, with a major 2026 update revealing that TIPS ladders have become one of the most compelling retirement income strategies available, driven by improved real yields and groundbreaking Morningstar research. The article distinguishes between rolling ladders (which behave like bond funds and offer no real advantages) and non-rolling ladders designed to match specific future spending needs, providing a pathway to enhanced retirement sustainability for those with sufficient capital.

(Note: There is an article with more about TIPS Ladders in the TIPS section, below.)

Types of Tier 2 Bonds

Treasury Bonds: Backed by the U.S. government, essentially zero default risk. Yields lower than corporate bonds, but maximum safety to protect retirement sustainability. Current 10-year Treasury yields are around 4.3-4.7% (as of late 2025).

Investment-Grade Corporate Bonds: Issued by financially stable companies rated BBB- or higher. Slightly higher yields than Treasuries (typically 0.5-2% more) with modest additional risk. A good balance of income and safety for a sustainable retirement.

Municipal Bonds: Issued by state/local governments. Interest is federally tax-exempt and sometimes state tax-exempt. For high earners in high-tax states, tax-equivalent yields can exceed corporate bonds. Lower nominal yields but potentially higher after-tax yields, enhancing net sustainable income.

Agency Bonds: Issued by government-sponsored entities like Fannie Mae and Freddie Mac. Not quite as safe as Treasuries but still very secure. Yields slightly higher than Treasuries.

Avoid for Tier 2: High-yield (“junk”) bonds, emerging-market debt, and long-duration bonds (20-30-year maturities). These belong in Tier 3 (if anywhere) due to higher risk and volatility that can undermine the stability essential to sustainable income.

Bond Funds

Most retirees prefer bond funds to individual bonds, although, as noted above, individual bonds are preferable in certain situations for matching specific future expenses.

Bond funds provide instant diversification (hundreds of bonds), professional management, easy buying and selling, and monthly income distributions—all features that support sustainable retirement income.

I hold a mix of intermediate-term TIPS and total bond market funds, currently yielding approximately 4.2%, more than double what they yielded in 2020-2021. This enhanced yield significantly strengthens my Tier 2 sustainable income.

The 2022 Bond “Crisis”

All bondholders learned an important lesson in 2022: Bonds can lose value in rising-rate environments, sometimes substantially. But if you’re holding them for income rather than trading them, the higher yields that follow rate increases eventually offset the temporary capital losses—patience and discipline are key to maintaining sustainable income strategies.

Do Bonds Still Belong in a Retiree’s Portfolio (Updated 2026) was written after bonds suffered unprecedented 13% losses in 2022 alongside simultaneous stock declines, argues that bonds still belong in retiree portfolios for five key reasons that support sustainable retirement: they improve risk/reward ratios when combined with stocks, provide relatively safe predictable income (especially with yields now at 4%+ instead of 2%), can be matched to future spending needs, are low-cost and easy to purchase as funds, and offer professional management and transparency. The article argues that bonds remain essential to sustainable retirement income despite the challenges of 2022.

Dividend Income: Stable Cash Flow with Growth Potential

While Tier 2 is primarily about bonds, quality dividend-paying stocks also contribute stable income—though with more risk than bonds. I hold a dividend stock ETF because I like the regular income. But I also know that there is no significant advantage to holding dividend-paying stocks versus those that reinvest their earnings from a pure return perspective.

Dividend Investing in Retirement (New) examines dividend investing in retirement from both academic and practical perspectives, acknowledging that while modern portfolio theory correctly identifies dividends as economically equivalent to selling shares, the behavioral reality differs significantly. The article presents the trade-off: dividend investing may cost 0.5-1% in annual returns but provides behavioral stability that prevents panic selling during bear markets, thereby contributing to sustainable retirement by protecting against destructive investor behavior. It concludes that dividend investing makes sense for retirees who value the sleep-at-night factor over maximum returns, are in retirement or nearing it, have lower risk tolerance, and want simplified cash flow, but is less appropriate for younger accumulators, high-tax-bracket investors, or those who can handle systematic share sales during market declines.

Dividend-Paying Companies

Dividend Aristocrats: Companies that have increased dividends for 25+ consecutive years. These blue-chip companies (think Johnson & Johnson, Coca-Cola, Procter & Gamble) have proven their ability to maintain and grow dividends through multiple recessions, providing sustainable income even during economic downturns.

High-quality dividend payers: Established companies in defensive sectors (utilities, consumer staples, healthcare) that pay consistent dividends, though perhaps without the 25-year track record of Aristocrats. Still valuable for sustainable Tier 2 income.

Dividend-Focused Funds

These are mutual funds or ETFs that hold dividend-paying stocks:

• Vanguard Dividend Appreciation (VIG): Dividend growth focus, 1.9% yield

• Fidelity High Dividend ETF (FDVV): High dividend focus with appreciation, 2.80% yield

• Schwab U.S. Dividend Equity (SCHD): High-quality dividend payers, 3.5% yield

• Vanguard High Dividend Yield (VYM): Higher current yield focus, 3.1% yield

I hold FDVV and SCHD in my portfolio specifically for Tier 2 income. They generate reliable quarterly dividends that have grown steadily, providing both current income and inflation protection over time, and also enough growth to keep up with inflation—all contributing to long-term sustainable income.

Real Estate Income: Diversification for Sustainability

Rental properties and Real Estate Investment Trusts (REITs) can generate substantial Tier 2 income, though they come with management requirements and cyclical risk.

Direct Rental Properties

This investment involves purchasing a property and renting it out for income. It offers potentially high income (5-8% net rental yield in many markets), inflation protection, and many tax advantages. However, it comes with significant overhead (or expense if you outsource it to a management company). You also have limited liquidity and may incur high capital costs due to maintenance/repairs.

Is Purchasing a Rental/Vacation Home Wise Stewardship? (Updated 2026) examines whether buying a vacation home is wise stewardship, distinguishing among three approaches: pure lifestyle (a second home for personal use only), pure investment (a rental property for income), and mixed-use (a personal vacation home that’s also rented out). Vacation homes are primarily lifestyle decisions with emotional appeal. If you must highly leverage it and depend on rental income to make ends meet, odds are financially against you, and it threatens rather than enhances sustainability. Be honest about whether you want a vacation home for enjoyment (accept the full cost) or a true investment property (buy something you won’t use personally in a strong rental market).

Who this works for: Retirees with property management experience or interest, those who enjoy being landlords, and people who already own rental properties and know what they’re doing.

Who should avoid: Retirees seeking simplicity and sustainable income without management hassles, those without property experience, and anyone who doesn’t want tenant phone calls at 10 PM about broken water heaters.

REITs (Real Estate Investment Trusts)

REITs are companies that own and operate income-producing real estate such as apartments, office buildings, shopping centers, hotels, warehouses, and healthcare facilities. By law, they must distribute at least 90% of their taxable income to shareholders as dividends, making them attractive to income-focused investors seeking sustainable retirement income. You can buy REITs like stocks through any brokerage account, gaining instant exposure to diversified real estate portfolios without the hassles of direct property ownership—no tenant calls, no maintenance emergencies, no property management responsibilities.

As of late 2025, quality REIT funds yield approximately 3.5-5.5%, providing both current income and potential for dividend growth as rents keep pace with inflation—both important for a sustainable retirement. The main drawbacks are that REIT dividends are taxed as ordinary income rather than at preferential qualified dividend rates, prices fluctuate with the stock market, and REITs tend to be sensitive to interest rate changes. They work well as a modest allocation (5-10% of the portfolio) for retirees seeking income diversification and real estate exposure without the complexity of being landlords.

Quality REIT funds:

• Vanguard Real Estate ETF (VNQ): Broad REIT exposure, 4.2% yield, 0.12% fee

• Schwab U.S. REIT ETF (SCHH): Similar to Vanguard, 4.1% yield, 0.07% fee

• iShares Cohen & Steers REIT (ICF): Actively managed, higher quality focus

Although I have invested in REITs in the past, I don’t currently hold any. And my only direct real estate investment is my house, which is a non-trivial part of our total net worth.

CD Ladders: Conservative Stability

Certificates of Deposit provide guaranteed returns for their term, making them a conservative Tier 2 option, especially for risk-averse retirees seeking absolute stability in their sustainable income plan.

CD ladders work very similarly to bond ladders; you stagger maturity dates. For example:

• $20,000 in a 1-year CD

• $20,000 in a 2-year CD

• $20,000 in a 3-year CD

• $20,000 in a 4-year CD

• $20,000 in a 5-year CD

Each year, as a CD matures, you roll it into a new 5-year CD at current rates.

CDs work great for: Very conservative retirees who value absolute safety over yield, those building short-term reserve funds, and people uncomfortable with bond market volatility.

In my opinion, CDs made more sense when bond yields were 2% and CD rates were 1.8%—the safety premium was small. Now, with bonds at 4.5% and CDs at 4.0%, I prefer bonds for their higher yield and liquidity, but CDs serve a valid purpose for those prioritizing absolute safety in their sustainable income strategy.

TIPS (Treasury Inflation-Protected Securities): Inflation Protection for Sustainability

TIPS deserve special attention as a unique Tier 2 asset that combines Treasury safety with inflation protection—both of which are critical for multi-decade retirement sustainability. TIPS are U.S. Treasury bonds specifically designed to protect against inflation by automatically adjusting their principal value in response to changes in the Consumer Price Index (CPI).

When you buy a TIPS bond, you receive a fixed interest rate (currently around 2.0-2.5% as of late 2025) that’s paid on the inflation-adjusted principal amount. For example, if you own a $10,000 TIPS with a 2% coupon and inflation runs 3% in year one, your principal adjusts to $10,300, and you receive 2% of that adjusted amount as interest. At maturity, you receive the higher of the original principal or the inflation-adjusted principal.

TIPS can be owned individually through TreasuryDirect.gov or major brokerages, or through low-cost funds like Vanguard’s VTIP or Schwab’s SCHP. They provide unique benefits, including guaranteed real returns above inflation (essential for long-term sustainability), absolute safety backed by the U.S. government, and perfect inflation hedging.

The main disadvantages are lower nominal yields than regular Treasuries, “phantom income” taxation on principal adjustments, even though you don’t receive that money until maturity (making them better suited for IRAs), and underperformance if actual inflation runs lower than expected.

TIPS work well as 15-30% of a bond allocation for retirees concerned about inflation eroding their purchasing power over a long retirement—a key threat to financial sustainability.

Why Invest in TIPS? (Updated 2026) explains Treasury Inflation-Protected Securities (TIPS) and their role in retirement portfolios, particularly during the high-inflation environment of 2022-2023. The 2023 article was written at the inflection point when TIPS real yields had just turned positive after years in negative territory. The tone is cautiously optimistic about the improving environment. The 2026 update reflects another 2+ years of experience, much higher real yields (2.0-2.2% vs. 1.3%), the incorporation of Morningstar TIPS ladder research, integration of the Sustainability Principle framework, and lessons from the complete 2022 bond crisis recovery. It ends by noting interest in TIPS ladders and promises to discuss that topic in the next article in the series (see below).

Why a TIPS Ladder? (Updated 2026) examines whether building a TIPS ladder—a series of individual TIPS bonds maturing annually—makes sense compared to holding TIPS funds. I distinguish between short-term ladders (5-10 years) and long-term ladders (20-30 years), explaining that non-rolling bond ladders work best for funding specific future spending needs with certainty (maximizing sustainability for known expenses), while TIPS funds are better suited for portfolio diversification and regular income. TIPS ladders work best for retirees with other income sources (Social Security, pensions) who need absolute certainty about future spending and can commit capital for the full ladder duration without the risk of forced liquidation. Those seeking flexibility and who already maintain sustainable withdrawal rates may be better served by TIPS funds.

TIPS funds:

• Vanguard Short-Term Inflation-Protected Securities (VTIP): 0-5 year maturities, low volatility

• Schwab U.S. TIPS ETF (SCHP): Broad maturity range

• iShares TIPS Bond ETF (TIP): Most popular, high liquidity

• Fidelity TIPS Index Fund (FIPDX): Managed index fund at a low cost

I hold a significant TIPS allocation (about 10% of my total portfolio) through FIPDX, viewing it as insurance against unexpected inflation rather than as a bet on it outperforming regular bonds—but essential insurance for protecting the long-term sustainability of my purchasing power.

Why Tier 2 Matters for Sustainable Retirement

Tier 2 income serves several critical functions in building and maintaining a sustainable retirement:

1. Reduces Portfolio Withdrawal Pressure

The more income your portfolio generates through interest and dividends (Tier 2), the less you need to withdraw principal (Tier 3). This makes a dramatic difference in sustainability.

Example comparison:

Retiree A: $500,000 portfolio generating 1.5% income = $7,500/year

• Needs $30,000 total from portfolio

• Must withdraw $22,500 of principal

• Effective withdrawal rate: 4.5%

• Sustainability concern: High withdrawal rate

Retiree B: $500,000 portfolio generating 4.0% income = $20,000/year

• Needs $30,000 total from portfolio

• Must withdraw $10,000 principal

• Effective withdrawal rate: 2.0%

• Sustainability: Much stronger

Retiree B’s portfolio is far more sustainable simply because Tier 2 income covers more of the spending need, requiring less principal withdrawal. This is the Sustainability Principle in action.

2. Provides Predictable (But Not Guaranteed) Cash Flow

Unlike stock appreciation (which is lumpy and unpredictable), Tier 2 income arrives regularly:

• Bond interest: Monthly or semi-annually

• Dividends: Quarterly

• REIT distributions: Quarterly

• CD interest: At maturity or annually

This predictability makes budgeting easier, enhances financial sustainability, and reduces the psychological stress of wondering “can I sell stocks this month or is the market down?”

3. Cushions Against Sequence Risk

If you retire and immediately experience poor stock returns, robust Tier 2 income means you’re not forced to sell stocks at depressed prices—a critical threat to retirement sustainability. Your bond interest, dividends, and other Tier 2 sources continue to flow regardless of the stock market, allowing you to wait for a recovery before selling stocks. This protection is essential for sustainable retirement.

4. Bridges Essential and Discretionary Spending

Ideally, Tier 1 covers essential expenses (housing, food, healthcare, insurance). Tier 2 then covers:

• Some discretionary spending (dining out, entertainment)

• Margin above bare essentials

• Gifts and charitable giving

• Travel and hobbies

This separation means market downturns affect wants but not needs—psychologically much easier to handle and far more sustainable financially.

How Much Should You Allocate to Tier 2 for Optimal Sustainability?

There’s no universal answer, but here are guidelines based on your situation and sustainability goals:

Conservative retiree (low risk tolerance, modest spending needs):

• 50-60% of portfolio in Tier 2 assets (bonds, dividend stocks, CDs)

• Generating 3.5-4.5% income

• Combined with Social Security, covers most spending

• Minimal Tier 3 reliance

• Sustainability: Very high

Moderate retiree (balanced approach, average spending):

• 40-50% of portfolio in Tier 2 assets

• Generating 3.0-4.0% income

• Social Security + Tier 2 income covers essentials plus some discretionary

• Tier 3 provides margin and growth

• Sustainability: Good to strong

Aggressive retiree (higher risk tolerance, larger portfolio, higher spending or growth emphasis):

• 30-40% of portfolio in Tier 2 assets

• Generating 2.5-3.5% income

• Relies more on Tier 3 (stock growth) for sustainability

• Works only if the portfolio is large relative to spending needs

• Sustainability: Adequate if the portfolio is large enough

Common Mistakes That Undermine Tier 2 Sustainability

Reaching for yield: Don’t chase 8-10% yields from junk bonds, sketchy dividend stocks, or complex structured products. Sustainable Tier 2 income means accepting moderate yields (3-5%) from quality sources. High-yield chasing often backfires and threatens sustainability.

Ignoring taxes: Bond interest is taxed as ordinary income; qualified dividends are taxed at preferential rates. Structure accordingly—bonds in IRAs, dividend stocks in taxable accounts when possible. Tax efficiency enhances net sustainable income.

All bonds or no bonds: Either extreme is problematic for sustainability. Pure bonds miss growth needed for long-term sustainability; no bonds miss stability that protects near-term sustainability. Balance matters.

Forgetting inflation: Fixed bond interest loses purchasing power over time, threatening long-term sustainability. Include some dividend-payers and TIPS for inflation protection to maintain sustainable purchasing power.

Panic-selling during volatility: 2022 taught us that bonds can lose value in the short term. If using them for income, hold through volatility—the higher yields eventually compensate. Panic selling destroys the sustainability strategy.

Over-complicating: You don’t need 15 different Tier 2 income sources. A total bond fund, a dividend stock fund, maybe some TIPS. Simple works better for sustainable income management.

A Stewardship Perspective on Tier 2 Income

From a biblical stewardship perspective, Tier 2 income represents wise management of the resources God has entrusted to us. It balances the competing goals of safety and growth, providing the stability that enables both present provision and future sustainability.

Building a robust Tier 2 income layer isn’t about greed or hoarding—it’s about creating the sustainable income stream that allows you to:

• Provide for your household without anxiety (1 Timothy 5:8)

• Maintain capacity for generosity (2 Corinthians 9:6-8)

• Avoid becoming a burden to others (2 Thessalonians 3:8)

• Exercise faithful stewardship over God’s resources (1 Peter 4:10)

The stability that Tier 2 provides creates margin—not just financial margin, but emotional and spiritual margin that frees you to focus on kingdom purposes rather than constant worry about market fluctuations.

“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.” (Proverbs 21:5, ESV)

Building Tier 2 income is an act of diligent planning—creating sustainable income streams that will serve you faithfully for decades of retirement.

The Sustainability Value of Tier 2

Tier 2 income is the often-overlooked middle layer that makes sustainable retirement work smoothly. It’s not as exciting as Tier 1’s lifetime guarantees or Tier 3’s growth potential, but it’s the workhorse that generates steady, reliable cash flow year after year—the cash flow that transforms theoretical sustainability into practical, livable reality.

By thoughtfully constructing your Tier 2 income layer—through bonds, quality dividend stocks, and perhaps TIPS or REITs—you create the stability that allows you to maintain your lifestyle during market volatility, reduces pressure on your portfolio, and bridges the gap between survival (Tier 1) and thriving (Tier 3).

From the Sustainability Principle perspective, Tier 2 is where theory meets practice. This is the layer that:

• Converts portfolio assets into regular, reliable cash flow

• Protects against sequence-of-returns risk

• Provides inflation protection (through dividend growth and TIPS)

• Reduces forced selling during market downturns

• Creates the margin that enables generous, sustainable living

In the next article, we’ll explore Tier 3 Income—the variable sources, including portfolio withdrawals, part-time work, and strategic use of home equity, that provide growth, flexibility, and margin for the unexpected blessings and challenges retirement brings, completing our examination of how to build truly sustainable retirement income.

If you’ve followed this blog for any length of time, you know that I write about retirement from a particular angle. It’s not just about the numbers—though the numbers matter—but about the whole God-created-and-redeemed person from a distinctly Christian perspective. I cover the financial, the spiritual, the relational, and the eternal.

Retirement stewardship, as I’ve come to understand it, isn’t just about saving, investing, and making your money last. Those things are important, but it’s more fundamentally about making your life count for the Kingdom of God—stewarding everything: your time, talents, treasure, and testimony for your good, the good of others, and the glory of God.

The eternal dimension

You may have noticed that when I listed everything I “cover,” I included the eternal. What I mean is that by the time we reach our 60s, 70s, and 80s, we need to think more seriously about heaven and eternity. That’s not being morbid, it’s reality, and for the Christian, it’s our glorious hope: “…in hope of eternal life, which God, who never lies, promised before the ages began” (Titus 1:2).

The truth is, most of us spend the first half of our lives barely thinking about eternity, and the second half slowly realizing we probably should have thought about it sooner. Moses prayed, “Teach us to number our days, that we may gain a heart of wisdom” (Ps. 90:12, ESV), not to counsel us to despair but as a path to clarity. There is something clarifying about the later decades that no amount of financial planning can replicate: the growing awareness that this world, for all its goodness and wonder, is not our final home.

Paul captured that awareness perfectly: “For to me, to live is Christ and to die is gain” (Phil. 1:21, ESV). That posture doesn’t diminish the present; it redeems it. It loosens our grip on things that were always meant to be held loosely, shifts our attention toward what actually lasts, and frees us from spending energy on things that don’t ultimately matter. Paradoxically, the Christian who thinks most clearly about heaven is often the most fully alive in the present.

How this book came to be

These convictions are what eventually led me to write what will probably be my final book: Legacy Stewardship. No, I’m not going anywhere—at least not yet—I just don’t know what else I would write about.

For years, I’ve written extensively about the financial side of retirement: the accumulation and decumulation of assets, as well as budgeting, saving, investing, withdrawing, and planning. I’ve also written about living in retirement with a focus on stewardship of time, talents, and testimony. But I haven’t always connected the idea that, rightly understood, retirement isn’t a destination but a doorway, and that how we live it is our final, most visible act of stewardship before we step through it.

I know, none of us likes to think about that. But what if we did? We’d live better today, plan better for the inevitable, and face the end with joyful anticipation rather than dread, knowing that, as Paul said, “we would rather be away from the body and at home with the Lord” (2 Cor. 5:8), and that those who live by faith “desire a better country, that is, a heavenly one. Therefore God is not ashamed to be called their God, for he has prepared for them a city” (Heb. 11:16).

I’ve written extensively on this blog about what to do with what you’ve accumulated beyond just making it last. But I’ve only occasionally addressed other questions: How do I think about inheritance in a way that’s both generous and wise? How does the gospel shape the way I hold my possessions in these final decades? What kind of person am I becoming — and what kind of legacy am I actually leaving — as I grow older?

Those questions belong to a different category than withdrawal strategies and Medicare planning. They define the territory of legacy, and I decided they deserve their own book. Legacy Stewardship is both a logical sequel to Reimagine Retirement and Redeeming Retirement and a book that stands fully on its own.

