It’s simple math. Add up all your expected monthly expenses … utilities, insurance, food, taxes, or in my case, fantasy chess league dues. Then, compare this amount to income from Social Security, a pension (if any), and any other sources of routine income.

If you have more coming in than going out, you’re set for the time being. Naturally, inflation will eventually throw a monkey wrench into the equation. So, even if your income covers expenses today, expect to supplement your fixed income at some point in the future.

If there’s a shortfall, think about your other resources and how you might convert them to predictable monthly income. We’ll cover this in step 3.

If you don’t need income from your employer-sponsored plan right away, you might want to delay taking a distribution. Every payment you get is subject to income tax. But, you can keep on saving – and getting the benefit of any tax-deferred accumulation – until age 70 1/2 when you have to begin taking at least minimum annual distributions.