Once upon a time, planning your retirement did not take a degree in finance. However, today, retirement income planning – figuring out how to stream a steady and adequate income during retirement – is proving to be one of the biggest challenges for people looking to retire. Naturally, retiring is a trial if you don’t have big money.

It is not enough to just save for retirement. You need to strategize a way to generate income from these savings. Most people neglect this part which later translates to letdowns caused by unrealistic expectations of what their retirement savings are capable of returning. Retirement income planning is essential and can be done even if concepts sound like rocket science when you go through the figures. If it looks impossible, consult an adviser to help you out. Here are some simple things you can keep in mind to help you through the marshland of retirement income planning:

One, figure out how much income you will need. It is generally understood that about eighty percent of the income you generate before retirement would be a good estimate of how much you would need after retiring. However, when you are about five years away from retirement, it is better to get a more accurate idea of how much you would need. People tend to assume that their expenditures would be lesser post-retirement. However, a survey done by the Employee Benefit Research Institute showed that 40% of retirees spent more than they assumed they would post-retirement.

While trying to estimate the amount you would need, get as many quotes as you can possible from insurers. Payouts from annuities can be anything from 6% to 10% which, while it may not look much on paper, can make a noticeable difference to your retirement income. Getting quotes is quite easy. You can either do it through online sites that sell annuities or from companies like Vanguard, Fidelity and Schwab. Also, when buying an annuity, try investing in installments as opposed to investing it all in one go. Splitting the investments would, for one, reduce chances of the whole amount being paid out at a time when returns are low, causing you to lose out; and, two, will help you gauge your income needs post-retirement better.

Figure out how much of your retirement income you have guaranteed. Nothing like the sense of security you feel when you know exactly how much of your retirement income will be a surefire amount. So guaranteed sources of income like Social Security or a monthly pension will help you plan your retirement income and expenditure better. You can increase your monthly social security income amount if you don’t withdraw your benefits from ages 62 to 70. There are also claiming strategies that you can employ as a married couple to boost your retirement incomes, sometimes, by hundreds and thousands of dollars.

If you find a considerable gap between your guaranteed retirement income and your estimated expenditure for essentials, you can try saving some of the money in an immediate annuity or a longevity annuity for a steady and higher income. When buying an annuity, you rely on the insurer’s ability to make good on his promises. So invest in an insurance company that evidence indicates will deliver on its promises. Also, when investing in annuities, do not put all your eggs in one basket. Spread your money across at least two different, reliable insurance companies to ensure that all your savings aren’t dependent on the outcome of a single annuity. There is also a providence of coverage for your annuity should you limit it to a particular amount per insurer. An extra layer of protection always helps should things go wrong in the first layer.

For retirement income planning be prepared to change your withdrawal amount. Once you figure out how much of guaranteed monthly income is due to you, you can work at withdrawing more, should you need, from your savings. The challenge is to estimate how much you can afford to withdraw. Too much, and you will end up outliving your savings. The rule of the thumb here is 4%. It is generally thought that if you limit your withdrawal to 4% of your savings and make adjustments for inflation annually, you can make your savings last thirty years or so.

However, market conditions tend to fluctuate. So it will be necessary for you to adjust your withdrawal percentage accordingly. If your savings balance dips dangerously thanks to market conditions or because of unforeseen expenses, cut down on withdrawal limits until your savings recover. Of course, should market gains plump up your savings, you will be able to spend more for a while. This part, where you figure out if your current withdrawable rate is sustainable, can be estimated with a retirement calculator of which there are several available online.

Remember, the whole idea of retirement income planning is to outlive your savings while living comfortably enough.