Legacy is theological before it’s practical

The word stewardship is familiar to most believers. We apply it to our finances, time, and spiritual gifts. But rarely do we apply it to the final season of life itself, to stewarding our remaining years, relationships, estate, and ultimately our witness.

Scripture has much to say about finishing well. From the patriarchs of Genesis to the apostolic letters of the New Testament, the Bible consistently frames the end of life not as a retreat but as a culmination — a final, meaningful act of faithfulness. The last chapter is not a footnote. It is part of the story.

What this book is about

Legacy Stewardship is organized around a simple but important distinction: the difference between the legacy you leave and the legacy you live.

Most books about legacy focus on the leaving: the estate plan, the will, the inheritance, and the distribution of assets. That content is thoroughly covered in Part Three. But the book’s deeper argument is that by the time those documents come into play, your legacy will already be largely written in the memories, habits, and convictions of those who watched you live.

The book is divided into three parts:

Part One: The Theology of Legacy lays the biblical and theological foundation. What does Scripture say about legacy, inheritance, and stewardship? How does the gospel reshape our understanding of what we own and what we leave behind? These chapters establish the why before addressing the what.

Part Two: Living Your Legacy addresses the active, relational, and spiritual dimensions of legacy in the later years. How do you remain fruitful when physical capacity is diminishing? What does it mean to transmit wisdom and faith to the next generation? How does a well-lived later life become its own form of witness? Long-term care planning is here too, because deciding in advance how you want to be cared for — and relieving your family of impossible decisions made in crisis — is one of the most loving things you can do. It is stewardship. It is love.

Part Three: Leaving Your Legacy is the practical section—estate planning essentials, wills and trusts, inheritance decisions, beneficiary designations, Social Security survivor benefits, the ethics of how much to leave children, charitable giving strategies, and more. Comprehensive and written for ordinary readers, not legal professionals.

The book closes with an Epilogue — a meditation on the question I hope every reader carries with them: What will they say when you’re gone?

Who this book is for

Legacy Stewardship is for Christians who are on the “back nine” of life who are serious about finishing well, living and leaving in ways that bless others and honor the Lord. It is for the adult child trying to help an aging parent think through these things. It is for the pastor, financial planner, or eldercare professional looking for a resource grounded in biblical faith.

You don’t have to be wealthy to benefit from it. Some of the most important legacy questions have nothing to do with the size of your estate. You do need to be willing to think honestly about mortality, about what you own and why, and about the kind of person you’re becoming in these final decades.

If you’ve ever wondered:

• Am I handling my finances in a way that reflects what I actually believe about God?

• How much should I leave my children — and is that even the right question?

• What’s the difference between a will and a trust, and do I need one?

• How do I give generously without jeopardizing my own financial security?

• What kind of legacy am I actually leaving — and is it the one I intend?

Then this book was written for you.

A word about the approach

Consistent with everything I write, I approach Legacy Stewardship from a Reformed theological perspective, meaning I take the entire Bible —both Old and New Testaments —seriously, reading it as one unified story of creation, fall, redemption, and restoration—by, in, through, and for the glory of Jesus Christ.

He is the image of the invisible God, the firstborn of all creation. For by him all things were created, in heaven and on earth, visible and invisible, whether thrones or dominions or rulers or authorities—all things were created through him and for him. And he is before all things, and in him all things hold together. And he is the head of the body, the church. He is the beginning, the firstborn from the dead, that in everything he might be preeminent. For in him all the fullness of God was pleased to dwell, and through him to reconcile to himself all things, whether on earth or in heaven, making peace by the blood of his cross (Col. 1:15-20, ESV).

This framework shapes everything in the book, from how I interpret the inheritance passages in Proverbs to how I think about generosity, estate planning, and the eternal horizon that gives it all its meaning.

But the book is also intensely practical. After I retired from more than thirty years in IT financial services, I’ve been personally navigating the questions of retirement stewardship for nearly a decade, not just writing about them, but living them.

A word about what this book isn’t: I am not an attorney, and nothing here constitutes legal advice. I am not a licensed financial advisor, and nothing here should be taken as personalized financial counsel. What the book will give you is a biblical framework, conceptual clarity, and practical vocabulary for better conversations with the attorneys, financial advisors, and family members involved in your legacy planning.

Where to buy it

You can purchase the book in either the Kindle or paperback version on Amazon:

If you do buy it and find it helpful, I’d be genuinely grateful if you’d leave a review on Amazon. For independently published books, reader reviews make an enormous difference in helping others find them. And if you’d like to go deeper on any topic covered in the book, the RetirementStewardship.com blog has hundreds of articles that complement and expand on the material, many of which were the original source material for the chapters themselves.

Thank you for reading. And may God grant us all the grace to finish well.

In the previous article in this series, we explored retirement income and its three-tiered structure. We established that income is arguably the most critical component of the Sustainability Principle, which is the idea that your retirement will be financially sustainable when your reliable income sources can consistently cover your ongoing expenses and obligations throughout your lifetime, adjusted for inflation and accounting for major risks.

Now we dive deeper into the first and most important tier: Tier 1 Guaranteed Income. This is your sustainability foundation, the income floor that you cannot outlive, regardless of what happens in the markets or economy. This approach is characteristic of what is sometimes called a “safety-first” retirement income strategy.

As a reminder, retirement income consists of three tiers:

• Tier 1: Guaranteed Income (Social Security, pensions, annuities)

• Tier 2: Reliable Income (bonds, dividends, rental income)

• Tier 3: Variable Income (portfolio withdrawals, RMDs, part-time work)

In retirement, achieving sustainability isn’t primarily about growing your wealth; it’s about converting your current wealth into reliable income and then combining it with other income sources, such as Social Security, to create a sustainable income-generating system.

That’s the fundamental shift from accumulation to distribution, and it’s why understanding each income component—especially Tier 1—is critical to sustainable retirement.

Why Tier 1 Income Is Your Sustainability Foundation

This is the most important type of retirement income because it’s your income “floor”—income you can’t outlive, regardless of what happens in the markets or economy. From the Sustainability Principle perspective, Tier 1 income is the bedrock upon which all retirement sustainability is built.

Tier 1 income provides the foundation of financial security and sustainability in retirement because it’s not subject to market volatility, sequence-of-returns risk, or premature depletion. Once established, this income stream continues for life, creating a foundation you can build upon with confidence.

The larger your Tier 1 income relative to your expenses, the more sustainable your retirement becomes. This is the core insight of the Sustainability Principle: guaranteed income that covers your essential expenses creates true financial sustainability that market fluctuations cannot undermine.

Tier 1 Components

Social Security: The Cornerstone of Sustainable Retirement

Social Security forms the foundation of most Americans’ income structure, including that of individuals with substantial investment portfolios. Understanding how it works, when to claim it, and how it integrates with your other income sources is essential to building sustainable retirement and faithful stewardship.

Even for wealthier retirees with multimillion-dollar portfolios, Social Security serves as the bedrock of guaranteed income within a sustainable retirement framework. It offers four irreplaceable characteristics that no investment portfolio and virtually no other financial product can fully replicate:

It’s not “guaranteed” but more of a “promise” under current federal statutes. You are given some assurance, but not a lifetime guarantee, that your Social Security check will keep coming. Social Security is in some trouble, and it remains to be seen what the Congress does. But it is—and has been for decades—excellent protection against longevity risk and contributes in a significant way to sustainable lifetime income.

It’s inflation-adjusted annually. Through Cost-of-Living Adjustments (COLAs), your benefit maintains its purchasing power even as inflation erodes the value of fixed pension payments or bond interest. This inflation protection is essential for multi-decade sustainability.

It’s unaffected by market risk. While your investment portfolio fluctuates with market conditions, your Social Security benefit remains stable regardless of whether stocks are soaring or crashing. This stability is critical to retirement sustainability during market downturns.

It provides survivor protection. When one spouse dies, the surviving spouse continues to receive the higher of the two benefits, providing crucial income sustainability during an already difficult transition.

These features make Social Security the most critical building block for sustainable retirement—not necessarily the largest income source, but the most reliable and enduring foundation.

Understanding the Fundamentals

Before you can make informed claiming decisions that support long-term sustainability, you need to understand how the system works. Many retirees operate on outdated assumptions, misconceptions, or incomplete information, which can cost them tens of thousands of dollars over their lifetimes and undermine their retirement sustainability.

Social Security Mythology—Part One (Updated 2025) addresses the most common misconceptions about Social Security—myths about how benefits are calculated, what happens if you work while collecting, whether Congress can take away your benefits, and how the program is actually funded. Understanding the truth behind these myths helps you make sustainability-focused decisions based on facts rather than fear or misinformation.

Social Security Mythology (and Misunderstandings)—Part Two (New) continues debunking widespread myths, focusing on claiming strategies, spousal benefits, and taxation. This article clarifies the difference between what some people commonly believe and what the program and rules actually state, helping you avoid costly mistakes that could compromise your retirement sustainability.

What Your Social Security Benefits Are Really Worth (New) helps you understand the actual financial value of your Social Security benefit by comparing it to what you’d need to save and invest to generate equivalent guaranteed, inflation-adjusted lifetime income. Most people dramatically underestimate this value—a $30,000 annual benefit might be worth $750,000 or more in present value terms. This perspective helps you appreciate Social Security as the sustainability asset it truly is.

Is Social Security Going Broke? (New) addresses the anxiety many pre-retirees feel about the program’s long-term solvency. While Social Security faces funding challenges, understanding what those challenges mean—rather than the catastrophic scenarios often portrayed in the media—helps you plan realistically for sustainable retirement rather than make fear-based decisions. The article explains the mechanics of the trust fund, likely legislative fixes, and why benefits are unlikely to disappear.

Understanding and Navigating Social Security Survivor Benefits (Updated 2025) provides crucial information for widows, widowers, and married couples planning for the possibility that one spouse will die first. Survivor benefits follow complex rules that interact with your own retirement benefit, and making the wrong choice can permanently reduce your lifetime income and undermine the surviving spouse’s retirement sustainability. This article walks through the decision points and strategies for maximizing survivor benefits.

Your Claiming Decision: The Foundation of Sustainability

One of the most consequential financial decisions you’ll make for retirement sustainability is when to claim Social Security benefits. Unlike investment decisions that you can adjust over time, your claiming age creates permanent effects that last for decades and fundamentally shapes your retirement sustainability.

You can claim Social Security benefits at any point between age 62 and 70, but three key ages matter most:

Age 62 (Early Claiming): You can start receiving benefits as early as 62, but your monthly benefit will be permanently reduced by 25-30% compared to waiting until Full Retirement Age. This reduction lasts for life and affects survivor benefits as well—potentially undermining both your own and your spouse’s long-term sustainability.

Full Retirement Age (66-67): This is the age when you receive your full, unreduced benefit. It’s 66 for those born before 1955, gradually increasing to 67 for those born in 1960 or later. Claiming at this age means no reduction and no delayed retirement credits.

Age 70 (Maximum Benefits): For each year you delay claiming beyond Full Retirement Age, your benefit increases by approximately 8% per year until age 70. This guaranteed 8% annual return is among the best risk-free returns available and significantly strengthens your retirement sustainability foundation. There’s no benefit to delaying past 70.

This decision warrants careful thought, prayer, and, often, professional guidance. It’s not something to make on a whim based on what your neighbor did or what an article recommended as a one-size-fits-all solution. Your claiming decision will either strengthen or weaken your retirement sustainability for the rest of your life.

Why You Should Consider Delaying Collecting Social Security Benefits (Updated 2025) presents a comprehensive case for delayed claiming from a sustainability perspective, walking through the mathematics of the 8% annual increase, the insurance value of higher lifetime benefits, and the often-overlooked survivor benefit implications. The article also addresses common objections and helps you think through whether delaying makes sense for your specific situation and sustainability goals.

Social Security Claiming Strategies—Which Camp Are You In? (Updated 2025) recognizes that retirees fall into different “camps” based on their circumstances, health, resources, and priorities. Rather than prescribing a single strategy, this article helps you identify which camp you’re in and what claiming approach typically works best for people in similar situations seeking sustainable retirement. It provides a framework for making decisions that align with your circumstances rather than following generic advice.

How Your Claiming Decision Affects Retirement Sustainability

Social Security isn’t an isolated decision—it’s the foundation upon which your entire sustainable retirement income system is built. Your Social Security claiming strategy affects sustainability in multiple ways:

Current Wealth: Whether you tap your portfolio heavily in early retirement (if delaying Social Security) or preserve it longer (if claiming early). Delaying Social Security and drawing down portfolio assets early can actually enhance long-term sustainability by building a stronger guaranteed income floor.

Income Foundation: The guaranteed baseline that determines how much variable income you need from other sources and how sustainable your overall retirement income will be.

Tax Efficiency: How much of your Social Security becomes taxable based on your other income, and how your claiming decision affects lifetime tax liability and therefore your net sustainable income.

Essential Expenses Coverage: Whether your guaranteed Tier 1 income covers essential expenses (high sustainability) or whether you need to rely on portfolio withdrawals for basic needs (lower sustainability).

Generosity Capacity: How much margin you have for generous giving, both now and in later retirement, when other income sources may decline. Sustainable generosity requires sustainable income.

Healthcare Costs: How IRMAA surcharges might affect your Medicare premiums based on the income from your claiming decision, and whether rising healthcare costs will threaten your sustainability.

Sequence Risk Protection: How protected you are against poor early market returns if you don’t need to withdraw heavily from investments. A strong Social Security foundation dramatically reduces sequence risk and enhances sustainability.

Longevity Risk Management: Whether you’re building a strong enough guaranteed income foundation to support you if you live to 95 or 100. This is perhaps the most important sustainability consideration.

Understanding Social Security in this holistic way—as the foundational element of sustainable retirement rather than as an isolated benefit to claim at your convenience—is essential to responsible retirement stewardship.

The articles referenced in the previous section provide the necessary detail to make informed decisions. But the Sustainability Principle framework matters too: see Social Security as the cornerstone of Tier 1 guaranteed income, make claiming decisions that strengthen your sustainability foundation rather than weaken it, and recognize that this single choice will affect your financial security and stewardship capacity for the rest of your life.

Pensions: Strengthening Your Sustainability Floor

If you’re fortunate enough to have a traditional defined-benefit pension, this provides additional guaranteed lifetime income that strengthens your sustainability foundation. Some pensions include inflation adjustments (which significantly enhance long-term sustainability); many don’t.

No matter what your pension’s features are, you have some important decisions to make that will affect your retirement sustainability.

What to Do with Your Pension at Retirement (New) discusses the critical choice retirees face between receiving their pension as a guaranteed monthly income for life or as a lump sum to manage themselves. While lump-sum payments offer control and legacy options, monthly pension payments provide longevity protection, simplicity, and spousal security, which usually serve retirees better from both financial sustainability and stewardship perspectives. The article examines this decision through the lens of building sustainable retirement income.

From the Sustainability Principle perspective, preserving your pension as lifetime income typically strengthens your foundation more than taking a lump sum—unless you have compelling reasons related to health, legacy, or exceptional financial resources that would make the lump sum more valuable to your overall sustainability plan.

Annuities: Creating Additional Guaranteed Income

Annuities are financial products you can purchase that convert a lump sum into guaranteed lifetime income. They essentially create a private pension, strengthening your Tier 1 income and enhancing retirement sustainability. Immediate annuities start paying right away; deferred annuities begin at a future date.

There are also other, more costly and complex annuity “flavors” that most retirees don’t need and that often don’t add meaningfully to retirement sustainability while introducing unnecessary complexity and costs.

Should I Include Annuities in My Retirement Plan—Part 1 (Updated January 2026) examines immediate income annuities as a potential bond replacement strategy in retirement portfolios, finding that they can provide superior guaranteed lifetime income that enhances sustainability—especially in today’s higher interest rate environment where payout rates have increased from 5.83% (2019) to approximately 8.1% (2025) for a 73-year-old. However, the article identifies inflation risk as the most significant drawback of fixed annuities from a sustainability perspective, as purchasing power can erode significantly over 20-30 years.

Should I Include Annuities in My Retirement Plan—Part 2 (Updated January 2026) looks at fixed-index annuities (FIAs), which promise market participation with downside protection but deliver returns somewhere between CDs and stock market investments (typically 3-6% annually) due to caps, spreads, and the exclusion of dividends from index calculations. While FIAs have improved since 2019 with higher cap rates (now 10-11% vs. 5-6%), my conclusion is that they’re most suitable for people who don’t need liquidity for 5-10 years, want principal protection, and are comfortable with mid-single-digit returns—but cautions that complexity, embedded fees, and lack of guaranteed inflation protection remain significant concerns that keep me from recommending them for most people seeking sustainable retirement income.

Should I Include Annuities in My Retirement Plan—Part 3 (Updated January 2026) delves into variable annuities, which are complex hybrid products combining mutual fund investments with insurance features like guaranteed income riders and death benefits, but concludes they make little sense for most retirees seeking sustainable income due to their high costs (often 2-3% or more), complexity, performance limitations, and questionable value proposition—especially when purchased inside already tax-deferred IRAs. From a sustainability perspective, the high costs significantly erode the value proposition.

Should You Purchase an Indexed or Variable Annuity? (Updated January 2026) serves as a comprehensive buyer’s guide warning that indexed and variable annuities, while marketed as offering “guaranteed income with stock market returns and no risk,” are complex products with significant costs (fees can total 2-3% or more annually) that may not be suitable for most retirees seeking sustainable income. The article emphasizes the importance of understanding total costs including rider fees, sales commissions (which can be 7-10%), surrender charges, and insurance company solvency risk, and advises readers to read contracts thoroughly, choose advisors wisely, and consider whether a simple SPIA might better serve their sustainability needs before committing to these complicated products that many buyers later regret purchasing.

Why Am I Reluctant to Purchase a Lifetime Income Annuity? examines why, despite advice from financial experts, I remain hesitant to purchase a lifetime income annuity, with inflation being his primary concern. I did a detailed analysis comparing a nominal single premium immediate annuity (SPIA) paying 7.7%, a 3% COLA annuity paying 5.8%, a hypothetical CPI-adjusted annuity, and a 4% safe withdrawal rate (SWR) portfolio strategy, to demonstrate how inflation—particularly during high-inflation periods like the 1970s-80s—can dramatically erode the purchasing power of fixed annuity payments over a 20-30 year retirement. While acknowledging that annuities provide guaranteed lifetime income and eliminate longevity risk, I concluded that without true CPI-indexed annuities available, all options carry significant inflation risk, leaving me uncertain whether to purchase an annuity despite being in the “sweet spot” age range (early 70s) with historically attractive payout rates.

I’m Not as Reluctant Toward Annuities, But I’m Still Not Sure I Need One uses Monte Carlo simulation analysis to compare three retirement income strategies: a safe withdrawal rate (SWR) portfolio alone, a hybrid approach with a nominal immediate annuity, and a hybrid approach with a 3% COLA annuity. Running 10,000 simulations through age 95 with a 40/60 stock/bond allocation, I found surprisingly similar residual portfolio values across all three strategies (0.80x-1.80x at various percentiles), though the SWR-only strategy performed slightly better at the 50th and 80th percentiles. However, the COLA annuity hybrid strategy offered a critical advantage: guaranteed lifetime income that nearly doubles (1.97x) by age 95, providing insurance against portfolio failure despite requiring a 27% larger initial purchase. While the analysis suggests that my portfolio would likely survive to age 95 without an annuity (meeting the 80% success threshold), I uncertain about purchasing one, noting that nearly two years later I still haven’t acted despite improved 8.1% payout rates, continuing to weigh the trade-off between portfolio flexibility and the “income floor” security an annuity would provide.

Building Your Sustainability Foundation

Tier 1 income—your guaranteed, lifetime income floor—is the single most important element of retirement sustainability. It’s what allows you to sleep at night during market crashes, to maintain your standard of living regardless of economic conditions, and to live with confidence rather than constant anxiety about running out of money.

The strength of your Tier 1 foundation determines almost everything else about your retirement sustainability:

If your Tier 1 income covers 80-100% of your essential expenses, you have extraordinary sustainability. Market downturns become inconvenient rather than catastrophic. You can afford to maintain equity exposure for growth. You have genuine freedom to be generous. This is the ideal sustainability position—and it’s achievable through a combination of maximized Social Security (delaying to 70), pension income, and, if appropriate, strategic partial annuitization.

If your Tier 1 income covers 50-70% of your essential expenses, you have good sustainability with manageable portfolio dependence. You’ll need sustainable withdrawal strategies and appropriate cash reserves, but you’re not living on the edge. Most middle-class retirees fall into this category, and with wise planning, it provides adequate sustainability for 30+ years of retirement.

If your Tier 1 income covers less than 50% of your essential expenses, your sustainability is more fragile. You’re heavily dependent on portfolio performance and vulnerable to sequence-of-returns risk. This doesn’t mean sustainable retirement is impossible, but it does require more conservative withdrawal rates, larger cash buffers, greater spending flexibility, and, in some cases, consideration of strategies to strengthen your income floor—whether through delayed Social Security claiming, partial annuitization, or other approaches that enhance your sustainability foundation.

The articles referenced throughout this piece provide the detailed analysis you need to make informed decisions about each Tier 1 component. But here’s the Sustainability Principle framework to guide those decisions:

1. Maximize Social Security First

For most people, delaying Social Security to age 70 (at least for the higher earner in a married couple) is the single best decision you can make to strengthen retirement sustainability. It creates guaranteed, inflation-adjusted, survivor-protected lifetime income at a guaranteed 8% annual increase. No investment or annuity can replicate all those features.

From the Sustainability Principle perspective, maximizing Social Security strengthens your foundation in ways that no portfolio strategy can match. Every dollar of increased Social Security benefit is a dollar of sustainable, inflation-adjusted, guaranteed lifetime income that you can never outlive.

2. Preserve Pensions as Lifetime Income When Possible

The temptation to take lump sums is understandable—you want control, flexibility, and the ability to leave assets to heirs. But for most retirees, the guaranteed monthly income provides more sustainability value than the lump sum, especially when you account for longevity risk and the difficulty of self-managing longevity insurance.

