Why regular checkups matter

A retirement withdrawal plan is not a “set-and-forget” document. Income needs, tax laws, investment returns, health costs and family situations change over time. In my 15 years working with retirees, annual reviews combined with event-driven checkups (market shocks, tax-law changes, health events, or the death of a spouse) produce materially better outcomes than plans left unexamined.

Failing to revisit a withdrawal plan can cause three common problems:

  • Running out of money because withdrawals stay too high after a market decline (sequence-of-returns risk).
  • Paying more in taxes than necessary by missing Roth conversion windows, Qualified Charitable Distributions (QCDs), or timing RMDs.
  • Holding a portfolio that no longer matches withdrawal needs (too aggressive or too conservative).

Authoritative guidance supports these concerns. The IRS continues to publish rules about retirement distributions that affect timing and tax outcomes (see IRS Publication 590‑B) and academic research highlights the sensitivity of retirement outcomes to withdrawal strategy and market timing (Boston College Center for Retirement Research).

Recommended frequency: a pragmatic rule

  • Baseline: Annual review. At minimum, schedule one full checkup every 12 months. This keeps your spending plan, tax moves, and investment glide path aligned with reality.
  • Event-driven review: Revisit immediately after any material change: large portfolio swings (up or down), a major medical event, moving into a higher or lower tax bracket, death of a spouse, starting or stopping part-time work, or changes in Social Security claiming.
  • Near required distribution age: Increase review frequency to quarterly or semi-annually during the 3–5 years bracketing your first RMD (required minimum distribution) year and when considering Roth conversions.

Why annual plus event-driven? Annual checks catch slow-moving trends (inflation creep, retirement spending changes). Event-driven checkups handle abrupt shifts (market drops, new tax laws).

Typical triggers that demand an out-of-cycle review

  • Market decline: A severe market drop in early retirement can make a previously sustainable withdrawal rate unsustainable. Consider pausing discretionary withdrawals, drawing from a cash buffer, or applying temporary percent cuts.
  • Tax-law change: New rules that affect RMDs, tax brackets, or incentives for retirement accounts can change the math for Roth conversions or QCDs (Qualified Charitable Distributions).
  • Health or long-term care needs: Unexpected medical bills often require shifting sources of income and re-evaluating spending and estate plans.
  • Death or divorce: These carry immediate income, tax and beneficiary implications.
  • Social Security or pension elections: Choosing to claim later or to take a lump-sum pension will change portfolio withdrawal needs.

Practical steps for an effective annual checkup

  1. Re-run a cash-flow projection. Update expected spending (including health and housing), expected income sources (Social Security, pension, part‑time work), and expected taxes.
  2. Recalculate your withdrawal rate. Compare current withdrawals to your portfolio value; express withdrawals as a percentage of assets and test stress scenarios. A rule of thumb I use: aim to keep withdrawals near or below a sustainable range (commonly 3–5% depending on your situation) but adjust based on portfolio risk, life expectancy and guaranteed income.
  3. Check your asset allocation. Does your portfolio still match your need for growth versus income and capital preservation? In practice I move clients gradually toward more conservative allocations as guaranteed income increases or as volatility becomes intolerable.
  4. Review tax planning opportunities. Consider partial Roth conversions in low-income years, timing of taxable account withdrawals for capital gains efficiency, and using QCDs for charitable intent (see IRS guidance and QCD rules).
  5. Confirm required minimum distributions. Verify account balances and RMD calculations and consider the timing or aggregation rules that apply to IRAs and employer plans (see FinHelp’s explainer on Required Minimum Distributions for details: Required Minimum Distribution (RMD)).
  6. Revisit beneficiary designations and estate plan documents.
  7. Document guardrails. Create rules that trigger temporary changes, such as reducing withdrawals by X% if the portfolio drops Y%.

Withdrawal strategies that benefit from frequent reviews

  • Fixed-percentage or fixed-dollar rules: If you withdraw a fixed percent or fixed dollar amount each year, you need regular checks to ensure the rule remains sustainable in different market environments.
  • Dynamic rules (bucket strategies, floor-and-ceiling, or guardrail approaches): These benefit from monitoring so you can rebalance between liquidity buckets, trigger reversions to lower withdrawal rates after big losses, or tilt between tax buckets.
  • Tax-aware sequencing: Frequent reviews let you take advantage of low-tax-years for Roth conversions or to harvest losses.

Tax-action checklist for your review

  • Are you at risk of higher tax brackets this year? Re-evaluate withdrawals and Roth conversion amounts.
  • Are you subject to RMDs this year? Confirm amounts and timing to avoid penalties; the IRS has details in Publication 590‑B (2025) (see IRS Pub 590‑B).
  • Could a Qualified Charitable Distribution (QCD) reduce taxable income while satisfying RMDs? (See FinHelp’s related post on RMD strategies: RMD Strategies and Timing: Reducing Taxes on Required Withdrawals).

Example scenarios

1) Early-retiree market shock: Clara retired at 62 and planned 4.5% withdrawals. After a 30% market decline in year 2, her withdrawals consumed a much higher share of remaining assets. We reduced discretionary spending, tapped a cash bucket, and lowered scheduled withdrawals to 3.25% until the portfolio recovered.

2) Tax-opportunity year: Raul had a year of low taxable income between jobs and performed a series of Roth conversions, executed incrementally at his annual checkups. That lowered his future RMDs and created more tax-free income later.

3) Near-RMD pivot: Couples approaching the RMD threshold benefit from semi-annual reviews to coordinate account-level RMDs, consider charitable giving via QCDs, and ensure beneficiary designations remain current. For technical detail on RMDs and coordination across accounts, see FinHelp’s practical guides on Managing Required Minimum Distributions Across Accounts.

Common mistakes to avoid

  • Ignoring taxes: Withdrawals without tax planning often cost more in lifetime taxes than small portfolio allocation changes.
  • Overreacting to short-term market movement: Emotional overreaction can cause selling low; use pre-defined guardrails instead.
  • Waiting too long after a life event: A delayed update after a spouse’s death or a major health diagnosis can miss critical tax or income adjustments.

How I run a retirement checkup in practice

When I meet clients for an annual review, I follow a structured checklist: update cash flows and forecasts, stress-test the withdrawal rate under multiple market scenarios, run tax projections for the next 2–3 years, check RMD exposure, and document any tactical moves (e.g., Roth conversion amounts or temporary withdrawal cuts). The discipline of documenting guardrails reduces impulse decisions during market stress.

Tools and resources

Final checklist (use annually plus after events)

  • Update spending and income forecasts
  • Recalculate withdrawal rate as % of portfolio
  • Reassess asset allocation and guaranteed income options
  • Review tax positions: RMDs, Roth conversion opportunities, QCDs
  • Confirm beneficiaries and estate documents
  • Document guardrails and contingency actions

Professional disclaimer: This article is educational and not individualized financial advice. Tax and distribution rules change—consult a qualified financial planner or tax professional for your specific situation. I base these practices on years of advising retirees and on current IRS guidance (see Publication 590‑B) and published research, but each case varies.

Authoritative sources cited: IRS Publication 590‑B (2025), Boston College Center for Retirement Research, FINRA articles on withdrawal strategies.