Decumulation is the phase of your financial life when you shift from building wealth to spending it down—converting your accumulated retirement savings into income that supports your lifestyle. After decades of saving and investing (the accumulation phase), decumulation is when you finally get to use that money to fund your retirement years.

This transition isn't as simple as just withdrawing money whenever you need it. Strategic decumulation involves deciding which accounts to tap first (taxable, tax-deferred, or tax-free), how much to withdraw each year to avoid running out of money too soon, how to manage investment risk when you can't wait out market downturns, and how to coordinate your withdrawals with other income sources like Social Security and pensions.

The challenge of decumulation is that you're navigating several unknowns at once: how long you'll live, what investment returns you'll experience, how inflation will affect your purchasing power, and what unexpected expenses might arise. Good decumulation planning helps ensure your money lasts as long as you do while still letting you enjoy the retirement you've worked so hard to reach. This is where guaranteed income sources like annuities or Social Security become valuable—they remove some of the guesswork and provide a stable foundation.