From a sustainability perspective, pension income strengthens your Tier 1 foundation and reduces your dependence on portfolio withdrawals, thereby enhancing the overall sustainability of your retirement plan. Unless you have compelling reasons (poor health, exceptional wealth, specific legacy goals), preserving the pension as lifetime income typically serves sustainability better.

3. Consider Annuities Strategically, Not Reflexively

Annuities can serve a valuable purpose in building sustainable retirement income—specifically, filling gaps in your income floor that Social Security and pensions don’t cover. But they’re not suitable for everyone, and the more complex varieties (indexed and variable annuities) are rarely worth their costs and complications from a sustainability perspective.

If you’re going to annuitize to strengthen your sustainability foundation, simple immediate annuities (SPIAs) usually serve retirees better than the heavily marketed alternatives. They provide straightforward guaranteed lifetime income without the complexity, high costs, and questionable features of more exotic annuity products.

The key question from the Sustainability Principle perspective is: Does this annuity meaningfully strengthen my guaranteed income floor relative to its cost and the loss of flexibility? If yes, it may enhance sustainability. If not, you’re likely better off maintaining investment portfolio flexibility.

4. Build the Foundation Before Worrying About the Upper Floors

Many retirees expend significant effort optimizing their investment portfolios (Tier 2 and 3 income) while making suboptimal decisions about their Tier 1 foundation. This is backwards from a sustainability perspective.

Get the foundation right first. Maximize Social Security, preserve pension income, and understand your guaranteed income floor. Only then does it make sense to focus heavily on portfolio optimization. A strong Tier 1 foundation creates the sustainability that allows you to take appropriate risks with Tier 2 and 3 income sources.

Think of it this way: Tier 1 is your sustainability foundation. Tier 2 adds stability. Tier 3 provides flexibility. You can’t build a stable structure without a strong foundation. Similarly, you can’t achieve sustainable retirement without adequate Tier 1 guaranteed income.

A Stewardship Perspective on Guaranteed Income

How should Christians think about Tier 1 income and building a sustainable retirement foundation?

First, understand that guaranteed income is a gift, not an entitlement. Social Security and pensions are mechanisms through which God provides for His people in old age. They’re not rights we’ve earned, but provisions to be received with gratitude and managed with wisdom.

Second, recognize that building a strong income foundation isn’t about hoarding or self-sufficiency—it’s about responsible stewardship. By maximizing your guaranteed income, you’re creating the sustainability that allows you to remain generous, avoid becoming a burden to others, and maintain your capacity for service throughout retirement.

“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.” (Proverbs 21:5, ESV)

Third, remember that even the strongest guaranteed income ultimately rests on God’s provision. Social Security depends on the continued functioning of government systems. Pensions rely on corporate or public entity solvency. Annuities require insurance company stability. None of these are absolutely guaranteed—only God’s provision is.

“And my God will supply every need of yours according to his riches in glory in Christ Jesus.” (Philippians 4:19, ESV)

Fourth, understand that sustainable retirement isn’t primarily for your own comfort—it’s about faithful stewardship that enables continued service and generosity. A strong income foundation frees you from financial anxiety so you can focus on kingdom purposes rather than constant worry about money.

Finally, recognize that sustainability decisions often involve trade-offs between present and future, between control and security, between legacy and lifetime income. These aren’t merely financial decisions—they’re stewardship choices that require wisdom, prayer, and sometimes godly counsel.

Moving Forward: Building on Your Foundation

Tier 1 guaranteed income is the bedrock of the Sustainability Principle. It’s the foundation upon which everything else in retirement rests. Get this right, and the rest of retirement planning becomes dramatically easier. Get it wrong, and no amount of investment sophistication can fully compensate.

In the next articles in this Sustainability Principle series, we’ll explore:

• Tier 2 Income: The reliable income sources that add stability to your sustainability foundation

• Tier 3 Income: Managing portfolio withdrawals and variable income sustainably

• Expenses: Understanding and managing your retirement spending

• Taxes: Strategies for minimizing the tax burden on your sustainable income

• Healthcare Costs: Planning for one of retirement’s most significant and unpredictable expenses

Each component interacts with your Tier 1 foundation to create the complete picture of sustainable retirement.

But for now, focus on the foundation. Understand your Social Security options and make claiming decisions that strengthen rather than weaken your sustainability. Evaluate your pension choices through the lens of guaranteed lifetime income. Consider whether strategic annuitization could fill critical gaps in your income floor.

Remember: Retirement income planning is ultimately about stewardship—managing the resources God has entrusted to you in a way that provides for your needs, protects your spouse, maintains your capacity for generosity, and honors the principle that we’re managers, not owners, of everything we have.

Build your sustainability foundation wisely, and you’ll create the security and margin that enables faithful stewardship throughout all your retirement years.

I remember when I received my last paycheck from my employer in 2018, I felt an odd mix of emotions. I was excited about what was to come (I was going to finish my first book and do lots of other things I didn’t have time for when I was working), but I also sensed the subtle concern that I now have to create my own paycheck and make sure I don’t “blow it.”

For almost 50 years, since I was 15, my income has been simple: I worked and was paid. Sure, the amount varied somewhat over the years as I changed jobs and advanced in my career, but the basics were the same: my labor produced income. Your life has probably been very similar.

Now that mechanism was gone. I had some savings and investments, and also had Social Security coming. But I didn’t have a paycheck. And somehow, I had to convert all those resources into a reliable income stream that would last for what could easily be 25-30 years.

And that’s the thing. Retirement changes nearly everything about how income works in your financial life.

Where Income Fits in the Sustainability Principle

In the first article of this series, I introduced the Sustainability Principle—the fundamental concept that your retirement will be financially sustainable when your reliable income sources can consistently cover your ongoing expenses and obligations throughout your lifetime, adjusted for inflation and accounting for major risks.

At its core, the Sustainability Principle can be expressed as a simple relationship:

Sustainable Retirement = Reliable Income ≥ Ongoing Expenses (over time, adjusted for inflation and risk)

In previous articles, we examined current wealth and how to build wealth over a working lifetime. Wealth (net worth) now becomes the fuel for part of your income engine, the most critical component of retirement sustainability. Without adequate, reliable income, even substantial current wealth can prove insufficient. Conversely, strong guaranteed income sources can provide sustainability even with modest savings.

The Sustainability Principle Framework helps us understand that income isn’t just about the total amount—it’s about reliability, sustainability over decades, coordination with other income sources, tax efficiency, and flexibility to adapt when circumstances change.

During your working years, income was the primary driver of pretty much everything else. It was predictable, usually arriving weekly or biweekly (for salaried employees, more sporadically otherwise). No matter what, it was directly tied to your labor. It grew with your skills, experience, and career advancement. Income was straightforward.

But in retirement, the income equation transforms. It’s more passive, more diverse, potentially more fragile, and often more complex. It changes from a relatively simple mechanism into an integrated system—although you can structure your system to provide a regular “paycheck” if that’s what you need.

Understanding the income component—what it is, how it functions, and how to manage it wisely—is essential to achieving sustainable retirement and faithful stewardship.

The Four Paths of Retirement (Updated 2026) notes that not all retirees approach retirement income the same way—in fact, research identifies four distinct paths retirees follow based on their attitudes, circumstances, and financial preparation. Purposeful Pathfinders (23%) lead active, engaged lives focused on ongoing growth and service, rating themselves happiest and most fulfilled. Relaxed Traditionalists (26%) emphasize leisure and enjoyment, finding satisfaction but slightly less fulfillment than Pathfinders. Challenged Yet Hopeful (20%) have the heart and aspirations of Pathfinders but face financial constraints requiring extra income or spending reductions. Regretful Strugglers (31%) face insufficient income with little hope of improvement, often struggling to find purpose and rating themselves least happy with many regrets. The path you take isn’t determined solely by your account balance—your sense of purpose, willingness to make hard financial decisions, active faith in God’s provision, and commitment to stewardship principles all shape whether your retirement becomes a season of purposeful service or anxious regret, regardless of your income level.

My Thoughts on the Guru Gap suggests that before building your retirement income strategy, you need to understand the fundamental divide in how financial experts approach this challenge—what’s often called “the guru gap.” On one side, the probability-based approach favors diversified portfolios of stocks and bonds, emphasizing growth potential, liquidity, low costs, and flexibility through systematic withdrawals (typically 4% or less annually). On the other side, the safety-first approach leans toward insurance products like annuities and cash-value life insurance, prioritizing guaranteed income, longevity protection, and reduced market exposure even if that means higher fees and less liquidity. Popular advisors like Dave Ramsey and Suze Orman generally champion the probability-based camp, while academics like Wade Pfau and advisors like David McKnight advocate safety-first strategies, creating intense debates that sometimes generate more heat than light. The truth is this isn’t an either/or decision—a balanced approach often works best, using guaranteed income products like annuities to establish an “income floor” that covers essential expenses (similar to Social Security and pensions), while maintaining a diversified portfolio of stocks and bonds for growth, flexibility, and discretionary spending. Understanding both schools of thought helps you make informed decisions about which income strategies align with your specific situation, risk tolerance, and stewardship goals rather than blindly following any single guru’s advice.

Note: There are many more articles on the blog that pertain to retirement income. You’ll see them referenced in future article about the various types of income sources structured around three tiers. But for now, we’ll look at the three tiers from a 50,000 foot view and then drill down in those future articles to get into some of the details in this series on Sustainability.

Three Tiers of Retirement Income

Most retirees have income that fits into a three-tiered structure. Understanding this helps you see how your income is constructed and where you have flexibility, albeit with varying degrees of risk versus certainty. From the Sustainability Principle perspective, these tiers provide different levels of reliability. We’ll delve deeper into each of these in future articles.

Tier 1: Guaranteed Income (Your Sustainability Foundation)

This is your “floor”—income you cannot outlive, regardless of what happens in the markets or economy. This tier provides the bedrock of retirement sustainability.

Social Security: For most retirees, it is the most critical source of income. It’s inflation-adjusted through cost-of-living adjustments (COLAs). It’s guaranteed by the federal government. It continues for life, and often provides survivor benefits for a spouse.

Choosing when to claim Social Security isn’t just a financial optimization problem—it’s a sustainability and stewardship decision with profound implications.

It affects your lifetime income security and your ability to live without financial anxiety in your 80s and 90s. It affects how much you can give to your church and to those in need, both now and in the coming decades. It determines the financial security of a surviving spouse who may live many years after you’re gone. It shapes the pressure you apply to your investment portfolio and the sustainability of your withdrawal strategy.

This decision warrants careful thought, prayer, and, often, professional guidance. It’s not something to make on a whim based on what your neighbor did or what an article recommended as a one-size-fits-all solution.

Traditional Pensions: If you’re fortunate enough to have a traditional defined-benefit pension, this provides additional guaranteed lifetime income. Some pensions include inflation adjustments; many don’t. Either way, you have some important decisions to make about payout options and survivor benefits.

Lifetime Annuities: These are financial products you can purchase that convert a lump sum into guaranteed lifetime income. They essentially create a private pension. Immediate annuities start paying right away; deferred annuities begin at a future date. There are also other, more costly and complex “flavors” of annuities that most retirees don’t need.

Why Tier 1 Matters for Sustainability: This is the income you can absolutely count on. It doesn’t depend on market performance (unless it’s a type of annuity product tied to the market). It won’t run out. It provides the foundation of financial sustainability in retirement. The larger your Tier 1 income relative to your expenses, the less you need to worry about market crashes, sequence risk, or outliving your money.

Many financial planners suggest that you want Tier 1 income to cover at least your essential expenses—housing, utilities, food, healthcare, and insurance. If your guaranteed income covers your basic needs, achieving sustainable retirement becomes dramatically easier. This is the cornerstone of the Sustainability Principle in action.

Tier 2: Reliable Income (Your Stability Layer)

This tier isn’t guaranteed for life, but it’s reasonably stable and predictable, adding another layer of sustainability:

Bond Interest: If you hold individual bonds or bond funds, they generate regular interest payments. Investment-grade bonds are quite reliable, though not without risk.

Fixed-Income Funds: Bond funds, stable value funds, and similar investments provide fairly consistent income through interest payments.

Dividend Income: Quality dividend-paying stocks often yield steady payouts. These can be cut during recessions, but established dividend payers are generally reliable.

Real Estate Income: Rental properties or REITs can generate regular income, though they come with management requirements and some risk.

CD Ladders: Certificates of deposit provide guaranteed interest for their term, though rates vary.

TIPS (Treasury Inflation-Protected Securities): These provide inflation-adjusted interest, combining stability with inflation protection.

Why Tier 2 Matters for Sustainability: This layer provides additional reliable income beyond your guaranteed floor. While not as secure as Tier 1, it’s much more stable than pure market-based withdrawals (Tier 3). If they have sufficient guaranteed income to cover necessities, many retirees use Tier 2 income to cover discretionary expenses (lifestyle spending beyond the bare essentials).

The combination of Tier 1 and Tier 2 income creates a strong foundation for sustainable retirement. When these two tiers together cover most or all of your regular expenses, you’ve achieved a high level of financial sustainability with reduced vulnerability to market volatility.

Tier 3: Variable Income (Your Flexibility Layer)

This is income that you must actively manage and that can fluctuate significantly. While it adds flexibility to your retirement, it also introduces the most uncertainty from a sustainability perspective:

Portfolio Withdrawals: Taking money from your investment accounts, whether from principal or gains. This is the most flexible source but also the most complex to manage sustainably.

Required Minimum Distributions (RMDs): Starting at age 73 or 75 (depending on your birth year), you must take distributions from traditional IRAs and 401(k)s. These are taxable, and the amounts vary based on your account balance and age.

Roth Distributions: Withdrawals from Roth IRAs are tax-free and not subject to RMDs during your lifetime, making them valuable for tax management and flexibility.

Part-Time Earnings: Some retirees work part-time, consulting, or run small businesses. This income is fully taxable and can affect Social Security benefits if claimed before full retirement age.

Asset Sales: Selling investments, downsizing your home, or liquidating other assets to generate needed cash.

Why Tier 3 Matters for Sustainability: This is where you have the most control, the most complexity, and the most significant risk to long-term sustainability. How much you withdraw, from which accounts, in what sequence, and at what times profoundly affects your tax situation, how long your money lasts, and your financial flexibility.

From the Sustainability Principle perspective, the more you depend on Tier 3 income to cover essential expenses, the more vulnerable your retirement plan becomes to sequence-of-returns risk, market volatility, and withdrawal rate miscalculations. This tier requires ongoing management and wisdom.

The Sustainability Test: Can Your Income Support Your Retirement?

The Sustainability Principle provides a framework for evaluating whether your income can truly support a sustainable retirement. Here’s how to think about it:

High Sustainability Profile:

• Tier 1 guaranteed income covers all essential expenses

• Tier 2 reliable income covers most discretionary expenses

• Tier 3 withdrawals are modest and primarily for extras, generosity, or unexpected needs

• Result: Low vulnerability to market crashes, high confidence in 30+ year sustainability

Moderate Sustainability Profile:

• Tier 1 guaranteed income covers 60-80% of total expenses

• Combination of Tier 1 and Tier 2 covers all essential expenses plus some discretionary

• Tier 3 withdrawals supplement for lifestyle preferences

• Result: Reasonable sustainability with moderate market exposure

Lower Sustainability Profile:

• Tier 1 guaranteed income covers less than 50% of expenses

• Heavy reliance on Tier 3 portfolio withdrawals for both essential and discretionary expenses

• Result: Higher vulnerability to sequence risk, market downturns, and withdrawal rate errors

Concerning Sustainability Profile:

• Minimal guaranteed income (Social Security only at lower benefit levels)

• Modest savings requiring aggressive withdrawal rates (5%+ annually)

• Limited margin for unexpected expenses or market downturns

• Result: Significant sustainability concerns, potential for running out of money

Understanding where you fall on this spectrum helps you assess your true retirement sustainability and identify areas that need strengthening.

How Income Interacts with Other Sustainability Factors

Income doesn’t exist in isolation within the Sustainability Principle. It’s deeply interconnected with every other component. Understanding these interactions is crucial to achieving true financial sustainability.

Income and Expenses: The Core Relationship

This relationship is the heart of the Sustainability Principle:

Income must exceed expenses. This is fundamental. I like to use the expression I > E. If your regular expenses consistently exceed your income, you’re depleting your capital. That’s sustainable for a while, but may not be for 30 years unless you have substantial savings.

But expenses aren’t fixed. You have more control over expenses than you might think. Many retirees adjust spending based on market conditions, reducing withdrawals in down years and spending more freely when portfolios are up. This flexibility itself enhances sustainability.

Income flexibility provides security. If you have multiple income sources you can tap, you have options when expenses spike—medical emergencies, home repairs, and family needs. This flexibility is itself a form of financial sustainability.

The goal isn’t maximum income. Some retirees could generate more income than they’re currently taking, but choose not to because they don’t need it and want to minimize taxes or preserve assets for later needs or a legacy. This is wise stewardship: taking what you need, not what you can get.

Income and Taxes

The relationship between income and taxes affects net sustainability:

Income triggers taxes: Most retirement income is taxable to some degree. Traditional IRA withdrawals, pension income, interest, dividends, and capital gains all create tax liability. Even Social Security can become partially taxable based on your other income.

But the type of income matters: Roth IRA withdrawals are tax-free. Municipal bond interest is federally tax-free. Qualified dividends are taxed at lower capital gains rates. The composition of your income affects your total tax burden and therefore your net sustainable income.

Strategic income management reduces taxes: By carefully orchestrating which income sources you tap and when, you can significantly reduce lifetime taxes, thereby increasing your net sustainable income. For example, filling up lower tax brackets with Roth conversions before RMDs begin, or using QCDs (Qualified Charitable Distributions) to satisfy RMDs without increasing taxable income.

Social Security taxation creates complexity: The more other income you have, the more of your Social Security becomes taxable (up to 85%). This creates a “tax torpedo” effect, whereby additional income can be taxed at rates higher than the nominal bracket, reducing your effective sustainable income.

The key insight: Income planning and tax planning must be integrated to achieve optimal retirement sustainability.

Income and Longevity Risk

This is perhaps the most important interaction for understanding sustainability:

Tier 1 income protects against longevity risk. If you live to 95 or 100, your Social Security and pension will still be paying. This is invaluable insurance against outliving your money—the ultimate sustainability failure.

Tier 3 income is subject to longevity risk. The longer you live, the more years you must fund through portfolio withdrawals. If you withdraw too much too early, you might run out. If you withdraw too little out of fear, you might unnecessarily restrict your lifestyle or ability to be generous.

The balance matters for sustainability. Retirees with high Tier 1 income relative to expenses have stronger long-term sustainability because their essential needs are covered regardless of how long they live. Those relying heavily on portfolio withdrawals must be more conservative and more vigilant about withdrawal rates.

Strategic decisions affect sustainability. Delaying Social Security increases your Tier 1 income, thereby strengthening your sustainability foundation. Purchasing an income annuity converts Tier 3 assets into Tier 1 income, trading flexibility for enhanced sustainability. These are trade-offs worth carefully considering through the lens of long-term sustainability.

Income and Sequence Risk

This is a unique retirement risk that directly threatens sustainability:

Sequence risk threatens early-retirement sustainability. If you experience poor market returns early in retirement while also taking withdrawals, your portfolio might never recover, even if long-term average returns are fine. This can break the sustainability of your retirement plan.

Income strategy affects sequence risk. Having cash reserves or a stable Tier 2 income means you don’t have to sell stocks in a down market to meet your spending needs. This is one of the most important protections for maintaining sustainable withdrawals.

The tiered income approach protects sustainability. If Tiers 1 and 2 cover most of your expenses, you can be more patient with Tier 3 withdrawals during market downturns. This flexibility is enormously valuable for long-term sustainability.

Income and Healthcare Costs

Healthcare is such a significant expense that it deserves special attention in sustainability planning:

Medicare premiums are income-based. If your Modified Adjusted Gross Income (MAGI) exceeds certain thresholds, you pay higher Medicare Part B and Part D premiums (called IRMAA surcharges). Managing income to avoid or minimize these surcharges enhances net sustainable income.

Healthcare costs often rise with age. Your income strategy needs to account for increasing medical expenses in your 70s, 80s, and beyond. Having income that grows or can be increased is valuable for maintaining sustainability as healthcare costs accelerate.

Long-term care might require income acceleration. If you or your spouse requires extended care, you may need to substantially increase investment income to cover the costs. Having this capacity affects whether your retirement remains financially sustainable during a health crisis.

Income and Generosity

This is where faithful stewardship becomes most visible within sustainable retirement:

Stable income enables consistent giving. When you know what income you can count on, you can make commitments to your church and ministries with confidence, integrating generosity into your sustainable retirement plan.

Strategic income management enhances generosity. Using QCDs from your IRA after age 70½ allows you to give to charity while reducing your taxable income. Donating appreciated stock from taxable accounts avoids capital gains while providing a deduction. These strategies let you give more effectively while maintaining your own sustainability.

Income margin creates generosity capacity. If your income exceeds your needs, you have a margin for spontaneous generosity to help family, respond to needs, and support kingdom work beyond your regular giving. This is sustainable generosity.

But generosity isn’t just about excess. Even when income is tight, generous retirees find ways to give. This is faith in action, trusting God’s provision while prioritizing kingdom purposes—and often discovering that generous living itself contributes to contentment and life satisfaction, which are non-financial dimensions of sustainable retirement.

Can You Retire? Applying the Sustainability Principle to Income

The Sustainability Principle isn’t just a theoretical framework. It’s a practical diagnostic tool for answering the question that eventually confronts everyone who’s been saving and planning: “Can I actually afford to retire?”

This deceptively simple question requires evaluating whether your anticipated income sources can reliably support your expected expenses and obligations for as long as you might live, while accounting for the risks and uncertainties inherent in retirement—inflation, market volatility, longevity, unexpected health events, and more.

