When most people think about retirement, they picture freedom—freedom to travel, enjoy hobbies, and spend more time with loved ones. But behind those dreams is a big question: Will my savings last?
Even if you’ve built up a solid nest egg, there are a lot of variables that can impact how far it will stretch—things like market swings, unexpected expenses, lifestyle choices, and healthcare costs.
So how can you get a clearer picture of your financial future? It starts by looking beyond surface-level calculations. You’ll want to take a closer look at your ideal retirement lifestyle, the resources you have today, and the income sources you expect to rely on down the road.
Let’s walk through some important steps to help you think this through.
When Do You Want to Retire?
The first thing to consider when deciding how much money you need to save is your age, both now and in retirement. If you wish to retire early, you have fewer years to save for a longer retirement. Additionally, if you begin receiving Social Security payments prior to reaching your full retirement age, you’ll have to account for a lower monthly payout. Did you know that waiting until age 70 to claim benefits can increase your monthly payout significantly compared to claiming at 62?
The state of the stock market can also influence how much money is required and how long it lasts. Of course, you can’t actually predict the state of the stock market when you retire, but it’s still a wise idea to plan for the possibility of retiring in a bear market.
What Type of Lifestyle Do You Envision for Yourself?
Have you given any thought to the kind of retirement lifestyle you want to live? If you’re certain you want to travel, play golf, or spend time with your grandchildren, consider what that entails and the associated expenses.
For example, if you intend to travel, ask yourself the following questions:
- Do I want to travel abroad or domestically?
- How frequently would I like to travel?
- How would I prefer to travel? (e.g., car, airplane, or RV)
- Where would I like to stay? (e.g. a five-star hotel, an Airbnb, or with family members)
- Do I want my family to join me on the trip? Do I plan to cover their expenses too?
- Can I continue to live at my primary home? If so, who can watch my house and maintain it while I’m traveling?
Even if your dream is simply to spend time with your grandchildren, you should still think through the associated costs. To some, spending time with grandkids means babysitting a few times a week. For others, it means footing the bill for various trips for the entire family.
Either way, plan out the specifics of your vision so you can see how much money is needed to make that dream a reality.
What Is Your Current Debt Level?
Let’s talk about another retirement income influencer: debt.
There are two significant drawbacks of taking on debt in retirement:
- It reduces your cash flow for non-essential items like going out to eat, travel, and hobbies.
- It can deplete your retirement funds more quickly, meaning you might eventually run out of money or have to change your lifestyle.
If you carry debt, a smart move is to carefully examine your debt and determine how much cash flow you will need in retirement to cover anticipated expenses.
Before they retire, some people prefer to pay off any high-interest consumer debt. Some even go so far as to pay off their auto loans and mortgage.
Are You Planning to Work in Retirement?
One of the better ways to stay active, keep your mind sharp, and feel purposeful after retirement is to work.
Some retirees decide to pursue consulting as a second career. Others choose to take a part-time, low-stress job and work at a retail store or family office.
Whatever you decide, you won’t need to save as much to live comfortably if you plan to work after retirement.
Consult With a Retirement Planning Professional
Assessing your retirement savings requires a deep dive into your financial situation, lifestyle needs, debt level, and goals.
Your specific goals, such as how much you need to save for your ideal retirement, are our top priority at Tapparo Capital Management. Delegating the specifics of your retirement journey to us relieves you of stress so you can live worry-free knowing we’re handling your money with care and integrity.
To schedule a “Get Acquainted Call” to see if we are a good fit for each other, call 978-887-1121 or email andrew@tapparocapital.com.
About Andy
Andrew Tapparo is a fee-only financial advisor at Tapparo Capital Management, a financial planning firm in Topsfield, MA, helping clients turn their savings into a retirement income that lasts. Inspired by the quote “Choose a job you love, and you will never work a day in your life,” Andy founded Tapparo Capital Management in 1997 with a passion for helping clients enjoy a truly worry-free and fulfilling retirement and experience financial freedom. As a Retirement Income Certified Professional (RICP®), he designs retirement strategies along with sound money management to help clients retire with confidence.
Andy holds a Bachelor of Science in Industrial Engineering from Rochester Institute of Technology in Rochester, New York, and a Master of Science in Finance from Bentley University in Waltham, Massachusetts. Specializing in retirement income planning, Andy completed a comprehensive financial industry education program at The American College of Financial Services and was awarded the Retirement Income Certified Professional® designation. He is frequently quoted in the media as a financial expert.
Andy and his wife, Susan, live in Topsfield, Massachusetts, and have two beautiful daughters. Outside of work, he is an automobile enthusiast, enjoys taking road trips, and loves the Outer Banks of North Carolina. In his spare time, he volunteers with the local high school varsity girl’s basketball team as the team statistician and runs the team’s website. He is passionate about supporting charities that serve our veterans and their families. To learn more about Andy, connect with him on LinkedIn.
