Getting ready to retire can bring a huge shift in your life.

At the same time, you’re making a transition from saving to spending your savings. This raises more questions, such as:

• How do I create a stable, tax-efficient income after I retire?

• How do I create enough income to last my whole lifetime?

In this article, we explore three ways you can do both.

You could adopt one or all of these approaches as you get ready for and enjoy your retirement.

Bucket Portfolios

With this approach, you divide your portfolio into different time horizons or buckets. You set up a short-term bucket that holds a number of years of income in relatively safe investments. You can then use your other buckets to pursue different levels of growth. Over time, you draw from your longer-term buckets to replenish the short-term bucket.

Since a portion of your portfolio is always focused on growth, a bucket strategy can increase your confidence that you’ll have enough income to last.

Retirement Portfolio Solutions

Retirement portfolio solutions are managed for you by a team of fund managers. They invest your savings in a carefully selected mix of investments that will be adjusted over time as markets change. The goal here is to balance your need for tax efficient, regular cash flow in retirement while growing the nest egg along the way.

You can easily set up regular withdrawals on a schedule of your liking - weekly, monthly, quarterly, semi-annually, or annually.

Distributions from these funds are typically tax efficient. A portion of the distribution is usually a return of capital,a returnto the investor of their own initial investment.

A ROC is not taxable in the year you receive it, but does increase capital gains in the year you sell the investment.

Compare the strategies

Choosing an approach that fits your unique needs will help you stick with your plan.

Consider these three factors to get started.

1. How will you transition to creating your retirement income?

To determine the best approach for you, ask yourself:

• How much income will you need and for how many years?
• Will you still need to see your investments grow in retirement? What is a good annual growth target for you?
• Which investments will you continue to hold – while ensuring you stay within your comfort level for uncertainty and risk?
• What are the tax consequences of selling investments as you retire?
• Do your current investments offer a T Series that enables a smooth transition to retirement income?

2. Are you able to adjust your income over the years, as needed?

All three strategies allow you to adapt your income. You can also easily set up regular, automatic withdrawals.

However, also consider:

• With bucket portfolios: watch the overall risk level of your portfolio as you move assets from one bucket to another. Be sure to maintain a level of risk that’s right for you.
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• With retirement portfolio and managed cash flow solutions: monitor how much income you are withdrawing each year. You want to ensure you can sustain your income over many years. You may also need to sell units if you have a higher withdrawal rate.

3. Will you need to rebalance your portfolio or is it done for you?

Sometimes changes in markets may make it necessary to review and rebalance your investments.

For example, if equity markets rise, you may have more exposure to stocks than you originally planned. This can raise the level of risk in your portfolio. Or, if you sell equity mutual funds or stocks to create cash, this can tip your level of risk in the other direction.

Proper planning is key

Each of these strategies require an accurate estimate of your expenses in retirement and a sustainable withdrawal rate. Also remember that health changes can add unexpected costs to your budget.