From the Sustainability Principle perspective, evaluating retirement readiness means asking:

1. How much of my income is guaranteed (Tier 1)? The higher this percentage relative to your essential expenses, the more sustainable your retirement.

2. What’s my total anticipated income from all three tiers? Does it comfortably exceed your expected expenses with a margin for inflation and unexpected costs?

3. How vulnerable am I to market risk? If you’re heavily dependent on Tier 3 portfolio withdrawals, what’s your withdrawal rate? Is it sustainable over 30+ years?

4. Have I accounted for all major expenses? Including healthcare cost inflation, potential long-term care needs, housing maintenance, and helping family members?

5. What’s my margin for error? Do you have flexibility to reduce expenses if needed? Can you delay retirement if markets are poor? Do you have reserves for emergencies?

6. How does longevity affect my plan? If you live to 95 or 100, will your income still be adequate? What’s your plan for the potentially very expensive final years?

A systematic process for evaluating your retirement income sustainability and determining not only whether you can retire, but when and how to do so wisely, requires examining each of these questions carefully and honestly.

Building a Sustainable Retirement Income System

Given the complexity and the high stakes, what does wise, God-honoring, sustainable income management actually look like in retirement?

1. Build a Strong Guaranteed Income Foundation

The priority is maximizing your Tier 1 guaranteed income, which provides the bedrock of retirement sustainability. For most people, this primarily means making strategic decisions about Social Security claiming. If you’re healthy and have other resources to live on, delaying your claim to age 70 can significantly increase your lifetime benefit and strengthen your sustainability foundation.

For married couples, coordinating your claiming strategies becomes even more important for long-term household sustainability. You need to understand how your decisions interact and what happens to survivor benefits when one spouse dies.

If you have access to a traditional pension, choose your payout options thoughtfully, weighing the security of a joint-and-survivor option against the higher payment of a single-life option. Some retirees also consider purchasing an immediate annuity to supplement Social Security benefits, thereby providing additional guaranteed lifetime income.

The stronger your Tier 1 foundation, the less you need to worry about market volatility and longevity risk. When your guaranteed income covers your essential expenses, you’ve achieved the core requirement of the Sustainability Principle.

2. Create a Sustainable Withdrawal Strategy

For Tier 3 income from your investment portfolio, you need a withdrawal strategy that balances current needs with long-term sustainability. Many retirees use the 4% rule as a starting point, withdrawing 4% of their initial portfolio value in the first year and adjusting that amount for inflation in subsequent years. This provides a reasonable probability of sustainability over 30 years.

Others prefer dynamic strategies that adjust withdrawals based on portfolio performance, taking more when markets are up and tightening when they’re down. Some use guardrails that set upper and lower bounds on annual withdrawals, allowing flexibility within sustainable parameters.

Whatever approach you choose, the key is being willing to adjust based on experience rather than rigidly sticking to a plan that isn’t working. Your withdrawal strategy should serve your sustainability goals, not enslave you to a formula.

3. Sequence Your Accounts Tax-Efficiently

The order in which you tap different accounts can have enormous implications for your net sustainable income over a 30-year retirement. The typical sequence is to withdraw from taxable accounts first, then from tax-deferred accounts such as traditional IRAs and 401(k)s, and finally from Roth accounts. This approach preserves tax-free growth in your Roth as long as possible while managing current tax liability.

But this conventional wisdom isn’t always optimal for maximizing sustainable after-tax income. Sometimes it makes more sense to mix account types strategically to manage your tax brackets year by year. You might do Roth conversions in early retirement before RMDs begin, moving money from tax-deferred to tax-free status while you’re in lower brackets.

Or you might use Roth withdrawals strategically to avoid triggering taxation of your Social Security benefits, or to stay under the IRMAA thresholds that would increase your Medicare premiums. Tax-efficient sequencing requires ongoing attention, but it can significantly enhance your sustainable net income over the course of your retirement.

4. Maintain Liquidity and Flexibility

As you build your sustainable income system, resist the temptation to commit everything to illiquid investments. Keep one to two years of expenses in cash or near-cash equivalents—money market funds, short-term CDs, or high-yield savings accounts. Maintain access to your taxable investment accounts for unexpected needs.

While annuities can provide valuable guaranteed income that strengthens sustainability, don’t annuitize so much of your portfolio that you lose all flexibility to respond to changing circumstances. Balance is key.

Liquidity isn’t just about having money available; it’s about having options. It provides peace of mind when medical emergencies arise, when family needs help, when opportunities for generosity appear, or when you want to make a significant purchase without disrupting your entire financial plan. That flexibility itself contributes to sustainable retirement.

5. Coordinate Income with Your Spouse

If you’re married, your income planning for sustainability cannot be done in isolation. You need to consider how your Social Security claiming strategies interact for maximum household sustainability. What happens to your household income when the first spouse dies—will the survivor’s income be sufficient to maintain a sustainable lifestyle?

How do you coordinate withdrawals across accounts that are owned jointly versus individually? What income sources will continue for the surviving spouse, and which ones will cease?

Many couples find that optimizing for joint lifetime sustainability requires different strategies than optimizing for a single person. The lower-earning spouse might claim Social Security earlier, while the higher-earning spouse delays to maximize the survivor benefit. These decisions are complex, but they matter significantly for the long-term sustainability and financial security of the surviving spouse.

6. Plan for Rising Healthcare Costs

One of the most predictable threats to retirement sustainability is that healthcare costs will increase, and they’ll increase faster than general inflation. Budget generously for Medicare premiums, supplemental insurance, and out-of-pocket expenses. Consider whether long-term care insurance makes sense for your situation, or set aside specific assets earmarked for potential LTC needs.

Understand how your income affects Medicare IRMAA surcharges—crossing certain income thresholds can add thousands of dollars annually to your Medicare premiums, reducing your net sustainable income. Plan for increased medical expenses as you move through your 70s and into your 80s, when healthcare typically becomes a larger percentage of your total spending.

Healthcare is often the wild card that can break retirement sustainability. The costs are high, somewhat unpredictable, and tend to accelerate with age. Don’t underestimate this category or assume your expenses will remain static.

7. Make Generosity a Priority

Faithful stewardship within sustainable retirement means integrating giving into your plan from the beginning, rather than treating it as something you’ll do with whatever is left over. Establish a baseline by committing to your church and the ministries you support—this becomes part of your regular “expenses” in the sustainability equation.

Learn to use tax-efficient giving strategies that enhance your net sustainable income—Qualified Charitable Distributions from your IRA after age 70½, donating appreciated stock from taxable accounts, or establishing a donor-advised fund. These strategies let you give more effectively while maintaining your own financial sustainability.

Maintain a budget margin specifically for spontaneous generosity, so you can respond when needs arise or opportunities appear. If your income exceeds your needs, consider increasing your giving rather than just increasing your lifestyle.

Generous living isn’t what you do with financial leftovers—it’s a priority that shapes how you structure your entire sustainable income system. It’s part of what it means to be a faithful steward of God’s resources.

8. Review and Adjust Regularly

Finally, understand that building sustainable retirement income is not a one-time event but an ongoing process. Review your income and expenses at least annually, comparing your experience against your projections and sustainability targets. Adjust your withdrawal rate based on portfolio performance—taking more when you can afford to, pulling back when markets are down.

Reconsider your strategies when tax laws change or when your personal circumstances shift. Modify your approach as you move through different stages of retirement, from the active “go-go” years to the slower “slow-go” years and eventually to the “no-go” years when health limits activity.

Be willing to course-correct when something isn’t working or when your sustainability appears threatened. Maybe your withdrawal rate is proving too aggressive and needs to be reduced to maintain long-term sustainability. Perhaps you have more income than you need and should increase your giving. Maybe your tax situation has changed and requires a different account sequencing strategy.

Flexibility and ongoing attention are essential to maintaining truly sustainable retirement income over decades.

A Biblical Perspective on Sustainable Income

How should Christians think about the whole enterprise of creating sustainable retirement income?

First, remember that God is your ultimate provider. Your income streams—Social Security, investments, pensions—are all instruments of His provision. He owns it all. You’re managing His resources, not building your own independent empire. True sustainability ultimately rests in Him, not in your financial systems.

“And my God will supply every need of yours according to his riches in glory in Christ Jesus.” (Philippians 4:19, ESV)

Second, understand that faithful stewardship requires wisdom and effort. God provides, but He expects us to manage wisely what He’s given. Being passive or careless with retirement income isn’t trust—it’s presumption. Planning for sustainable income is an act of stewardship, not an expression of distrust in God’s provision.

“The plans of the diligent lead surely to abundance, but everyone who is hasty comes only to poverty.” (Proverbs 21:5, ESV)

Third, recognize that income is a means, not an end. You’re not trying to maximize income for its own sake. You’re creating a sustainable income that allows you to:

• Live with dignity and reasonable comfort

• Serve God and others effectively

• Give generously to kingdom purposes

• Finish well without becoming a burden

Fourth, maintain contentment regardless of income level. Some retirees will have abundant income; others will be more constrained. Either way, contentment comes from trusting God, not from having more. Sustainable retirement isn’t primarily about the size of your income—it’s about the alignment of your income with your needs and your faithful stewardship of whatever you have.

“But godliness with contentment is great gain, for we brought nothing into the world, and we cannot take anything out of the world. But if we have food and clothing, with these we will be content.” (1 Timothy 6:6-8, ESV)

Finally, remember that this income is temporary. Even if it sustains you for 30 years, that’s nothing compared to eternity. Use it wisely for purposes that will last beyond this life.

“Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also.” (Matthew 6:19-21, ESV)

Moving Forward

Retirement income is one of the most critical components of the Sustainability Principle. It’s multifaceted, interconnected with every other financial decision you make, and crucial to your long-term security and stewardship capacity. But it’s not overwhelming if you approach it systematically through the lens of sustainability.

In the articles that follow in this Sustainability Principle series, we’ll continue examining the other components that contribute to sustainable retirement:

• Expenses and how to manage them wisely

• Taxes and strategies for minimizing your burden

• Healthcare costs and planning for the unexpected

• Giving and generous living within sustainable parameters

• And more

The goal is to help you build a retirement that is truly sustainable—financially sound, spiritually faithful, and honoring to God throughout all your remaining years.

With God’s wisdom, careful planning, and faithful stewardship, you can create an income system that provides for your needs, enables your generosity, and supports a sustainable retirement that glorifies God.

Before we delve into ways to generate sustainable retirement income, we need to discuss how to determine how much you need to save to retire with dignity and self-sustainability. How do you calculate this for your specific situation? What can you do now if it appears you’re behind?

This article will help you understand the challenges you face, calculate a realistic retirement income target, assess your current trajectory, and implement practical catch-up strategies, whether you have 10 to 15 years until retirement or you’re already there.

Understanding the headwinds

Before we calculate what you need, let’s acknowledge the real challenges retirees face. These aren’t meant to frighten you but to help you plan realistically.

The longevity challenge

We’re living longer than ever before. According to Social Security Administration data, a 65-year-old man today can expect to live until age 84, and a 65-year-old woman until age 87. But these are averages; many will live much longer. A 65-year-old couple has roughly a 50% chance that at least one spouse will reach age 90.

This means our retirement savings might need to last 25-30 years, possibly longer. That $500,000, which seems substantial, could generate only $16,000 to $20,000 per year over three decades.

The decline of pensions

According to recent Bureau of Labor Statistics data, fewer than 15% of private-sector workers have traditional defined-benefit pensions. This represents a dramatic shift from previous generations who could rely on guaranteed lifetime income from their employers.

Most of us must generate retirement income primarily from Social Security plus personal savings. The guaranteed income floor that pensions once provided no longer exists for most retirees today.

The reality of inflation

Even at historically “normal” inflation rates of 2–3% annually, prices double approximately every 24-28 years. What costs $50,000 today will cost $82,000–$ 97,000 in 25 years at these rates.

This means you can maintain your portfolio balance; it needs to grow at least enough to keep up with inflation to preserve purchasing power. A static $500,000 portfolio loses value in real terms every year.

The healthcare cost explosion

Healthcare costs typically grow 5 to 6% annually, substantially faster than general inflation in the generating retirement income series. Fidelity Investments estimates that the average 65-year-old couple retiring today will spend approximately $315,000 on healthcare costs throughout retirement (premiums, deductibles, co-pays, out-of-pocket expenses).

Healthcare isn’t just another expense category. It’s a growing, often unpredictable cost that can devastate even well-planned retirements.

The uncertainty of Social Security

While Social Security will likely continue in some form, the program faces funding challenges. Current projections suggest the trust fund reserves may be depleted by the 2030s, potentially requiring benefit reductions or tax increases unless Congress acts.

While you should plan on receiving Social Security, prudent planning means not assuming benefits at 100% of current projections, especially if you’re younger.

These realities point to one conclusion: most of us should save more than we currently do.

But how much more? Let’s calculate an estimate for your specific situation.

How much is “enough”?

This is one of the most perplexing questions in all of personal finance. Before we discuss ways to figure this out, I’m going to go out on a limb and say that, in an absolute sense, this is an unanswerable question. Why, you ask? Because the answer depends on unknowable variables, things that may or may not happen in the future.

For example, we don’t know how long we will live. We don’t know what our healthcare or long-term care costs will be. We don’t know how much we’ll spend. We don’t know what inflation will be. So, how can we determine how much savings we need and how much income we’ll need to generate for a largely unknown future?

We can’t know with absolute certainty, but we can make an estimate based on certain assumptions.

The financial services industry offers various rules of thumb that can be helpful. But they often conflict with each other and may not apply to your situation. There are some “back of the envelope” methods that take into account the specifics of your personal situation. They can be a little more helpful, so let’s examine the most common approaches and then review a helpful (though imprecise) personalized calculation method you can use.

Are Christians Saving Too Little for Retirement (2024) analyzes 2024 Institute for Christian Financial Health survey data showing a concerning disconnect between confidence and reality among 437 Christian respondents. While 65% believe the Bible teaches the wisdom of saving and 54% feel “on track” for retirement, actual savings reveal a crisis: 56% across all ages have under $100K saved, including 55% of ages 45-60 (peak earning years) and 63% over age 60 (nearing retirement). Using Fidelity’s Retirement Account Multiple guidelines (even reduced by 50%), most respondents fall drastically short—those 60+ should have $780K+ saved (6x median income of $130K), but the majority have under $100K. A survey shows Christians are conflicted about retirement savings—35% are unsure or do not believe biblical teachings on saving, fearing either hoarding (the rich fool in Luke 12) or presuming on God’s provision without action (ignoring Proverbs 6:6-8 and wisdom).

So You Want To Be An “Everyday Millionaire” (Updated 2026) examines former team member Chris Hogan’s book, which promotes Dave Ramsey’s philosophy that ordinary people can become millionaires through disciplined saving, debt avoidance, and consistent investing. Chris clarifies that “net-worth millionaire” (assets minus liabilities) differs from having $1 million in liquid assets—a couple with $610K in retirement savings, $350K in home equity, and $40K in cars would reach $1M in net worth but can’t write a $1M check.

5 Reasons You Shouldn’t Save For Retirement (2018) presents counterintuitive biblical cases when retirement saving should be delayed or reduced despite saving’s general importance. It also discusses the Biblical balance: pursue generosity always, establish an emergency fund, and eliminate non-secured debt, then save prudently without becoming a rich fool or miser, maintaining proper trust in God’s provision.

7 Hard Truths About Retirement (Updated 2026) presents biblical perspective on retirement’s challenges: (1) Loss of purpose—work provides meaning; find identity in Christ (1 Peter 2:9), not career; (2) Healthcare costs—$315K lifetime average for couples, rising faster than inflation; plan with HSAs, Medicare supplements, LTC insurance; (3) Limited support—Social Security averages only $1,900-$2,000/month ($3,500-$4,500 couples), provides 40-50% of retirement income; don’t presume on family; (4) God provides but requires action—Philippians 4:19 promises provision but Proverbs 6:6-8 demands wise preparation; (5) Behavioral/emotional risks—COVID-19 crash proved panicked sellers locked in losses while disciplined investors recovered; (6) Longevity uncertainty—50% chance one spouse lives to 92, requiring 25-30 year income; 4% withdrawal rate, consider annuities (now 6-7%); (7) Unreliable inheritances—average $230K-$250K often depleted by healthcare; one-third squander within two years. Balance prudent planning with trust in God’s faithfulness (Psalm 37:25).

Pascal’s Wager and Retirement Stewardship (2016) applies Blaise Pascal’s famous theological argument to retirement planning, specifically addressing “longevity risk” (outliving your money). Pascal’s Wager argues that belief in God is rational: if you’re wrong, you lose nothing; if you’re right, you gain everything. Similarly applied to retirement: If you plan/save for a long life but die early, you lose little (some current enjoyment); if you fail to plan for longevity and live to 90+, consequences are severe (dependency on children/welfare, loss of dignity). The core problem: only God knows our lifespan (Job 13:4), yet we must plan amid uncertainty. Scripture views long life as a blessing (Proverbs 9:10-11), so wise stewardship means “betting on longevity” through planning, saving, investing, and considering longevity insurance (annuities). The framework distinguishes risk (quantifiable probability) from uncertainty (unquantifiable future unknowns).

Contentment with Retirement Stewardship is Great Gain (2017) explains why Christians struggle with contentment (trusting in possessions, cultural influences, love of money, and not seeking God’s Kingdom first) and balances two biblical truths: God’s promise to care for His children and our responsibility to plan wisely for retirement. Without contentment, we can’t live below our means, give generously, or save prudently—discontentment leads to overspending, debt, and poor financial decisions driven by restlessness rather than wisdom. True contentment doesn’t come from accumulating wealth (even though 89% of Americans have a standard of living above the global middle class), but from pursuing God Himself through worship, prayer, gratitude, and recognizing that we already have the greatest treasure—Christ, forgiveness, and eternal life. As John Piper wrote, “The greatest commandment implies: ‘Thou shalt be happy in God.'”

Common guidelines (and their limitations)

We will delve into this further in future articles about sustainable portfolio withdrawals, but I wanted to introduce them as reasonable ways to gauge your progress without having to use extremely complex calculations.

Fidelity’s Age-Based Milestones:

• Age 30: 1x annual salary saved

• Age 40: 3x annual salary saved

• Age 50: 6x annual salary saved

• Age 60: 8x annual salary saved

• Age 67: 10x annual salary saved

These assume you start saving 6% of your salary at age 25, increase it by 1% annually to 12%, receive a 3% employer match, work continuously to age 67, and earn 5.5% annually on investments.

Using the milestones framework, a couple aged 57, with a $70,000 income, should have about $560,000 by the time they turn 60.

The “4% Withdrawal Rule”:

This widely cited rule suggests you can safely withdraw 4% of your portfolio annually (inflation-adjusted) with high confidence that it will last for 30 years. Therefore, you need savings equal to 25 times your annual expenses beyond guaranteed income.

Example: If you need $50,000 annually from savings, you need $1,250,000 saved ($50,000 × 25).

The “Replace 80% of Income” Rule:

Many planners suggest you’ll need 80% of pre-retirement income in retirement, assuming reduced work expenses, no more retirement contributions, and generally lower spending.

Example: If you have $100,000 pre-retirement income, you need $80,000 of retirement income. Keep in mind that more than 50% of the $80,000 may come from Social Security and perhaps a pension, so you may need only $30,000 to $$40,000 from your savings. If you settled on $35,000, you’d need $875,000 in savings under the “4% Withdrawal Rule.”

The problem with generic rules

These guidelines suffer from several limitations:

They don’t account for individual circumstances. Your health, housing costs, family obligations, and lifestyle preferences may differ dramatically from “average.”

They’re based on assumptions that may not hold. Historical investment returns, inflation rates, and life expectancies that shaped these rules may not reflect future reality.

They often overestimate needs. Many retirees find they spend less than 80% of their pre-retirement income, especially if they’ve paid off mortgages and eliminated debt.

They can create unnecessary anxiety. Seeing you “should” have $1 million when you have $200,000 can be paralyzing; your actual needs may be much more modest.

A more realistic approach

Instead of relying on generic formulas, you can estimate what you specifically need, your “personal number.” This four-step manual process provides a realistic, personalized target (you can use online planning tools to accomplish the same thing):

Step 1: Estimate retirement living expenses

Instead of using a percentage of pre-retirement income, start with your current annual expenses, then adjust for retirement realities:

Expenses that decrease or disappear:

• Retirement contributions (currently saving)

• Work-related costs (commuting, professional wardrobe, lunches out)

• Mortgage payment (if paid off before retirement)

• Payroll taxes (Social Security, Medicare)

• Children’s expenses (if they’re independent)

Expenses that may increase:

• Healthcare (Medicare premiums, supplemental insurance, out-of-pocket costs)

• Travel and hobbies (if you plan more leisure activities)

• Home maintenance (spending more time at home)

Expenses that stay roughly the same:

• Property taxes, insurance, utilities

• Food (though eating-out costs may decrease)

• Auto expenses

• Entertainment and discretionary spending

To accomplish this, review your last 12 months of actual expenses. Eliminate items that will disappear (work costs, retirement savings). Add healthcare premiums and out-of-pocket estimates. Adjust for paid-off mortgage if applicable.

If calculating expenses feels overwhelming, you could revert to the percentage approach and use 70-80% of your current gross income as a starting estimate, adjusting up if you have expensive hobbies or down if you’ll have minimal housing costs.

But don’t forget inflation if retirement is years away. At 2.5% annual inflation, expenses grow roughly 28% over 10 years, 63% over 20 years.

Step 2: Estimate guaranteed income sources

Calculate the annual income you’ll receive without touching savings:

Social Security: Visit ssa.gov to get your personalized estimate. Consider when you’ll claim benefits; they increase by roughly 8% per year from 62 to 70. Your estimate should reflect your planned claiming age.

Pension (if applicable): Check with your employer for projected monthly benefit. Verify whether it includes cost-of-living adjustments (most don’t).

