RETIREMENT PLANNING

Am I on Track for Retirement?

This simple question isn’t always the easiest to answer. There are many variables like investment returns, overall retirement income, spending habits and timing that all play a significant role in retirement readiness. I find that most people are either ahead of where they think or further behind than they realize. But don’t worry. If you’re not quite where you thought you were, there are always things that can be done to help you get on track. Please feel free to check where you stand by clicking on the “Calculate My Readiness” button, and send me an email of your results and/or questions and receive a free personalized interpretation with no commitments attached, no follow-up spam, and absolutely no sales pitch: jfedak@corepln.com

Determine Your Readiness for Retirement

Before you can really put together a retirement plan, it’s best to get a gauge of where you are, what you’ll need for retirement and how much time you have to get there.

Things I like to look at:

Income
Expenses
Savings
Time Horizons

Questions I like to explore:

When do you want to retire?
How much are you saving each year and how much do you currently have saved?
Do you have a rough idea of your monthly spending in retirement?
Have you estimated how much annual fixed income you will have?

Calculations I like to perform:

Once we’ve answered those questions, we can get a clearer picture of your retirement readiness with a few basic calculations.

Estimate your annual spending by averaging your last 10 years annual salary, as most people tend to spend what they make.
From your 10-year average income, we will subtract:

Expected annual Social Security income
Expected annual pension income
Expected side income (side gigs, rentals, dividends, interest)
Retirement savings totals and estimated annual withdrawal potential

This rough calculation gives us an idea of what we will need versus what income we will have annually in retirement.

Now you want to figure out how many years you anticipate spending in retirement. I like to think all fairly healthy clients will live to between 90-95.

Lastly, we need to know what you have saved today across all retirement accounts. This is the reserve, and very likely the most critical part of your preparation. While these assets will likely earn a return over time, many calculators rely heavily on assumed rates of return, which can create a false sense of precision. We intentionally avoid those assumptions here to provide the clarity of where your savings are at this very moment.

Design a Course Toward the Retirement You Want

While this is a helpful starting point, it’s based on assumptions. Your individual health circumstances will eventually change. Other factors like market cycles, retirement spending, and changes in income sources will shift over time.

Let’s talk more about your situation so that we can explore the most accurate possibilities. Ideally, I’d like to create a comprehensive financial plan for you that takes into account additional variables such as planned retirement expenses, taxes, relocation, net worth, and more. Then we can compare multiple scenarios side by side while adjusting different factors to explore and plan for the most likely outcomes.