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Me-First Rule of Retirement Spending: Secure Your Essentials and Protect Your Income

Protect your Income with the Me-First Rule of Retirement Spending

Retirement should be a time to relax and enjoy the rewards of your hard work. But one common concern for many retirees is: What if I run out of money? Market fluctuations, rising costs, and longer life expectancies can make even a well-planned retirement feel uncertain. To address these concerns, focusing on guaranteed retirement income can provide security and peace of mind.

The Me-First rule of retirement spending, also called the flooring method, is a practical way to reduce that worry. This strategy focuses on guaranteed retirement income for essential expenses, ensuring your guaranteed retirement income covers all necessary costs before spending on discretionary items. By putting your essentials first, you can enjoy retirement with confidence and peace of mind. (Kiplinger, 2025)

What Is the Me-First Method in Retirement?

The Me-First method ensures that your must-have expenses — housing, healthcare, groceries, insurance, and transportation — are covered by reliable income streams. Once those essentials are secured, the remaining funds can be used for discretionary spending, travel, hobbies, or investing.

By prioritizing your guaranteed retirement income, you can navigate the complexities of retirement planning more effectively.

Think of it as building a financial foundation. Without a solid base, market volatility or unexpected expenses can create unnecessary stress. By securing your essentials first, you create a floor that protects your retirement lifestyle.

Understanding Guaranteed Retirement Income

Understanding guaranteed retirement income is crucial for planning your financial future. This ensures that your daily needs are met, allowing you to enjoy your retirement years without financial strain.

How the Me-First Strategy Works

Here’s how to implement the Me-First rule in your retirement income strategy:

1. Identify guaranteed income sources: Social Security, pensions, and certain annuities can provide reliable monthly income.

2. Calculate essential expenses: Make a list of your basic monthly needs — housing, healthcare, food, insurance, and transportation

3. Cover any gaps: If guaranteed income doesn’t fully cover essentials, consider products like annuity income streams or a bond ladder to fill the difference.

4. Allocate remaining funds: Once essentials are covered, remaining assets can be used for discretionary spending or growth-oriented investments.

This method helps retirees know exactly how much money is needed for essentials and reduces stress during market downturns.

Benefits of the Me-First Rule for Retirees

    • Peace of mind: Essential expenses are covered, no matter market fluctuations.

    • Budget clarity: You can see exactly what income is needed for your basic living expenses.

    • Reduced emotional decisions: With your essentials secured, you’re less likely to make panic-driven financial choices during market volatility.

    • Flexibility for the rest of your money: Discretionary funds can be used for travel, hobbies, or legacy planning.

Considerations and Drawbacks

By ensuring a reliable stream of guaranteed retirement income, retirees can feel secure in their financial decisions, making it easier to manage expenses and enjoy life.

While the Me-First strategy offers security, it’s not without trade-offs:

    • Some guaranteed income products, like variable annuities, may have fees

    • Certain products don’t adjust for inflation, meaning purchasing power could decline over time unless you purchase cost-of-living options.

    • Once money is committed to a guaranteed income, flexibility is limited, making early withdrawals difficult or costly.

Careful planning with a financial professional can help navigate these challenges. (Kiplinger, 2025)

Is the Me-First Rule Right for You?

The Me-First approach isn’t one-size-fits-all. Retirees with a higher risk tolerance or large portfolios may prioritize growth over guaranteed income. But for those who want financial security, dislike uncertainty, or are concerned about outliving their money, this strategy provides a reliable foundation.

It is especially helpful for retirees concerned about medical costs, supporting dependents, or long-term market volatility.

Building Your Retirement Floor

To implement the Me-First rule:

    • List your essentials — mortgage/rent, insurance, medical expenses, utilities, and groceries.

    • Add up guaranteed income — Social Security, pensions, and annuities.

    • Identify the gap — how much more income is needed to cover essentials.

    • Explore income options — consider annuities, bond ladders, or other guaranteed income solutions.

    • Work with a financial advisor — they can help structure your retirement income strategy effectively.

Bottom Line

The Me-First rule of retirement spending allows you to enjoy retirement confidently. By securing your essential expenses with guaranteed income, you can focus on the lifestyle you’ve dreamed of, without worrying about running out of money.

At Jacobs Financial Services, we help retirees build income strategies that can’t be outlived. If you want to explore how the Me-First rule could work for your retirement, schedule a complimentary retirement review today with Jacobs Financial Services.

Source:
Fuscaldo, Donna. “The ‘Me-First’ Rule of Retirement Spending.” Kiplinger, Sept. 13, 2025.

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