Annuities: If you’ve purchased annuities, include projected annual income.

Part-time work: If you plan to work in retirement, estimate a realistic annual income. Be conservative—many retirees work less than planned due to health or opportunity constraints.

Rental income: If you have rental properties, include net annual income after expenses, taxes, and maintenance.

Other guaranteed sources: Military pensions, disability payments, or other reliable income streams.

Example (our couple at age 67):

• Social Security (Mike): $32,000 annually

• Social Security (Debbie, spousal benefit): $16,000 annually

• Part-time work: $8,000 annually

• Total guaranteed income: $56,000 annually

Notice that their guaranteed income is 80% of their pre-retirement income of $70,000.

Step 3: Calculate your income gap

This is simple math, but reveals your crucial “personal number”:

Income Gap = Estimated Annual Expenses – Guaranteed Annual Income

This gap must be filled by portfolio withdrawals.

Example (our couple again):

• Estimated retirement expenses: $65,000 annually

• Guaranteed income: $56,000 annually

• Income gap: $9,000 annually

Step 4: Calculate required savings

Use the 4% withdrawal rule as a starting guideline, recognizing you may need to adjust:

Required Savings = Income Gap × 25

Or more conservatively:

Required Savings = Income Gap × 30 (represents a 3.33% withdrawal rate)

Example (couple using 4% rule):

• Income gap: $9,000

• Required savings: $9,000 × 25 = $225,000

Example (couple using conservative 3.33% rule):

• Income gap: $9,000

• Required savings: $9,000 × 30 = $270,000

Important caveats about the 4% rule

The 4% rule faces increasing scrutiny. It was developed using historical market data that may not reflect current low-interest-rate environments and longer life expectancies. Many experts now suggest:

Variable withdrawal strategies: Adjust spending based on portfolio performance rather than a fixed percentage.

Lower initial rates: Start at 3-3.5% if retiring before 65 or concerned about longevity.

Higher rates may be acceptable if: You’re retiring after 70, have flexibility to reduce spending, or maintain significant home equity as backup.

The rule remains useful as a starting point for estimation while recognizing you’ll need flexibility when actually in retirement.

Rules can be helpful, but…

Throughout this article, I’ve referenced various rules of thumb: the 4% withdrawal rate, Fidelity’s retirement multiples, and the 80% replacement ratio. These are genuinely helpful as starting points. They give you a ballpark figure to work toward and can quickly reveal whether you’re in the right neighborhood or wildly off course.

But here’s the truth: Your specific situation is shaped by dozens of variables that no general rule can fully capture: your health and family longevity, your mortgage status, whether you’ll relocate to a lower-cost area, your hobbies and passions, whether you’ll work part-time, how you’ll spend your time in retirement, your healthcare needs, whether you’ll help adult children or aging parents, your giving commitments, and most importantly, what God is calling you to do in this season of life.

Two couples could both have $800,000 saved and receive identical Social Security benefits, yet one might thrive while the other struggles—not because one planned better, but because their circumstances, values, and callings differ. The couple with paid-off housing, modest hobbies, and good health needs far less than the couple with a mortgage, expensive travel plans, and chronic health conditions. The couple called to support grandchildren’s education or increase their ministry giving will need different resources than those focused primarily on personal comfort.

This is why the rules can only take you so far. They provide the framework, but you must do the detailed work of calculating your specific number based on your expected expenses, your life expectancy estimates, your risk tolerance, and your sense of calling.

What if it’s not enough?

The goal isn’t to match some generic benchmark; it’s to have enough to accomplish what God has called you to do in retirement without burdening others, while maintaining the freedom to serve and give generously. That number is deeply personal, and discovering it requires honest self-assessment, realistic projections, and prayerful discernment about how God wants you to steward this final season.

But what if you do some preliminary estimates and it looks like you haven’t saved enough? What can you do? Here’s some additional help:

Behind in Retirement Saving? There’s Hope and a Path Forward (Updated 2026) introduces Mike and Debbie (both 60) with $240,000 saved but needing $400,000 for early retirement at 62, facing a $160,000 gap while still trying to be faithful stewards. This connects to the Self-Sustaining Principle (1 Thessalonians 4:11-12), planning wisely to “be dependent on no one” while maintaining freedom to serve. The article balances two biblical truths: God’s promise to provide for His children (Matthew 6:25-26, Philippians 4:19) with our responsibility to take wise action (Proverbs 10:4-5, 21:5): “sovereignty does not mean passivity.” Christians must avoid both extremes of anxious hoarding and presumptuous passivity, instead walking the path of faithful stewardship by planning diligently while trusting God completely, rejecting fear-based decisions (2 Timothy 1:7) that lead to emotional rather than rational choices, and remembering that adequate self-sustainability matters more than maximum wealth. The situation isn’t hopeless with realistic assessment, strategic action, and faith in God’s provision.

From accumulation to income generation

This article (and the ones before it) covered the accumulation phase—saving and investing to build wealth during your working years. But the fundamental shift in retirement is from accumulation to distribution—converting your accumulated wealth into reliable, sustainable retirement income.

In the upcoming articles in this Sustainability Principle series, we’ll shift our focus to income and explore:

• Article #6: Generating Retirement Income – Understanding the three tiers of sustainable income

• Article #7: Tier 1 Income (The Sustainability Foundation) – Building your guaranteed income foundation with Social Security, pensions, and annuities

• Article #8: Tier 2 Income (The Stability Layer) – Creating stable, reliable cash flow through bonds, dividends, and other reliable sources

• Article #9: Tier 3 Income (The Flexibility Layer) – Managing portfolio withdrawals sustainably

I may change some of these or the order, but together, these components create the complete picture of sustainable retirement—built on the foundation of wealth you’re accumulating today.

In may ways, this book is now an excellent “sequel” to NextGen Steward—it picks up where that book leaves off. NextGen Steward is targeted at 20 and 30-somethings, whereas Redeeming Retirement would be most relevant for those in their 40s and beyond—all the way through retirement.

The new book is now available from Amazon in both paperback and Kindle formats.

A short summary

Here’s the book’s summary from the back cover. As you will see, I’ve updated many of the original chapters and also added several new ones to make it a more comprehensive book on retirement stewardship. There’s over 100 pages of new content, so you might be interested in this one, even if you purchased the first edition.

REVISED AND EXPANDED EDITION—Previously published as Redeeming Retirement: A Practical Guide to Catch Up by C.J. (Chris) Cagle

It’s now the most current comprehensive retirement planning guide written from a biblical perspective—combining rock-solid financial wisdom with a theological framework that embraces faith, wisdom, humility, generosity, and simplicity while rejecting both prosperity gospel optimism and scarcity-driven fear.

If you’re in your 40s, 50s, or 60s who’s not sure whether you’re adequately planning for retirement, nearing retirement and short on savings, or in retirement and not sure whether your savings will last, then this book was written for you.

Nearly half of Americans approaching or living in retirement are financially unprepared, not because they’re irresponsible, but because life happened. Medical bills, job losses, family obligations, and the simple reality of starting late have left many facing retirement with less savings than financial planners say they need. Others, including those already in retirement, aren’t sure whether they will have enough income or if it will last a lifetime.

This book provides comprehensive practical guidance for those who find themselves in any of these situations, whether you’re in your fifties scrambling to catch up, in your sixties making critical Medicare and Social Security decisions, or already retired and trying to make your savings last. It addresses the questions that keep you up at night:

• Can I retire with dignity on what I’ve saved?

• If not, how can I catch up?

• How do I navigate healthcare costs before Medicare?

• How do I optimize Social Security and Medicare in retirement?

• Should I invest differently before and during retirement?

• What withdrawal strategy makes limited resources last?

• How can I be generous and also pay my bills?

• How do I avoid tax traps that devastate constrained budgets?

Written from a Christian stewardship perspective but accessible to any reader, Redeeming Retirement offers hope without false promises and practical strategies without mind-numbing complexity. From catching up in your final working years to optimizing Social Security, managing RMDs, protecting against long-term care costs, and planning your legacy, this book walks you through the complete journey from midlife planning and preparation through retirement, regardless of your starting condition.

You may not have saved as much as some experts recommend, but with the right strategies, you can still retire with dignity. This book shows you how.

Why the update?

Here’s more about why I did released the updated version (taken from the book’s Preface):

I first published this book in early 2021 during the COVID pandemic. The 2026 edition you’re holding is substantially revised and expanded, while also including much of the original content. This new edition includes several entirely new chapters and has been extensively revised throughout, with nearly every chapter updated to reflect current law, research, and economic conditions. It is by far the most comprehensive book on retirement stewardship I have written.

The book you’re holding is substantially different from the 2021 edition. for multiple reasons:

I deliberately widened the scope. The original edition focused almost entirely on people still working and trying to catch up. This edition also speaks directly to those already in retirement, people managing distributions, healthcare costs, RMDs, and the daily reality of making fixed resources last. That transition from saving to spending brings its own questions, and they deserve serious answers.

The retirement landscape has changed significantly since 2021. The SECURE 2.0 Act of 2022 raised the required minimum distribution age from 72 to 73 (rising to 75 in 2033). It introduced a new “super catch-up” provision allowing those aged 60–63 to contribute an additional $11,250 annually to their 401(k) plans, a provision that didn’t exist when I first wrote this book. Tax law, economic conditions, and healthcare costs have all shifted. This revision reflects those realities.

The “One Big Beautiful Bill Act” (OBBBA), enacted in 2025, made the 2017 tax brackets and increased standard deductions permanent. It also gave seniors age 65 and older a special (temporary) bonus deduction of $6,000 per person. This provided greater (but not total) certainty about tax rates for the near future.

Annual contribution limits across retirement accounts have increased substantially. Due to inflation adjustments, 401(k) limits have risen from $19,500 to $23,500, and the total contribution limit for older workers can reach $80,250 in some cases.

The economic landscape has shifted dramatically as well. After more than a decade of near-zero interest rates, the Federal Reserve’s fight against inflation drove interest rates above 5% by 2024, fundamentally changing the calculus for reverse mortgages, home equity lines of credit, and annuity products. This positively impacted interest income from fixed-income investments, such as money markets, CDs, and bonds.

Americans experienced an inflation surge peaking at over 8% in 2022 before moderating, while home equity values surged from $15.54 trillion to over $32 trillion, making home equity an even more significant component of net worth for many retirees.

Social Security earnings test thresholds have increased substantially (from $18,960 to $23,400 for those below full retirement age). Also, the 2024 Social Security Trustees Report updated trust fund projections, and the program delivered its largest cost-of-living adjustment since 1981 (8.7% in 2023) to address inflation.

Respected retirement researchers, including Wade Pfau and Morningstar, have refined safe withdrawal rate guidance to a range of 3.9-5.2% rather than rigidly adhering to the traditional 4% rule. They recognize that individual circumstances, spending flexibility, and portfolio allocation matter significantly.

The 2022 bear market—which saw both stocks and bonds decline simultaneously—validated the conservative, diversified investment approach advocated in this book. While the fundamental principles of biblical stewardship and retirement planning remain unchanged, these updates help ensure you have the most up-to-date information to make informed decisions about your retirement.

Artificial Intelligence (AI) is exploding on the scene and will be the most disruptive and transformational technology of our lifetimes. It’s already reshaping personal finance and retirement, from AI-powered scams targeting seniors to tools that can help you navigate Medicare, optimize withdrawals, and manage healthcare decisions.

Finally, retirement itself has become more complicated, and the stakes for getting it wrong have never been higher for people with modest resources as well as those who have more.

Consider what the numbers actually show. Recent research from the Center for Retirement Research found that healthcare costs alone consume 29% of the median retiree’s Social Security benefits. For someone who entered retirement with modest savings and depends heavily on Social Security, losing nearly a third of it to healthcare before anything else is paid isn’t a planning inconvenience; it’s a crisis. And that’s before accounting for the Medicare surcharges known as IRMAA, which can add $1,000 to $7,000 or more annually for retirees whose income crosses certain thresholds, sometimes triggered by a single large IRA withdrawal or an unexpected capital gain.

The good news is that these problems are solvable, and the solutions are more accessible than most retirees realize. Smart Medicare decisions — choosing the right coverage for your health situation and income — can save thousands per year. Qualified Charitable Distributions (QCDs) allow retirees age 70½ or older to make direct distributions from their IRAs to their church or ministry, reducing their taxable income dollar-for-dollar without having to itemize. For someone who gives $5,000 annually anyway, routing it through QCDs rather than writing checks can save $600–$1,500 in federal taxes while simultaneously lowering Medicare premiums and reducing the percentage of Social Security that gets taxed. Required Minimum Distributions, handled strategically, become a coordinated system rather than an annual scramble. Withdrawal sequencing — knowing which accounts to draw from and in what order — can reduce lifetime taxes by tens of thousands of dollars compared to the approach most retirees take by default.

From the introduction

This book is organized to help you retire with dignity, regardless of where you’re starting. Here’s a summary of the major topics covered in the various chapters:

Part 1: Foundation and Assessment (Chapters 1-6)

• Understanding what “redeeming retirement” actually means

• Identifying the challenges you’ll face

• Recognizing your knowledge gaps

• Honestly assessing where you stand financially—whether a decade out or in the final stretch.

• Determining if you can retire with financial dignity

Part 2: Core Protection Strategies (Chapters 7-10)

• Protecting what you’ve already accumulated

• Managing healthcare costs before Medicare eligibility

• Choosing Medicare coverage wisely (where most retirees lose money)

• Optimizing Social Security benefits (can add $100,000+ in lifetime value)

Part 3: Investment Management (Chapters 11-14)

• Understanding investment basics without the jargon

• Building a portfolio appropriate for limited savings

• Managing risk when you can’t afford mistakes

• Avoiding expensive investment errors that devastate constrained budgets

Part 4: Catching Up and Optimization (Chapters 15-20)

• Catching up even when it seems impossible

• Eliminating debt strategically in your final working years

• Making smart housing decisions that free up cash flow

• Optimizing taxes in retirement (can save thousands annually)

• Navigating RMDs, QCDs, and Roth conversions strategically

• Planning withdrawal strategies that make modest savings last

Part 5: Risk Protection and Planning (Chapters 21-24)

• Protecting against catastrophic long-term care costs

• Getting the right insurance at the right price

• Deciding whether to work with a financial advisor

• Planning your estate with the five essential documents

Part 6: Legacy and Perspective (Chapters 25-29)

• Helping family without jeopardizing your own security

• Navigating AI tools and scams in retirement planning

• Giving generously even on a limited budget

• Considering your legacy beyond money

• Living with biblical contentment in retirement

Much of the new material in the book was taken from articles I have written on my blog, retirementstewardship.com, over the last few years, especially in 2025, due to all the tax law changes. These chapters, along with updates to existing ones, provide comprehensive guidance on retiring with dignity. Some will be immediately relevant to your situation. Others will become relevant as you transition through different phases, including retirement.

Use what helps and adapt what needs modification. By all means, seek professional guidance when it’s warranted. But keep this central: Retiring with dignity is achievable even when you’re behind, not through magic tricks or false promises, and certainly not get-rich-quick schemes, but through wise stewardship, strategic decision-making, realistic planning, and trust in God’s provision.

Whether you’re in midlife and trying to catch up, approaching retirement with critical decisions to make, or already retired and trying to make your resources last, you’ll find practical, biblically-grounded guidance for retiring with dignity.

A request

Should you decide to get the book, I’d really appreciate it if you would submit a review and rate it on Amazon. Because I changed the book’s subtitle, I had to publish it as a new work and that meant losing all the reviews for the original version. (That’s just how Amazon does things.)

In the previous article, we explored what net worth means, why it matters for sustainable retirement, and how to calculate and track it. We established that your current wealth forms the foundation for everything else in the Sustainability Principle—you can’t generate sustainable retirement income from wealth you never built.

Now we turn to the practical question: How do you actually build that wealth?

This article examines the mechanics of wealth accumulation, i.e., how wealth grows over time, the power of starting early, key investment decisions you’ll face, and practical strategies for building the foundation you need for sustainable retirement.

The good news: Building adequate wealth for sustainable retirement isn’t mysterious or complicated. It’s the result of consistent, disciplined habits applied over decades:

• Working diligently

• Spending less than you earn

• Saving regularly

• Investing wisely

• Avoiding big mistakes

• Staying patient through market cycles

Let’s explore each dimension.

How your net worth grows

To build adequate net worth (current wealth) for a sustainable retirement, you need to understand how wealth accumulates over time. The process can be represented by a simple equation:¹

Next Year’s Wealth = Current Wealth + Income – Taxes – Giving – Living Expenses + Investment Returns – Interest Paid

Or more simply:

Future Wealth = Starting Wealth + All You Earn – All You Spend – All Interest Paid – All You Give + All Your Investments Earn

But the real insight comes from understanding the power of time and compounding. Consider this classic case study about Susan, Bill, and Chris—three people who made different decisions in their 20s about saving for retirement:

• Susan – invested $5,000/year from age 25 to 35, then stopped (total invested: $50,000)

• Bill – started late and invested $5,000/year from age 35 to 65 (total invested: $150,000)

• Chris – committed to living below his means and invested $5,000/year from age 25 to 65 (total invested: $200,000)

Assuming a 7% annual return, here’s how they finished at age 65:

• Chris: $1,068,048 (invested $200,000)

• Susan: $562,683 (invested only $50,000)

• Bill: $505,365 (invested $150,000)

Susan invested three times less than Bill but ended up with more money. Her 10-year head start meant her money was earning money while Bill was still getting started.

This is the “power of compounding”; your money earns money, and the money your money earns also earns money. It’s a geometric progression that grows exponentially over time. It’s “magical math.”

The key takeaway for sustainable retirement: Most people think investments are glamorous and that “market-beating” returns are the key to wealth. But building the foundation for sustainable retirement is a byproduct of working diligently, spending less than you earn, saving regularly, and investing wisely, thereby minimizing losses, especially in the critical years leading up to retirement.

The earlier you start building your current wealth foundation, the more sustainable your retirement will be. Time is your greatest asset for achieving sustainability.

“A slack hand causes poverty, but the hand of the diligent makes rich. He who gathers in summer is a prudent son, but he who sleeps in harvest is a son who brings shame.” (Proverbs 10:4-5, ESV)

The core message of this verse is clear: When you’re in the summer of your life (the early years), that’s the time to “make hay” (save). But if you slumber at harvest time (procrastinate or fail to save altogether), you could be in for a long, difficult winter during retirement.

A biblical perspective on building wealth

How should Christians think about accumulating wealth for retirement? We’ve already touched on this numerous times, but some things bear repeating.

First, recognize that saving and investing aren’t optional extras—they’re expressions of faithful stewardship:

“But if anyone does not provide for his relatives, and especially for members of his household, he has denied the faith and is worse than an unbeliever.” (1 Timothy 5:8, ESV)

“Precious treasure and oil are in a wise man’s dwelling, but a foolish man devours it.” (Proverbs 21:20, ESV)

Building Current Wealth for sustainable retirement is part of providing for your household—ensuring you don’t become a burden to others in old age.

Second, understand that wealth is a tool, not a god. The purpose of building Current Wealth isn’t to hoard or to achieve financial independence as an end in itself—it’s to create the foundation for a sustainable retirement that enables continued service, generosity, and faithful stewardship:

“Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment.” (1 Timothy 6:17, NIV)

Third, remember that everything belongs to God. You’re not building “your” wealth—you’re stewarding resources God has entrusted to you:

“The earth is the LORD’s and the fullness thereof, the world and those who dwell therein.” (Psalm 24:1, ESV)

Finally, recognize that building sustainable retirement wealth should be balanced with present generosity. You’re not called to maximize accumulation at the expense of current giving:

“One gives freely, yet grows all the richer; another withholds what he should give, and only suffers want.” (Proverbs 11:24, ESV)

The goal is faithful stewardship that meets both present and future needs while maintaining a generous heart—building a foundation for a sustainable retirement while trusting God’s provision. Following a core set of biblical principles may prove helpful in this endeavor.

Biblical Traits of a Successful Investor (Updated 2026) identifies four character traits essential for wise, biblically-grounded investing: Simplicity (using the fewest investments necessary with minimal time required, avoiding needless complexity that leads to harmful over-trading), Patience (staying focused on long-term goals despite market noise and resisting get-rich-quick schemes, with research showing average investors underperform indexes by 3-4% annually due to poor timing decisions), Moderation (maintaining balanced approach avoiding extremes of either hoarding/greed or laziness/passivity, understanding when “enough is enough”), and Humility (recognizing limits of one’s knowledge and abilities, avoiding overconfidence that leads to speculation, and seeking wise counsel from Scripture and experienced advisers).

5 Reasons to be Humble in Retirement Stewardship (2019) argues that pride—taking credit for wealth and success—is antithetical to biblical stewardship, while humility (recognizing God as the source of all provision) is foundational to wise retirement planning. Drawing from Augustine (“you must first lay deep foundations of humility”), Tim Keller, and Scripture (1 Cor 4:7, 1 Tim 6:17, Prov 16:18), the article identifies five areas where overconfidence undermines retirement planning.

Stock Market Volatility and “The Prudent Man Rule(2019) uses the current return of market volatility as a springboard to introduce the “Prudent Man Rule” — a legal standard originating from an 1830 Harvard endowment lawsuit — which holds that anyone managing investments should do so with the care and judgment a reasonable, intelligent person would exercise, avoiding unnecessary risk and the probability of permanent loss. You then connect this secular legal principle to a biblical framework for prudence, walking through seven characteristics of the prudent investor drawn from Proverbs and other scriptures: having foresight, exercising caution, seeking and applying knowledge, acting rationally rather than emotionally, practicing discernment, managing diligently (including through diversification), and remaining humble about one’s own abilities and the uncertainty of markets. The takeaway is that volatility doesn’t have to be paralyzing — the prudent steward who builds a sound, diversified plan aligned with their risk tolerance can stay calm and “stay the course” when the markets inevitably rock and roll.

