A secure retirement does not happen by accident. It is the result of thoughtful planning, realistic assumptions about the future and ongoing attention to how your money will support you after your working years end.
Whether retirement is a few years away or already underway, having a clear plan can help you feel more confident about what lies ahead.
A retirement plan starts with understanding your current finances and retirement goals, then mapping out how your savings, Social Security and other income sources work together to provide steady income for life. Equally important, it ensures your money lasts so you do not outlive your savings.
Start with your goals and finances
The first step is to define what retirement looks like for you. Think about when you would like to retire, where you want to live and how you plan to spend your time. Your lifestyle choices will shape how much income you need.
Next, take a clear-eyed look at your finances. This includes your savings and investments, expected Social Security benefits, any pensions you may have and other income sources.
Many planners suggest aiming to replace about 70% to 90% of your pre-retirement income, but the right number depends on your personal situation and spending patterns.
It is also helpful to build a detailed retirement budget. Some expenses may go down, such as commuting costs, while others, including health care, vacation and home maintenance, may increase. Understanding these changes ahead of time can help prevent surprises later.
Plan for income, not just savings
As you move closer to retirement, the focus shifts from saving money to generating reliable income from your savings. This is where planning becomes especially important.
One common guideline is the “4% rule,” which suggests withdrawing no more than 4% of your retirement savings each year to reduce the risk of running out of money. While this is only a rule of thumb, it highlights the importance of a sustainable withdrawal rate.
Diversifying income sources can also help. In addition to Social Security, income may come from retirement accounts, pensions, part-time work or investments. Delaying Social Security, if possible, can increase monthly benefits, providing greater long-term stability.
Adjust investments and manage risk
Retirement can last 20 to 30 years or more, so your money still needs room to grow. At the same time, protecting what you have built becomes increasingly important.
Many people gradually shift to a more conservative investment mix as they approach retirement to balance growth potential with stability. Regularly reviewing your investments can help ensure they still align with your goals, risk tolerance and income needs.
It is also wise to maintain a cash buffer for unexpected expenses, such as medical costs or major home repairs, so you are not forced to sell investments at an inopportune time.
Revisit your plan regularly
Life rarely follows a straight line. Health changes, market fluctuations, family needs and shifting priorities can all affect your retirement plan. Reviewing your plan regularly allows you to make adjustments before small issues grow into larger problems.
Seek professional guidance
Retirement planning does not have to be a solo effort. We can help you analyze income and spending scenarios, determine when to claim Social Security and create a strategy to help your money last.
A conversation with your trusted financial advisor can help ensure your retirement plan adapts to change and supports the retirement you envision.