Invest and Retire Like Dave Ramsey (2023) critically evaluates Dave Ramsey’s retirement investing philosophy, agreeing with foundational principles (Baby Steps, debt elimination, 10-15% savings rate, tax-advantaged accounts like Roth IRAs and 401(k)s with employer match, mutual fund diversification over individual stocks) but diverging on key investment strategies.

Your big investment decisions

Once you’ve decided to save, you need an investment strategy. This requires several important decisions that will affect the sustainability of your eventual retirement.

Decision #1: Hire an adviser or do it yourself (DIY)?

Your first decision is whether to manage your investments yourself or to engage a professional.

If you’re saving in a 401(k) or 403(b), you’re already a DIY investor. Your employer provides investment options, educational materials, and perhaps classes or free counsel. Ultimately, you probably select the funds, monitor performance, and determine when changes are needed.

With an IRA, you make the same decisions but with far more options. Many excellent financial services firms offer self-directed IRA accounts and are typically reliable sources of financial guidance.

If you hire an adviser, most firms charge a percentage of assets under management—typically 0.50% to 1.5% annually. Some charge even higher fees or add sales commissions. (These are in addition to the fees charged by your investments themselves.) Be careful with these types of fees; they can add up quickly.

My perspective: I’m a fan of DIY investing for two reasons: (1) lower costs that enhance long-term wealth accumulation and sustainability, and (2) nobody cares about your (my) money as much as you (I) do. But it requires education: reading blogs, articles, books, and perhaps taking classes. Most people don’t want to invest that time and energy, so hiring a competent, trustworthy adviser at a reasonable fee (which I consider to be less than 1% of assets, preferably closer to 0.50% to 0.75%) is often the wise choice.

Finding an adviser: Look for fee-only advisers at napfa.org, letsmakeaplan.org, or plannersearch.org. Interview multiple candidates before choosing one.

Check each adviser’s background:

• Google their name and firm for lawsuits or disputes

• Search BrokerCheck for regulatory issues

• Review their Form ADV at adviserinfo.sec.gov

• Look for annual fees of 1% or less

• Verify they adhere to the fiduciary standard—putting your interests ahead of their own

Remember: fees compound negatively over time. The SEC’s analysis shows that a 1% ongoing fee on a $100,000 portfolio growing 4% annually costs $40,000 over 20 years. For a $500,000 portfolio over 30 years with 6% growth:

• At 0.25% fees: Ending balance ~$2.5 million

• At 1.00% fees: Ending balance ~$2.0 million

• Lost to fees: $500,000

Lower fees mean greater wealth accumulation, which directly translates into greater retirement sustainability.

Financial Advisors—Part 1: What They Do (Updated 2026) provides a comprehensive overview of the different types of financial advisors, distinguishing between Registered Investment Advisors (RIAs) that operate under fiduciary standards and broker-dealers, which are subject to different requirements under Regulation Best Interest (Reg BI).

Financial Advisors—Part 2: How They’re Paid (Updated 2026) explains the critical importance of understanding total advisory costs, detailing four primary compensation methods and showing how a portfolio charging 2.25% total fees would grow to only $315,000 over 20 years versus $610,000 with 0.15% total fees—nearly double the ending value from fee differences alone.

Financial Advisors – Part 3: How to Choose One (Updated 2026) provides a comprehensive framework for deciding whether you need an advisor, presenting a three-tier decision framework: you probably don’t need ongoing services if your situation is straightforward; you probably need periodic professional guidance for major irrevocable decisions like Social Security claiming; and you probably need ongoing comprehensive services only if your situation is genuinely complex or you’ve demonstrated inability to follow disciplined strategies.

Should Your Financial Planner/Adviser/Broker be a “Fiduciary”? (Updated 2026) goes more in-depth to answer the question of whether you should select a financial adviser who is held to the “fiduciary standard” (putting clients’ interests first) versus the “suitability standard” (recommending products that merely fit clients’ general profile). The article suggests that you look for an adviser with strong credentials (especially CFP), who works as a fiduciary (fee-only or fee-based RIAs preferred), clearly discloses compensation, and demonstrates commitment to your best interests.

Decision #2: Where to invest?

Whether you handle the process yourself or use an adviser, you need a financial institution to hold your assets and execute transactions.

Outstanding firms with client-focused business models:

Vanguard – The nation’s largest mutual fund company, known for low-cost index funds and ETFs. A client-owned structure means there is no conflict between customers and owners. As of 2025, Vanguard manages over $9 trillion in assets and continues to lead in low-cost investing, maximizing wealth accumulation.

Fidelity – Top-rated discount brokerage, privately owned. Excellent platform, broad fund selection, and competitive pricing. I held my IRA with Fidelity for many years.

Charles Schwab – Major discount brokerage with excellent reputation for value and service. Low costs, an outstanding website, and a broad range of proprietary funds.

TIAA – Over 100-year-old not-for-profit firm with stellar reputation in academic and non-profit communities. Specializes in retirement accounts.

Independent advisors: Registered Investment Advisers (RIAs) typically charge fees only (no commissions) and usually select custodians such as Fidelity, Schwab, or TD Ameritrade (now part of Schwab) for you.

A note on Christian advisors: Many Christians prefer working with Christian advisers, which is fine. But competence, experience, knowledge, wisdom, and integrity matter equally—they’re your financial adviser, not your pastor. You need both. Kingdom Advisors is a good place to start. The Blue Trust is a good firm to consider.

Decision #3: What to invest in?

This is about deciding what you’ll invest in and why. These are decisions that will ultimately determine how much wealth you accumulate for a sustainable retirement.

The temptation to “beat the market”: Some people try to play the markets by buying and selling to time ups and downs. This is a losing strategy in the vast majority of cases and often undermines long-term wealth accumulation.

Here’s reality: The stock market is us—all of us. We are the market. It’s foolish for average investors to believe they can consistently “beat the market.” To beat the market, you must beat someone else at the same game by more than your costs. That someone might be a sophisticated Wall Street hedge fund manager.

My recommendation: Don’t go toe-to-toe with Wall Street professionals with money you need for retirement sustainability. You’re better off owning a cheaply-managed basket of many different stocks—a mutual fund. I favor index funds because they virtually ensure you’ll capture your portion of economic growth in whatever sectors you’re investing in, at relatively low cost.

Fewer than 20% of actively managed funds outperform their index benchmarks over 15+ year periods, according to 2024 SPIVA data.

Beyond stocks—the need for diversification: You need more than just stocks. You need diversification for building sustainable wealth. Most experts recommend adding bonds to your portfolio as the traditional stock diversifier. Bonds tend to hold value when stocks fall, helping you avoid panic-selling during downturns and providing income when needed. Both are critical for sustainable retirement income later.

How much in bonds? That depends on your risk tolerance. But here’s the truth most won’t tell you: It’s not terribly crucial whether your allocation is 60/40, 40/60, or 50/50 stocks/bonds. What is important for building sustainable retirement wealth:

• Starting to save early

• Keeping expenses low

• Not getting greedy or fearful during market swings

• Not putting all eggs in one basket

• Sticking with your strategy

My personal experience: I maintained a balanced 60/40 stock/bond allocation for most of my working life. Sometimes I was a little more aggressive. I experienced several market “crashes,” and it still worked out okay in terms of building the foundation I needed for a sustainable retirement. Regular saving and capital preservation were more important to me than marginal gains, which is why I took a relatively conservative approach.

At the start of 2026, at age 73, my portfolio consists of 35% stocks, 55% bonds, and 10% cash across eight mutual funds and ETFs. I maintain approximately two years of living expenses liquid so I can ride out any stock market storm without selling damaged assets, which I think is essential for sustainable withdrawal strategies.

Why I reduced my equity allocation: Early in retirement, I gradually shifted my equity exposure from 60% to 40%, and more recently from 40% to 35%. This wasn’t panic; it was intentional risk reduction aligned with my sustainability goals. I’m seeking more stable, dividend- and interest-focused income rather than lots of growth. With my investments and Social Security income, I don’t need to maximize returns. I need to preserve capital and generate sustainable income. That’s the “enough” principle in action, a key concept within the Sustainability Principle framework. However, holding some stocks is a good hedge against inflation.

Investing for Retirement—Part One: Introduction (Updated 2026) outlines the foundational role of your net worth in sustaining retirement, explaining how decades of disciplined saving and prudent investing during your working years accumulate to create the portfolio balance that must support 25-30 years of retirement. The article grounds investing in biblical stewardship principles, distinguishing between prudent risk-taking for productive purposes (investing, which Scripture sanctions in Proverbs 31 and Ecclesiastes 11) and speculative gambling on future events (which presumes on the future, contrary to James 4:13-17). The article also discusses the different (investable) asset types and how they fit in a portfolio.

Investing for Retirement—Part Two: Your Approach (Updated 2026) explores how to hold retirement assets and different management styles. It explains that while thousands of investment options exist (over 9,500 mutual funds and 2,000 ETFs), most people need only 5-10 funds for a well-balanced portfolio. Assets can be held individually (stocks, bonds, cash) or as pooled investments (mutual funds, ETFs, closed-end funds), with pooled investments offering key advantages of diversification, professional oversight, and affordability. The article contrasts active management (where fund managers actively select investments to outperform the market, typically charging 0.5-1.5% fees) with passive management (index funds that simply track market performance at lower cost, typically 0.05-1.0% fees). Since John Bogle pioneered index investing in the 1970s, passive investing has surged—with about 80% of actively managed funds failing to beat their benchmarks over time—leading to massive flows from active to passive funds.

Investing for Retirement—Part 3: Managing Your Assets (Updated 2026) outlines three primary implementation approaches for retirement investing—managed portfolios (professionally managed with fees typically 0.35-1.50% annually), do-it-yourself investing (now more affordable than ever with zero-commission trading and ultra-low expense ratios below 0.10%), and single-fund approaches using target-date retirement funds (like Vanguard’s charging only 0.08%) that automatically adjust asset allocation as you age.

Decision #4: How Often to Adjust Your Portfolio?

Some people love tinkering with investments. That can be dangerous to your financial health and long-term wealth accumulation. Usually, it’s better to be patient and let financial markets work in your favor.

My approach: Unless your asset allocation deviates significantly from your risk tolerance, say, by more than 10% for more than a year, rebalancing is optional. If you want a precise balance, simply hold balanced funds that automatically rebalance. Target date funds do too.

In 2025, I rebalanced significantly, reducing my equity allocation from 40% to 35% and shifting toward dividend growth-focused investments. I still have some stock index funds; I just tilted more toward dividends. This wasn’t routine rebalancing; it was a strategic decision informed by my age, risk tolerance, asset base, and sustainability goals.

Decision #5: What to do if you’ve fallen behind

This is perhaps the most difficult decision to confront. You’ve calculated your net worth, assessed your trajectory using the five-step framework, and discovered an uncomfortable truth: you’re not on track. The gap between where you are and where you need to be feels overwhelming—maybe even insurmountable.

Perhaps you’re 55 with $150,000 saved when you should have $500,000. Or you’re 62 with $200,000, hoping to retire at 65, but the numbers show you’ll need to work until 70, or longer. Or worst of all, you’re already retired with inadequate savings, watching your portfolio deplete faster than expected while wondering how you’ll make it last.

If this describes your situation, first know this: You’re not alone. According to the Federal Reserve’s 2022 Survey of Consumer Finances, the median retirement account balance for Americans aged 65-74 is only $200,000. Many people discover late in the game that they haven’t saved nearly enough. This isn’t a moral failing; it’s a wake-up call requiring honest assessment and decisive action.

Second, know this: It’s not hopeless. While your options narrow as retirement approaches, strategic steps can still significantly improve your situation. The Self-Sustaining Principle doesn’t demand perfection—it calls for faithfulness with what you have, starting today.

Two paths forward:

The path you take depends entirely on where you are in your retirement journey:

If you have time (10-15 years until retirement), you still have meaningful leverage to change your trajectory. Every year of aggressive saving, compound returns, and strategic decisions can close substantial gaps. Working even 2-3 extra years beyond your original plan can significantly improve retirement security through the compounding benefits of continued contributions, delayed withdrawals, and higher Social Security benefits.

If you’re already in or near retirement (within 5 years or already retired), your options are more limited but not nonexistent. You’re no longer reducing expenses to save more—you’re reducing to make what you have last longer. Part-time work, strategic Social Security claiming, downsizing, and careful withdrawal management become your primary tools.

Because the strategies differ so dramatically depending on your situation, I’ve written two comprehensive articles that walk through specific, actionable steps:

Behind in Retirement Savings? There’s Hope and a Path Forward (Updated 2026) addresses those who still have time to catch up. It walks through the specific steps Mike and Debbie (age 60, retiring at 62 for mission work) can take to close their $120,000 savings gap: increasing savings immediately to 20-30% of income, making catch-up contributions, reducing expenses dramatically, paying off their mortgage before retirement, considering working longer, and maintaining faithful giving through it all.

When Time Is Running Short: Practical Steps for Catching Up on Retirement Savings (Updated 2026) follows some example couples: Mike and Debbie (pre-retirement) and Tom and Susan (already retired with only $180,000 saved and withdrawing at a risky 6.7% rate. It walks through the emotional and practical realities of catching up when options are limited.

Making DIY investing simple

If you choose the do-it-yourself path, here are several approaches that work well:

1. Target date retirement funds

These “one-stop-shop” funds do everything for you: asset allocation, fund selection, rebalancing, etc. They automatically become more conservative as your target retirement date approaches. Vanguard, Fidelity, Schwab, T. Rowe Price, and TIAA all offer quality target-date funds with expense ratios under 0.15%.

2. Model portfolio approach

You can choose to follow an established strategy. Here are some suggested resources:

• Sound Mind Investing – Christian investing service offering multiple strategies and model portfolios (subscription required)

• Bogleheads Lazy Portfolios – Simple asset allocation plans

• Paul Merriman’s Ultimate Buy-and-Hold Portfolio

• Rick Ferri’s Core-4 Portfolios

• 8 Simple Portfolios – from Oblivious Investor (Mike Piper, CPA)

• 55 Lazy Portfolios – from Optimized Portfolio

3. Robo-advisers

Technology-driven investment services at 0.25%-0.50%:

• Betterment

• Wealthfront

• Fidelity Go

• Schwab Intelligent Portfolios

• Vanguard Digital Advisor

4. Educational resources (books)

For beginners:

• The Bogleheads’ Guide to Investing – Multiple Bogleheads

• The Little Book of Common Sense Investing – John C. Bogle

• Investing Made Simple – Mike Piper, CPA

For deeper understanding:

• A Wealth of Common Sense – Ben Carlson

• The Intelligent Asset Allocator – William Bernstein

• A Random Walk Down Wall Street – Burton G. Malkiel

My books

The most important things

The most important recommendation I can make for building sustainable retirement wealth: Eschew complexity and embrace simplicity and low costs. RUN toward both.

Excellent examples of simple, low-cost investing are Target Date Retirement Funds. You can obtain broad diversification at low cost from providers like Vanguard (0.08% expense ratio), Fidelity (0.12%), or Schwab (0.08%). These low costs compound positively over decades, maximizing your wealth accumulation.

Diversification versus complication: Diversification is beneficial for building sustainable wealth. Scattering money across multiple accounts and products is not. My retirement investments are held in eight funds within two IRA accounts (one Traditional, one Roth). They’re highly visible, transparent, and very manageable.

In my experience, the most complex financial products are also the most expensive, characterized by high commissions and fees that undermine wealth accumulation. Keep things simple and understandable.

Remember this truth: There is no such thing as a perfect portfolio. There is no single best investment. You can only make good, well-informed choices that align with your values and goals—choices that are good enough to build adequate Current Wealth for sustainable retirement.

Avoid the big mistakes: Risky, expensive investments you don’t understand. Buying and selling at the wrong times based on emotion. Panic-selling during downturns. Chasing performance. Over-trading. All of these undermine the steady wealth accumulation needed for sustainable retirement.

You only need to meet your personal investment objectives to achieve a sustainable retirement. Avoid comparisons and “if only” thinking. Do your homework and make a good-enough decision. Then patiently leave your money alone and get on with life.

That’s what you save and invest for in the first place, and that’s the essence of wise retirement stewardship and the foundation of sustainable retirement.

1. I “borrowed” this equation from my book NextGen Steward. In it, I use the “Financial Life Equation” (FLE) extensively to cover a range of topics for young readers. ↩︎

In the first two articles in this series, I introduced the Sustainability Principle—the fundamental concept that your retirement will be financially sustainable when your reliable income sources consistently cover your ongoing expenses and obligations throughout your lifetime. We also discussed this from a biblical perspective and recommended guardrails to help ensure self-sustainability doesn’t become self-sufficiency.

At its core, the Sustainability Principle can be expressed as a simple relationship:

Sustainable Retirement = Reliable Income ≥ Ongoing Expenses (over time, adjusted for inflation and risk)

But before you can create sustainable retirement income, you need something to work with—your “guaranteed” income sources (such as Social Security and pensions), typically supplemented with your retirement savings (accumulated wealth) that will become the foundation of your retirement sustainability.

This article examines what net worth means, why it matters for achieving sustainable retirement, and how to calculate and track it effectively.

Your net worth at retirement represents the culmination of decades of decisions about earning, saving, spending, giving, and investing. It’s part of the foundation upon which everything else in the Sustainability Principle rests. Whether you achieve a sustainable retirement could depend almost entirely on how much wealth you accumulate during your working years and how you position that wealth across different account types and asset classes.

This article addresses the first critical question: “What is it? And where do you stand today?

Our uneasiness with “wealth”

You won’t find the words “net worth” in the Bible; you’re more likely to see “wealth” or “riches.” That said, I may use the terms “wealth” and “net worth” interchangeably, but they are not identical.

Wealth refers to the total value of valuable assets, while net worth is specifically the value of all assets minus liabilities. Essentially, net worth measures an individual’s financial health, while wealth encompasses a broader range of financial and material resources. So, our net worth is basically our “wealth” minus any claims by others against us (mainly debts for loans, taxes, settlements, etc.).

Many Christians feel uncomfortable with the word “wealth.” Perhaps because it sounds too worldly, too “wealthy,” too “scroogy,” perhaps conjuring images of selfishness, greed, or materialism. We worry that talking about building wealth, much less doing it, contradicts the Bible’s numerous warnings about the dangers of riches:

“No one can serve two masters, for either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve God and money.” (Matthew 6:24, ESV)

“Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God.” (Matthew 19:24, ESV)

“But those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that plunge people into ruin and destruction. For the love of money is a root of all kinds of evils.” (1 Timothy 6:9-10, ESV)

We are right to be concerned given these warnings and others. But we also need to be careful here. Wealth is actually a biblical concept, often used interchangeably with “riches” throughout Scripture—and not always negatively. Consider Psalm 112:1-3:

“Blessed is the man who fears the Lord, who greatly delights in his commandments! His offspring will be mighty in the land; the generation of the upright will be blessed. Wealth and riches are in his house, and his righteousness endures forever.” (ESV)

In these verses, the phrase “wealth and riches” is what scholars call a hendiadys—two words used together to express a single concept. Here, it emphasizes “an abundance of valuable possessions.” These material blessings are present, according to one commentator, “as a reward, not as the aim of life.”¹

This distinction is everything. The psalm describes a person who “fears the Lord” and “greatly delights in his commandments” (vs. 1). The wealth and riches that follow are presented as consequences of righteous living (not guaranteed), not the goal that motivated it. The godly person doesn’t pursue wealth as their ultimate aim; they pursue God, obedience, love, mercy, compassion, generosity, and righteousness. The material blessings come as byproducts of faithful stewardship, not as the object of their striving. Though they may come, they must not be presumed upon.

The second half of the verse reinforces this: “His righteousness endures forever.” Some translations render “righteousness” as “prosperity,” but the deeper meaning is that the righteous character and faithful stewardship that produced the wealth continue. It’s not just about accumulating—it’s about a lifestyle of faithfulness that endures through all seasons, including when material blessings arrive and when they don’t.

Yes, the greatest wealth is knowing God Himself, experiencing His goodness, and the assurance of eternal life in Christ. But material blessings are also expressions of His grace, which come to each person in different proportions according to His sovereign will and are intended to be stewarded faithfully.

A blessing or a curse

Scripture presents wealth in tension—it can be either a blessing or a curse², and wisdom requires understanding both dimensions.

Wealth as a blessing

God intends for us to enjoy His material blessings and use them according to His purposes. This is the heart of stewardship: managing resources for our benefit, God’s glory, and others’ good, as God intended.

The practical blessings of building wealth include:

Meeting needs and wants: Wealth provides for yourself and your family, purchases necessary items, and occasionally allows “extras” that enrich life and create memories.

Creating margin: Adequate wealth enables you to withstand financial shocks—job loss, medical crises, unexpected expenses. This margin reduces financial stress and anxiety, creating breathing room.

Enabling flexibility: More resources mean more options in how you spend your time and what you do with your life. Want to change careers at 40? Support a mission effort? Help a child through a crisis? Wealth makes these possibilities real.

Facilitating generosity: One of the greatest blessings of wealth—the ability to give generously to God’s work, help others in need, and make an eternal impact with temporary resources. As Paul told Timothy, the wealthy should be “generous and ready to share” (1 Timothy 6:18).

Providing for a sustainable retirement: Adequate wealth allows you to retire with dignity, maintain your independence, and continue serving without financial anxiety—which is precisely what the Sustainability Principle calls us to prepare for.

Wealth as a “curse”

Wealth is never directly called a “curse” in the Bible, but it is full of warnings about the dangers of the love of money and material things. For example,

Do not love the world or the things in the world. If anyone loves the world, the love of the Father is not in him. For all that is in the world—the desires of the flesh and the desires of the eyes and pride of life—is not from the Father but is from the world. And the world is passing away along with its desires, but whoever does the will of God abides forever. (1 John 2:15-17, ESV).

Wealth becomes a curse when it commands too much of our time, energy, and affection. Jesus told the parable of the rich fool who built bigger barns to store his wealth, focused entirely on personal ease and comfort, with no thought for God or others. His wealth became a curse because it captured his heart (Luke 12:13-21).

The Bible repeatedly warns:

“Whoever trusts in his riches will fall, but the righteous will flourish like a green leaf.” (Proverbs 11:28, ESV)

“And Jesus looked around and said to his disciples, ‘How difficult it will be for those who have wealth to enter the kingdom of God!'” (Mark 10:23, ESV)

The solution is stewardship

The solution to this apparent contradiction—extolling the virtues of wealth while warning of its dangers—lies in proper stewardship.

When we manage our finances according to biblical values and keep our hearts free from the love of money, we can enjoy God’s material blessings without becoming enslaved to them, using wealth wisely for kingdom purposes, and giving generously from grateful hearts. We can plan responsibly for future needs—including a sustainable retirement—while maintaining proper priorities, with God, not money, holding our ultimate allegiance.

It’s not either-or but both-and. We can build wealth faithfully while keeping our hearts fixed on God.

Is Building Wealth for Retirement “Striving After the Wind”? (Updated 2026) discusses the crucial distinction between “wealth” (funded contentment—having enough to live and flourish) and “riches” (an insatiable desire for more that’s never satisfied). The former is biblical stewardship; the latter is idolatry.

Can Retirement Stewardship Make You a Rich Fool? (Updated 2026) examines the tension between Luke’s warning against hoarding and Proverbs’ commendation of saving. The rich fool’s problem wasn’t that he saved for the future—it was that he was “not rich toward God,” storing up wealth only for himself with no thought for others or kingdom purposes.

The Sustainability Principle navigates this tension well: We build wealth not for selfish accumulation but for responsible self-sufficiency that allows us to avoid burdening others while maintaining the freedom to serve and give generously. That’s faithful stewardship.

“But if anyone does not provide for his relatives, and especially for members of his household, he has denied the faith and is worse than an unbeliever.” (1 Timothy 5:8, ESV)

Building adequate net worth for sustainable retirement is part of providing for your household—ensuring you don’t become a burden to others in old age.

Understanding your current net worth

For our purposes, I’ll use “wealth,” “current wealth,” and “net worth” interchangeably. Net worth is simply calculated as:

Net Worth = Assets – Liabilities

Where:

• Assets are resources with economic value that you own or control: cash, investments, home equity, real estate, retirement accounts, vehicles, etc.

• Liabilities are debts owed to others, such as mortgages, car loans, credit card balances, and student loans.

This relatively simple calculation forms the foundation for understanding your financial position and your capacity to achieve a sustainable retirement.

Why net worth matters for sustainability

Here’s the fundamental reality: Your ability to achieve a sustainable retirement may depend significantly on the wealth you’ve accumulated by retirement age.

Unless you have substantial guaranteed income from pensions or annuities, your personal savings and investments must bridge the gap between Social Security and your living expenses, perhaps for 25-30 years or more.

Consider the three primary income sources most of us will have in retirement:

1. Social Security: Provides base income (typically covering 30-40% of expenses), inflation-adjusted and guaranteed for life. Importantly, Social Security isn’t dependent on your net worth; it’s based on your earnings history. You can’t buy more Social Security by having more wealth, nor will you receive less because you have more wealth.

2. Pension (if you have one): Provides additional guaranteed income, though these are increasingly rare. Like Social Security, pension amounts are based on years of service and salary, not on your accumulated wealth.

3. Personal Savings and Investments: These must cover the remaining 50-70% of expenses for most retirees, and they’re directly determined by your accumulated wealth at retirement.

Here’s how the math works using a standard 4% sustainable withdrawal rate:[^2]

• Retire with $500,000 in savings: you can safely withdraw approximately $20,000/year

• Retire with $1,000,000 in savings: you can safely withdraw approximately $40,000/year

• Retire with $2,000,000 in savings: you can safely withdraw approximately $80,000/year

If Social Security provides $30,000 annually, your total retirement income would be:

• $500,000 saved: $50,000/year total ($30K SS + $20K portfolio)

• $1,000,000 saved: $70,000/year total ($30K SS + $40K portfolio)

• $2,000,000 saved: $110,000/year total ($30K SS + $80K portfolio)

The Sustainability Principle requires adequate current wealth. If you retire with insufficient savings, you’ll either need to work longer, reduce your living expenses dramatically, or risk running out of money and losing your financial sustainability.

This isn’t about greed or materialism—it’s about responsibility. Building adequate wealth during your working years is the foundation for a sustainable retirement.

It’s also important how your wealth is positioned

Current wealth isn’t just about the total dollar amount. How that wealth is structured matters enormously for your ability to achieve a sustainable retirement.

Tax diversification

Where your money sits has huge implications for retirement sustainability:

Traditional IRA/401(k): Tax-deferred growth, but taxed as ordinary income when withdrawn. RMDs begin at 73-75. Every dollar withdrawn increases taxable income.

Roth IRA/401(k): Tax-free growth and withdrawals. No RMDs during your lifetime. Provides flexibility to manage taxable income in retirement.

Taxable brokerage accounts: Taxed annually on dividends/interest, but withdrawals of principal are tax-free. Capital gains are taxed at preferential rates.

Having money across all three buckets provides flexibility to optimize taxes each year, which can significantly extend how long your money lasts and, in turn, your retirement sustainability. As I’ll explore in future articles on tax planning, this flexibility is crucial for maximizing sustainability.

Asset allocation

How you divide between stocks, bonds, and cash determines both your risk exposure and growth potential:

Too aggressive (too much stock): Risk of catastrophic losses early in retirement (sequence risk) that you can’t recover from while withdrawing, threatening sustainability.

Too conservative (too much in bonds/cash): Risk of not keeping pace with inflation over 30 years, slowly eroding purchasing power and undermining long-term sustainability.

The right balance depends on your age, risk tolerance, other income sources, and total wealth. But the principle remains: Your allocation directly affects your ability to maintain a sustainable retirement.

Liquidity and accessibility

Some wealth is readily accessible (savings accounts, brokerage accounts), while other wealth is tied up (home equity, retirement accounts with penalties, illiquid investments).

Sustainable retirement requires adequate liquid wealth for:

• Emergency reserves (unexpected expenses without derailing plans)

• Planned withdrawals (regular income generation)

• Flexibility (opportunity to help others, handle surprises)

Having wealth that’s entirely illiquid (such as being “house rich, cash poor”) can undermine sustainability, even with substantial net worth.

Calculating and tracking your net worth

Understanding your current wealth requires an accurate and honest assessment. Here’s how:

Step 1: List all assets

Liquid assets:

• Checking and savings accounts

• Money market accounts, CDs

• Taxable brokerage accounts

• Bonds and bond funds

Retirement accounts:

• Traditional IRA/401(k)/403(b)

• Roth IRA/401(k)

• Other retirement accounts (SEP, SIMPLE, etc.)

Real estate:

• Primary residence (current market value)

• Investment/rental properties

• Vacation homes

Other assets:

• Vehicles

• Business ownership interests

• Valuable collections

• Life insurance cash value

Step 2: List all liabilities

Home Debt: Mortgage, home equity loans/lines

Vehicle Debt: Auto loans, RV/boat loans

Consumer Debt: Credit cards, personal loans, student loans

Other Debt: Business loans, any other money owed

Step 3: Calculate net worth

Total Assets – Total Liabilities = Net Worth

But for retirement planning purposes, break it down further:

Retirement-Specific Net Worth:

• Liquid financial assets (cash, investments, retirement accounts)

• Minus: Outstanding debts

• Equals: Investable wealth available for retirement income

This is the number that determines your withdrawal capacity and, in turn, your ability to achieve a sustainable retirement.

Practical tools for tracking net worth

You can’t manage what you don’t measure. Here are excellent tools:

Comprehensive automated tracking

Personal Capital (now Empower) – Free, links all accounts automatically, excellent dashboard showing net worth trends over time.

Monarch Money – Subscription-based (~$100/year), great for couples, clean interface.

YNAB (You Need A Budget) – Subscription-based (~$99/year), best for integrating detailed budgeting with net worth tracking.

Simple calculations

Bankrate Net Worth Calculator – Free online calculator, no account required.

Spreadsheet – Build your own in Excel or Google Sheets for complete customization.

My Recommendation: Start with Personal Capital/Empower for comprehensive free features. For complete control, maintain your own spreadsheet alongside automated tools.

The key is tracking regularly—at least quarterly, ideally monthly. This allows you to:

• See trends over time (Is wealth growing as expected?)

• Catch problems early (Overspending? Investment underperformance?)

• Stay motivated (Watching progress is encouraging)

• Make adjustments (E.g., Change savings rate, allocation, etc.).

Assessing your sustainability trajectory

Once you know your current wealth, the critical question becomes: Am I on track to accumulate enough for a sustainable retirement?

We will get into this in much more detail in future articles about portfolio withdrawals and your sustainable withdrawal rate (SWR), but for now, here’s a simple framework for a quick assessment:

Step 1: Estimate required retirement income

Start with your current expenses and adjust for retirement:

• Eliminate work-related costs (commuting, professional wardrobe)

• Eliminate savings (you’re now drawing, not saving)

• Add healthcare costs (premiums, out-of-pocket)

• Adjust lifestyle assumptions (travel, hobbies)

Example: If you spend $70,000 now, you might need $60,000 in retirement. Or, depending on your plans, you might need more, at least early on.

Step 2: Estimate guaranteed income

• Social Security: Use ssa.gov to get your projected benefit

• Pension: Check with employer for projected amount

• Annuities: Any guaranteed income you’ve purchased

Example: $30,000 from Social Security + $10,000 pension = $40,000 guaranteed

Step 3: Calculate portfolio income needed

Required Income – Guaranteed Income = Portfolio Income Needed

Example: $60,000 needed – $40,000 guaranteed = $20,000 from portfolio

Step 4: Calculate savings required

Using 4% rule as a rough sustainable withdrawal rate guideline:

Portfolio Income Needed ÷ 0.04 = Wealth Required

Example: $20,000 ÷ 0.04 = $500,000 needed

Step 5: Compare to your current trajectory

If you’re 45 with $200,000 saved, and 20 years until retirement:

• Current: $200,000

• Target: $500,000

• Gap: $300,000

• Years remaining: 20

With consistent saving and reasonable returns, you can likely close this gap.

If you’re 55, have $100,000 saved, and have 10 years to go, you’ll need to dramatically increase your savings or adjust your retirement expectations.

This assessment reveals whether you’re on track for a sustainable retirement. If you’re falling short, you have options:

• Increase your savings rate now

• Work longer (even 2-3 extra years makes a huge difference)

• Reduce expected retirement expenses

• Plan for part-time work in retirement

• A combination of the above

The earlier you assess and adjust, the more options you have.

What Condition is Your (Retirement Financial) Condition In? (Updated 2026) provides real-world context about the range of retirement financial conditions, showing five distinct financial profiles that humanize these concepts and help you understand where you stand relative to other retirees.

Help—I Think Too Much About My Retirement Savings! (Updated 2026) discusses how Christians can obsess over retirement savings just like everyone else, constantly checking accounts and worrying about their “number.” Not due to poor planning, but due to heart issues. We struggle with fear (not having enough), guilt (having too much), loss aversion, and discontentment. The solution isn’t willpower but biblical thinking: trust God rather than riches, practice contentment with what He’s provided, surrender control over what you can’t control, and establish a solid plan that allows you to check accounts only 1-2 times per year.

A biblical perspective on net worth

How should Christians think about tracking and understanding their net worth?

First, recognize that understanding your financial position isn’t pride or materialism—it’s wise stewardship:

“Know well the condition of your flocks, and give attention to your herds.” (Proverbs 27:23, ESV)

In ancient times, wealth was measured in livestock. Today, we measure it differently, but the principle remains: faithful stewards know their financial condition.

Second, understand that your net worth isn’t your identity or a measure of security. It’s simply a measurement tool that helps you steward well:

“Command those who are rich in this present world not to be arrogant nor to put their hope in wealth, which is so uncertain, but to put their hope in God, who richly provides us with everything for our enjoyment.” (1 Timothy 6:17, NIV)

Third, remember that everything belongs to God. You’re not calculating “your” wealth—you’re assessing resources God has entrusted to you:

“The earth is the LORD’s and the fullness thereof, the world and those who dwell therein.” (Psalm 24:1, ESV)

Finally, use this knowledge for faithful stewardship, not anxious striving:

“But if anyone does not provide for his relatives, and especially for members of his household, he has denied the faith and is worse than an unbeliever.” (1 Timothy 5:8, ESV)

Understanding your net worth helps you provide faithfully—neither presuming on God’s provision nor neglecting your responsibility to plan wisely.

Wrapping up

This article addresses understanding your current net worth, where you stand today, and how to measure it. The next article will explore how to build that net worth through consistent saving and wise investing during your working years.

Together, these form the foundation of the Sustainability Principle: understanding what you have, building what you need, and eventually converting it into sustainable retirement income.

1. https://www.thegospelcoalition.org/commentary/psalm-107-psalm-150/ ↩︎

2. Just to be clear, the Bible doesn’t explicitly state that wealth itself is a curse, but it warns about the spiritual dangers associated with it, such as pride, greed, and false security. It emphasizes that the love of money can lead to various evils and that one should be cautious about placing their trust in riches rather than in God. ↩︎

As we discussed in the introductory article, the Self-Sustaining Principle, grounded in Paul’s instruction to “be dependent on no one” (1 Thessalonians 4:12), calls us to wise stewardship. We plan ahead, save diligently, and live responsibly so we won’t burden others in our later years while maintaining freedom to serve God’s purposes.

This is faithful stewardship. This is biblical wisdom. This is good.

But there’s a danger lurking beneath the surface that can transform faithful stewardship into something unhealthy. The pursuit of self-sustainability can become an obsession with self-sufficiency through financial independence, which in turn becomes an idol.

When “financial freedom” becomes the ultimate goal rather than a means to serve God, when our security rests in our portfolio rather than in Christ, when we prioritize being able to retire more than anything else, when “retiring early” means escaping work rather than embracing new forms of service, we’ve crossed a line.

We’ve moved from biblical self-sustainability to secular self-sufficiency. From faithful stewardship to idolatry.

This shift is playing out dramatically in what’s called the FIRE movement—Financial Independence, Retire Early. While FIRE contains some legitimate financial wisdom, it also illustrates how the pursuit of financial independence can become an all-consuming goal that distorts our relationship with work, money, and, ultimately, with God.

Before we dive into practical strategies for building sustainable retirement income, we need to establish critical guardrails. We still need to understand the difference between pursuing self-sufficiency FOR mission and service versus pursuing financial independence FROM work; between planning wisely and hoarding obsessively; and between faithful stewardship and money-worship.

I need to note that, given the principle of Christian liberty, we all have a degree of freedom in this area. I’ll do my best to provide some recommended guardrails, but in doing so, I’m highlighting spiritual dangers, not imposing rules. These guardrails aren’t laws to bind your conscience; they’re wisdom for exercising your liberty without falling into idolatry. “All things are lawful, but not all things are helpful” (1 Corinthians 10:23, ESV).

You have the freedom to pursue early retirement, but you should do so for the right reasons. You have the liberty to make financial decisions before God. I’m not your judge. But liberty requires self-examination. So use that liberty wisely, ensuring your pursuit of financial independence serves kingdom purposes rather than becoming an idol. “For you were called to freedom, brothers. Only do not use your freedom as an opportunity for the flesh, but through love serve one another” (Galatians 5:13, ESV).

Understanding the FIRE movement

FIRE (Financial Independence, Retire Early) has gained significant traction in the personal finance space over the past decade. The basic premise is compelling: through aggressive saving, extreme frugality, and strategic investing, you can achieve financial independence well before the traditional retirement age, potentially in your 30s, 40s, or early 50s. No more work—just 30, 40, or 50 years of leisure!

The FIRE “formula”

The math is actually quite simple (though it may be hard to achieve in real life):

Step 1: Live on as little as possible (often 25-50% of income)

Step 2: Save and invest everything else (50-75% of income)

Step 3: Accumulate 25-30 times your annual expenses

Step 4: Retire early and live off 3-4% annual portfolio withdrawals

Example: If you can live on $40,000 annually, save aggressively for 10-15 years to accumulate $1,000,000-1,200,000, then “retire” and never work for money again.

The extreme version

On the far end of the spectrum is “Early Retirement Extreme” (ERE), which takes FIRE principles to their logical conclusion. ERE proponents argue that people in developed countries are wealthy by global standards, and that we can live materially sufficient and happy lives on 20-25% of typical spending through extreme frugality.

By living on $10,000-15,000 annually and investing the rest, some claim you can retire within 5-7 years of starting your career. A college graduate earning $60,000 who lives on $12,000 and invests $48,000 annually could theoretically accumulate $300,000 by age 30. At a 4% withdrawal rate, that generates $12,000 annually, which is exactly what they’ve been living on.

The theological problems with FIRE

I understand the attraction. I can even see how Christians might find FIRE appealing: “I’ll achieve financial independence, then I’ll be free to serve in ministry full-time without needing support-raising or worrying about income!”

But here’s the problem: FIRE is built on a fundamentally flawed theological foundation.

Problem 1: Financial independence as the ultimate goal

The very name—Financial Independence—reveals the core issue. The goal is independence itself. Freedom FROM constraints. Self-sufficiency. The ability to live life on your own terms without needing anyone, including, implicitly, God.

FIRE philosophy: “Once I hit my number, I’m free. I’ve escaped. I don’t need to work. I don’t need anyone. I’m independent.”

Biblical reality: “Whoever trusts in his riches will fall, but the righteous will flourish like a green leaf” (Proverbs 11:28). Complete independence is an illusion. We remain dependent on God for every breath, every heartbeat, every moment. We’re called to interdependence within the body of Christ, not radical independence.

The FIRE movement subtly promotes self-sufficiency as the highest good. But Scripture consistently warns against trusting in riches or thinking we can secure our own future apart from God.

Consider Jesus’ parable of the rich fool (Luke 12:13-21). The man accumulated great wealth, said to himself, “Soul, you have ample goods laid up for many years; relax, eat, drink, be merry,” and planned his comfortable retirement. God called him a fool that very night.

His error wasn’t saving or planning; it was treating financial independence as his ultimate security and self-focused leisure as his ultimate purpose. Sound familiar?

Problem 2: Work as a curse to escape

FIRE literature consistently frames work as something to escape from. The goal is to accumulate enough money so you never have to work for income again. Work is portrayed as a necessary evil during your accumulation phase, but the dream is to be done with it forever.

FIRE philosophy: “Retire as early as possible so you can finally start living. Work is what you do until you have enough money to stop.”

Biblical reality: Work is a gift from God, instituted before the Fall (Genesis 2:15). While sin has made work toilsome, work itself remains good—a way we image God, serve others, and fulfill our calling.

“Whatever you do, work heartily, as for the Lord and not for men.” (Colossians 3:23)

Notice Paul doesn’t say, “Whatever you do, work grudgingly until you can retire early and do what you really want.” He presents work as an act of worship, something done for the Lord, regardless of whether we’re paid for it.

The FIRE movement divorces work from calling. It reduces work to merely a means of generating income. Once you don’t need the income, you’re done with work.

But what if your work—even your paid employment—is part of how God has called you to serve Him and others? What if the problem isn’t work itself but our attitudes toward work, our choice of work, or our work-life balance?

Problem 3: Retirement as an escape rather than mission

FIRE adherents typically envision retirement as freedom to pursue hobbies, travel, leisure, and personal interests. Those things aren’t bad in themselves—in moderation, of course. The problem is that there’s no mention of serving God, advancing His kingdom, or using time and resources for others. It’s fundamentally self-focused.

FIRE philosophy: “I’ll spend my retirement traveling, pursuing hobbies, doing whatever I want. I’ve earned it. It’s my time now.”

Biblical reality: “They still bear fruit in old age; they are ever full of sap and green” (Psalm 92:14). Our calling doesn’t end when we achieve financial independence. God’s purpose for our lives continues until we die.

As John Piper challenges us: “The Bible has no conception of what Americans typically think of as retirement—that is, working for forty or fifty years and then playing for fifteen or twenty years.”

If you retire at 35 and spend the next 50-60 years primarily focused on personal leisure, travel, and hobbies with no significant investment in kingdom work, how is that faithful stewardship of all the gifts (time, talent, and treasure) that God has given you?

Even secular observers recognize the emptiness here. Many FIRE retirees discover that endless leisure isn’t fulfilling. Within a few years, many start businesses, take on consulting work, volunteer extensively, or return to traditional employment. Why? Because humans need purpose, productivity, and contribution to flourish.

Problem 4: Misplaced security

FIRE creates a dangerously specific “magic number.” Once you hit 25-30 times your annual expenses, you’re “financially independent” and “secure.”

But what if markets crash 40% the year after you retire? What if inflation runs higher than expected? What if healthcare costs explode? What if you live to 105? What if your investments underperform?

FIRE philosophy: “Hit your number and you’re set. You’ve achieved security.”

Biblical reality: Security is found in God alone, never in wealth. “Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven” (Matthew 6:19-20).

The FIRE community acknowledges these risks intellectually but often proceeds as if achieving “the number” provides real security. It doesn’t. It provides a cushion, a resource, a tool—but never security itself.

Beware the subtle shift

Here’s what makes this dangerous: The subtle shift from faithful stewardship to financial idolatry often occurs gradually, almost imperceptibly. It typically begins with good things: legitimate, biblical motivations aligned with the Self-Sustaining Principle. There’s nothing wrong with any of them.

Then, almost unnoticed, the focus gradually shifts. You may have thoughts such as: “Once I hit my number, I’ll finally be secure,” “Financial independence means I’ll be truly free,” or “My goal is to never have to work for money again.”

Notice the difference? You begin focused on responsibility, service, and sound planning. But then you end up focused on self-sufficiency, personal security, and freedom from obligation.

Here are warning signs that your pursuit of self-sustainability has become unhealthy:

Your “number” keeps rising. First, it was $500,000. Then $750,000. Now $1 million. Somehow, it’s never quite enough. This betrays anxiety and misplaced security.

Financial planning consumes more time and mental energy than prayer or Scripture. You check your portfolio daily, read financial blogs constantly, run endless calculations, and think about money all the time.

You resent giving because it delays financial independence. Tithing or generous giving feels like an obstacle to your goal rather than a joyful response to God’s provision.

You’ve stopped enjoying your work entirely. Everything is viewed through the lens of “how many more years until I can quit.” You’re no longer present in your current calling.

You plan your entire “retired” life around personal interests. Travel, hobbies, leisure, personal projects—but nothing about serving God, His church, or others in significant ways.

Market fluctuations create disproportionate anxiety. A 10% portfolio drop doesn’t just concern you—it devastates you, revealing where your security actually rests.

You view everyone still working as somehow less free or enlightened. You’ve developed a subtle superiority complex around your pursuit of FIRE.

You’ve sacrificed important relationships or opportunities to maximize savings. Skipping family gatherings to avoid travel costs, saying no to mission trips because they’d slow your progress, and missing your child’s events because you won’t reduce working hours.

You’re less generous now than you were before starting your FIRE journey. Instead of increasing giving as income grows, you’ve reduced it to maximize your savings rate.

You think about retirement more than you think about Jesus. Your daydreams focus on “the day I’m financially independent” rather than growing in Christ or serving His kingdom.

These symptoms reveal that financial independence has become an idol—something you’re depending on for security, identity, and purpose that should come only from God.

When financial independence makes biblical sense

Before you think I’m entirely against building substantial resources that could enable early retirement from paid work, let me clarify: There are legitimate, biblical reasons to pursue what might look like early financial independence.

The critical difference between faithful stewardship and the FIRE trap comes down to one question: Is financial independence your goal or your tool?

If pursuing financial independence is about escaping work, maximizing personal freedom, or enjoying leisure without constraints, you’ve fallen into the FIRE trap. But if it’s a means to serve overseas missions, care for aging parents, transition to a lower-paid ministry, launch a kingdom-focused enterprise, address health limitations, or leave a toxic work environment, it could be faithful stewardship.

What distinguishes these legitimate use cases? In every scenario, financial independence serves a larger kingdom purpose. It increases your capacity for ministry rather than maximizing personal leisure. And critically, reaching “financial independence” doesn’t mean stopping productive work; it means gaining freedom to work in ways that might not generate income or generate less income than before. You’re not retiring FROM your calling—you’re using resources to pursue it more fully.

The heart question remains: Are you building resources to serve better, or to escape serving others? Your answer reveals whether you’re pursuing biblical self-sustainability or secular self-sufficiency.

The Promised Land of Retirement (2020) uses the analogy of Israel’s journey to the Promised Land from Joshua 1 to draw eight parallels to help Christians think more biblically about retirement. Just as Israel faced a wilderness before reaching Canaan and some never entered at all, our journey to retirement involves difficulties beyond our control, and many won’t reach their envisioned retirement due to death or circumstances. The Promised Land was God’s sovereign choice, not Israel’s; similarly, our retirement may look different from what we planned, requiring us to submit to God’s purposes. Most importantly, the land was meant to bless all nations through Israel, just as retirement should be a time to bless others through service rather than mere self-enjoyment.

Imagining Your Retirement (2019) explores how our God-given imaginations, powerful tools for envisioning possible futures, have fallen and must be guided by Scripture to avoid leading us astray, especially when we dream about retirement. While surveys show most people imagine retirement focused on security, flexibility, relaxation, travel, and leisure (spending 35% of time traveling, 21% with family, 14% just relaxing), alarmingly few Christians envision a retirement that glorifies God, and even fewer have adequate financial preparation.

Church Fathers, Catechisms, and Retirement Stewardship (2017) examines timeless teachings on money and stewardship from church fathers (Augustine, Luther, Calvin, Edwards, Spurgeon) and Reformed catechisms, finding surprisingly consistent themes throughout 2,000 years of church history: moderation, self-denial, charity, and condemnation of luxury and greed—teachings that contrast sharply with today’s prosperity gospel yet remain desperately needed. The church fathers, despite living in far harder times with minimal possessions, still warned against the power of money and taught that wealth should serve God’s kingdom and help others, not just benefit ourselves. The Westminster Larger Catechism’s treatment of the eighth commandment (“you shall not steal”) provides eight practical principles: giving and lending freely, moderating desires for worldly goods, exercising prudent stewardship, working hard, practicing frugality without greed, avoiding lawsuits, refusing to co-sign loans, and acquiring wealth honestly to help others and build God’s kingdom.

Some practical guardrails

How do you plan wisely and build adequate retirement resources without crossing the line into idolatry? Here are five helpful guardrails:

Guardrail 1: Set an “enough” line

One of the most insidious aspects of wealth accumulation is that “enough” keeps moving. First, you need $500,000. Then $750,000 feels safer. Before long, $1 million seems barely adequate, and $2 million would really provide security.

The guardrail: Prayerfully determine a specific, realistic “enough” number based on actual needs, not inflated lifestyle aspirations or anxiety. Write it down. When you reach it, STOP accumulating and shift to increased generosity and service.

This doesn’t mean you stop managing money wisely or that your portfolio won’t grow. It means you stop letting accumulation drive your decisions.

Practical step: Calculate your actual retirement income need using the methods in our previous articles. Add a reasonable buffer (20-30%). That’s your target. When you reach it, focus your energy elsewhere.

Guardrail 2: Maintain generosity

If your pursuit of financial independence requires cutting giving to achieve your goals faster, you’ve revealed an idol.

The guardrail: Commit to a minimum giving percentage (10% is a good floor, but giving should ideally increase as income grows) that continues regardless of your savings phase. Giving is not something to defer until after you achieve financial independence—it’s the heart of stewardship at every stage.

“Honor the Lord with your wealth and with the firstfruits of all your produce” (Proverbs 3:9)

Notice it doesn’t say, “Honor the Lord with your wealth after you’ve saved enough for early retirement.” First fruits means first, not leftovers after you’ve hit your number.

Practical step: Set up automatic giving that happens before you see the money. If you’re aggressively saving 30-40% of income, make sure 10-15% is also going to kingdom work. If you can’t afford both, you’re pursuing FIRE, not stewardship.

Guardrail 3: Regularly examine your heart

This is the most important guardrail. You must regularly and honestly assess your motivations.

Questions to ask yourself monthly or quarterly:

• When I imagine reaching financial independence, what excites me most? Freedom from work, or freedom to serve?

• Where does my mind wander during idle moments—to my portfolio balance or to God’s kingdom purposes?

• How do I feel when I have to dip into savings for an unexpected expense or a generous opportunity? Anxious and resentful, or peaceful and trusting?

• Am I becoming more generous or less generous as I accumulate wealth?

• Can I articulate specifically how I plan to serve God and others once I’m “financially independent”? Or is my vision mostly travel, hobbies, and leisure?

• If God called me to give away half my savings tomorrow for kingdom purposes, could I do it joyfully?

• How much do I think about money compared to how much I think about Christ?

• Has my pursuit of financial goals improved or harmed my relationships with family, church, and God?

Be honest. If you find yourself making excuses, rationalizing, or getting defensive, you may be crossing the line.

Practical step: Share these questions with a trusted friend, your spouse, or a small group, and ask them to hold you accountable. Give them permission to call out warning signs they observe.

Guardrail 4: Don’t retire FROM your calling

Even if you transition out of paid employment, continue productive work that serves God and others. Biblical stewardship means working (in some form) as long as you’re able.

The guardrail: Before leaving paid work, answer this question clearly: “What will I DO with my time and energy that serves God’s kingdom and others’ good?”

If your answer is primarily about what you’ll stop doing rather than what you’ll start doing, you’re not ready to retire. Some better answers could be, “I’ll serve as a missionary in [location],” “I’ll start a ministry to [group], “I’ll volunteer at [organization] 20 hours weekly,” or “I’ll write/teach/counsel others in [area].”

If your answers are more like, “I’ll finally relax and do what I want” or “I’ll travel and pursue my hobbies,” you may be headed in the wrong direction.

Practical step: Before retiring from paid work, have concrete plans for at least 20 hours weekly of productive service (paid or unpaid) that uses your gifts to bless others.

Guardrail 5: Hold money loosely

Your financial plan can collapse tomorrow through market crashes, health crises, economic changes, or countless other factors beyond your control. That possibility should concern you (which is why we take steps to mitigate certain risks), but if it terrifies you, your security is probably misplaced.

The guardrail: Regularly remind yourself that everything you have belongs to God, can be taken away in an instant, and was never your true security anyway.

Do not toil to acquire wealth; be discerning enough to desist. When your eyes light on it, it is gone, for suddenly it takes wings to itself, flying like an eagle toward heaven. (Proverbs 23:4-5, ESV)

Practical step: Regularly meditate on this hypothetical: “Lord, if I lost everything tomorrow—job, savings, house—and had to start over, would my faith remain strong? Would I still trust You? Would I still serve You?” If that thought is unbearable, your security needs adjusting.

Contentment With Retirement Stewardship is Great Gain (2017) addresses why Christians struggle with contentment (trusting in possessions, cultural influence, love of money, not seeking God’s Kingdom first) and balances two biblical truths: God’s promise to care for His children and our responsibility to plan wisely for retirement. Without contentment, we can’t live below our means, give generously, or save prudently—discontentment leads to overspending, debt, and poor financial decisions driven by restlessness rather than wisdom. True contentment doesn’t come from accumulating wealth (even though 89% of Americans have a standard of living above the global middle class), but from pursuing God Himself through worship, prayer, gratitude, and recognizing that we already have the greatest treasure—Christ, forgiveness, and eternal life. As John Piper wrote, “The greatest commandment implies: ‘Thou shalt be happy in God.'”

Questions to ask yourself

If you’re considering pursuing early financial independence or aggressive retirement saving, wrestle with these questions:

1. Is this even feasible for you?

Most middle-income earners cannot achieve FIRE-level retirement without extreme lifestyle restrictions that may strain relationships, harm health, or compromise present stewardship responsibilities.

Be honest: Can you actually save 50-70% of your income without neglecting current obligations? Or are you chasing an unrealistic goal that creates frustration and anxiety?

For many, the wise path is steady saving (10-20% of income), reasonable spending, consistent giving, and retirement at a traditional age. That’s not failure—that’s faithful stewardship within your circumstances.

2. Why do you want early financial independence?

Dig deep and ask yourself: Are you running FROM something or TO something? If your primary motivation is escaping a job you hate, exhaustion from work itself, desire for unconstrained personal freedom, or burnout—these are red flags. You’re running from problems rather than toward purpose.

But if you’re running TO something—serving in missions, starting a ministry, caring for family members, or using your skills in lower-paid kingdom work—that’s potentially healthy. The key difference: If you’re primarily running from rather than to, fix what’s wrong about your current situation instead of fantasizing about financial escape.

Address the root problem—whether it’s a wrong job fit, poor boundaries, or misplaced expectations—rather than assuming financial independence will solve it.

3. What about generous giving?

Can you simultaneously pursue aggressive savings AND maintain generous giving? Or does reaching financial independence faster require cutting giving?

If you can’t do both, you need to reconsider your approach. Giving isn’t something to defer until after you’re financially secure—it’s the heart expression of stewardship at every stage.

4. How will you spend your time?

If you achieved financial independence tomorrow, what specifically would you do with your time? Can you articulate it clearly?

If your answer is vague (“I’ll figure it out,” “I’ll relax,” “I’ll travel”), you’re not ready to stop working. Humans need purpose, productivity, and contribution to flourish.

If you have specific plans for service, ministry, family care, or productive work that just doesn’t pay much, that’s different.

5. Do you need financial independence or life balance?

Sometimes what people really need isn’t financial independence but better life balance in their current circumstances.

Would reducing work hours, changing jobs, setting better boundaries, or simplifying your lifestyle address what’s really bothering you—without requiring years of extreme saving to “escape”?

6. What if you already “retired early”?

If you’ve already achieved financial independence and left traditional employment, the question is: Now what?

Are you using your time, freedom, and resources to serve God and others? Or have you settled into comfortable leisure?

As John Piper warns: “Don’t waste your retirement.” Whether you retired at 35, 55, or 75, faithful stewardship means bearing fruit in whatever season you’re in.

The heart of the matter

Let me close with the fundamental issue: Where does your security rest?

The FIRE movement, despite its appeal and practical wisdom about frugality and intentional living, ultimately promotes misplaced security. It says: “Hit your number, and you’re safe. Achieve financial independence, and you’re free—free from work and free to do what you please.”

But Jesus says:

Do not be anxious about your life, what you will eat or what you will drink, nor about your body, what you will put on… But seek first the kingdom of God and his righteousness, and all these things will be added to you. (Matthew 6:25, 33)

And:

Take care, and be on your guard against all covetousness, for one’s life does not consist in the abundance of his possessions. (Luke 12:15, ESV)

Your life—your security, your purpose, your significance—doesn’t consist of financial independence. It consists in knowing Christ and serving His kingdom.

The Self-Sustaining Principle calls us to plan wisely, save diligently, and live responsibly. But it does NOT call us to make financial independence our ultimate goal, our security, or our salvation.

Financial independence pursued as an idol will leave you empty, anxious, and ultimately disappointed. Financial sustainability pursued as faithful stewardship will set you free—free to serve, free to give, free to follow God’s calling regardless of paycheck, free to finish well.

That’s the critical difference.

For a fortunate few, their retirement income may consist of more than one “guaranteed” income course (I use the term “guaranteed” loosely). Some will have a company pension in addition to Social Security, which together will provide most, if not all, of the income you’ll need in retirement.

If you’re fortunate enough to have a traditional pension, you face one of retirement’s most consequential decisions: how to take your benefit. For many retirees, this means choosing between a lifetime monthly income stream and a lump-sum payment. This decision deserves careful consideration through the lens of wise stewardship.

Understanding your options

Most pension plans offer several choices at retirement:

Monthly pension payments provide guaranteed income for life, often with options to continue payments to a surviving spouse. You might choose a single life annuity (highest payment, stops at your death), a joint and survivor annuity (reduced payment, continues to your spouse), or a period certain option (guarantees payments for a set number of years).

Lump sum payments give you the entire present value of your future pension payments as a one-time distribution. You can roll this into an IRA and manage it yourself, gaining control, but also accepting all investment and longevity risk the pension would have covered.

Some plans offer a hybrid approach or partial lump-sum payments, but the core decision usually comes down to guaranteed income or personal control.

The case for monthly payments

Taking your pension as a monthly income has significant advantages from a stewardship perspective:

Longevity protection. If you live to 95, your pension continues to pay. You can’t outlive it. This addresses one of retirement’s greatest risks—living longer than your money lasts. That’s stewardship of God’s provision, not just financial planning.

Simplicity and peace. You don’t have to manage investments, worry about sequence-of-returns risk, or wonder if you’re withdrawing too much. The check arrives every month. For many retirees, this simplicity is worth more than theoretical portfolio optimization.

Inflation protection (sometimes). Some pensions include cost-of-living adjustments, though many don’t. Even without COLA, a pension provides a stable foundation you can build around.

Spousal security. Joint and survivor options ensure your spouse continues receiving income after your death, protecting the more vulnerable party in your one-flesh union.

The monthly pension option essentially gives you a personal annuity without fees, underwriting costs, or insurance company profit margins. That’s often hard to beat.

The case for lump sums

Taking the lump sum isn’t necessarily poor stewardship; it can make sense in specific circumstances:

Serious health concerns. If you have reason to believe you won’t live long, the lump sum might provide more total value to your heirs than a few years of monthly payments would.

Legacy desires. Monthly payments typically stop at death (or after your spouse’s death). A lump-sum rollover to an IRA can be left to children or charitable causes. If leaving an inheritance is important to your stewardship vision, this matters.

Pension plan concerns. While rare, some pension plans are underfunded or at risk. If your employer is in serious financial trouble and the plan isn’t fully insured by the PBGC (Pension Benefit Guaranty Corporation), taking the lump sum removes that risk.

You’re an experienced investor. If you have the knowledge, discipline, and other resources to manage the money well, you might generate returns that exceed the pension’s implicit rate of return, while maintaining the flexibility the pension doesn’t offer.

Flexibility needs. Life happens. A lump sum gives you access to larger amounts for emergencies, opportunities, or changing circumstances. Pensions don’t.

Running the numbers

At it’s core, this decision is a math problem that has to take into account a lot of variables, some of which are unknown. Here’s a suggested approach:

Calculate the implied hurdle rate. Divide your annual pension amount by the lump sum offer. If your pension would pay $30,000 per year and the lump sum is $500,000, that simple division gives you 6% ($30,000 ÷ $500,000). But it’s important to understand what that number actually means, and also what it doesn’t.

This isn’t really an interest rate in the traditional sense. The pension isn’t paying you interest on a $500,000 balance the way a bond or CD would. Rather, this calculation reveals the breakeven return — sometimes called a hurdle rate — that your invested lump sum would need to generate annually just to match the pension’s income stream. Think of it as the minimum investment performance required to make the lump sum choice financially equivalent.

That distinction matters for two reasons. First, a true interest-bearing instrument preserves your principal; you collect interest and the underlying balance remains intact. A pension, by contrast, pays you a stream of income that includes both a return on capital and a return of capital over your lifetime. Second, the pension’s payments are guaranteed for life regardless of market conditions; the lump sum’s ability to replicate that income depends entirely on investment performance, sequence of returns, and how long you live.

So the more precise question isn’t simply “Can I earn 6% annually?” It’s: “Can I generate $30,000 per year from this $500,000 — for as long as I live — without running out of money, after taxes and fees?”

That perspective leads naturally to a break-even analysis. How many years of pension payments would it take to simply equal the lump sum? In this example, at $30,000 per year, you’d cross the $500,000 threshold in roughly 17 years. If you live past that point, the monthly pension wins mathematically — and the longer you live beyond it, the wider that advantage grows.

Conversely, if you die well short of that horizon, the lump sum would have left more for your heirs. Break-even analysis doesn’t resolve the decision, but it clarifies the stakes on each side.

Taxes add another layer of complexity that the simple 6% calculation obscures. Both options have tax implications, but they work very differently. Monthly pension payments are taxed as ordinary income in the year you receive them — predictable, but with limited flexibility. A lump sum rolled over into a traditional IRA is tax-deferred until you take distributions, which gives you more control over the timing and size of your taxable income in any given year.

That flexibility can be genuinely valuable, particularly if you have years in early retirement when your income — and therefore your tax bracket — is lower. But control also means responsibility. Unlike a pension that manages disbursements for you, an IRA puts the tax planning squarely on your shoulders.

Finally, none of these calculations exist in a vacuum. The right answer depends heavily on what else you have. If you enter retirement with substantial other assets, a solid Social Security benefit, and perhaps a working spouse, you have meaningful margin to absorb risk in your pension decision — the lump sum’s potential upside may be worth pursuing. But if this pension represents the primary foundation of your retirement security, that changes everything.

Taking a lump sum and subjecting your core income to market volatility is a very different proposition when there’s no financial cushion beneath it. In that case, the pension’s guaranteed income isn’t just a nice feature — it may be the most important one.

The stewardship questions

Here’s what many financial articles miss: this isn’t just about maximizing wealth; it’s also about wise and faithful stewardship of what God has provided.

What is this pension for? Is it to provide a stable income so you can serve in retirement without financial anxiety? Then take the monthly payments. Is it seed capital for a ministry vision or legacy plan? Then perhaps the lump sum serves that purpose.

What are you capable of managing? Stewardship means knowing your limitations. If investment management isn’t your area of expertise, taking a lump sum and trying to replicate what the pension would have done may be poor stewardship—even if it looks more sophisticated.

What does your spouse need? For married couples, this decision affects both of you. A joint and survivor pension might provide less monthly income than a single life option, but it protects your spouse. That’s not just smart planning—it’s loving provision.

What about contentment? Chasing maximum theoretical returns from a lump sum when a pension would meet your needs might reflect discontent more than wisdom. Paul’s words about godliness with contentment being a great gain (1 Timothy 6:6) also apply to pension decisions.

Most people should take the pension

Here’s my bias: most people are probably better off taking the monthly pension payments. The exception would be if your company’s plan is underfunded, and you might be better off in the long run if you “take the money and run.”

Why? Most retirees underestimate longevity risk, overestimate their investment skill, and discover that the peace of guaranteed income is worth more than they thought. The theoretical benefits of lump sum control often don’t materialize in practice.

Unless you have specific, compelling reasons to take the lump sum—poor health, serious pension plan risk, substantial other assets, or genuine investment expertise—the pension option usually serves retirees better.

Making your decision

Here’s a process to work through:

1. Get the facts. Understand exactly what each option provides, including survivor benefits, COLA adjustments, and any period-certain features.

2. Run multiple scenarios. What happens if you live to 85? To 95? What if your spouse outlives you by a decade?

3. Assess your total picture. Consider this pension alongside Social Security, other retirement accounts, and any part-time work income.

4. Consult wisely. Talk to a fee-only financial advisor who doesn’t benefit from your decision either way. Pray about it. Discuss it thoroughly with your spouse.

5. Choose peace over optimization. If you’re torn between two options that both work mathematically, choose the one that lets you sleep at night.

Remember, this decision is generally irrevocable. You can’t change your mind next year if the markets boom or tank. That permanence demands careful consideration.

The bigger picture

Your pension decision is one piece of your overall retirement stewardship plan. It interacts with Social Security claiming strategy, withdrawal rates from other accounts, healthcare planning, and legacy intentions.

Don’t isolate this decision from the broader context of your retirement income plan. And don’t let fear of making the “wrong” choice paralyze you. Seek wisdom, do your homework, and then decide with confidence that you’re being faithful with what God has entrusted to you.