A Real-World Look at Retirement Planning and Real Estate Strategies

When I sit down with clients like George and Weezy, I’m reminded that retirement planning isn’t just about numbers it’s about timing, lifestyle, and long-term strategy. Their story highlights many of the decisions pre-retirees face: when to stop working, how to manage taxes, and whether real estate should play a role in a diversified portfolio.

George and Weezy want to retire by June 30, 2026, or earlier. Weezy plans to keep working for a while longer, partly to cover healthcare benefits that cost around $400 a month. On paper, their finances are strong. George’s non-qualified deferred compensation plan holds $1.8 million today and is projected to grow to $2.2 million by retirement, paying $220,000 annually for 10 years starting in 2027. On top of that, he’ll receive $60,000 per year in long-term incentive payments for three years. Together with their IRAs, 401(k), and a taxable brokerage account worth $880,000, they’ve built a retirement nest egg many would envy.

Their goal is to spend $15,000 per month in today’s dollars, not including their mortgage which they plan to pay off before retiring. Social Security adds another layer of security, with projected benefits of $3,600 a month for George and $2,000 for Weezy at full retirement age, increasing further if they wait until 70. When we ran the numbers, it became clear they could retire earlier than planned. Their deferred compensation and investment accounts not only cover their needs but will likely keep growing for decades.

Tax Diversification and Roth Conversions

One concern is that most of their savings sit in pre-tax accounts, with only $50,000 in Roth dollars. That means future required minimum distributions (RMDs) could trigger hefty tax bills. By using Roth conversions during retirement especially in years when their tax bracket is temporarily lower they can reduce future liabilities and build a more balanced tax strategy.

Budgeting and Lifestyle Choices

We also questioned whether their estimated spending of $180,000 per year is accurate, given their current household income of $600,000–$700,000 and high savings rate. This is a reminder to anyone preparing for retirement: don’t just guess. Track your spending closely to make sure your retirement budget matches your actual lifestyle. The transition isn’t just about financial security it’s also about creating meaningful activities to avoid boredom or lack of purpose once the career chapter ends.

Real Estate Strategies for Leon

We also spoke with Leon, who is in his early 40s and exploring real estate investment. He wants exposure to property income without being a landlord. For someone like him, I recommend REIT ETFs. They’re liquid, diversified, and easy to buy and sell. Starting with a 5-10% allocation can add real estate exposure without locking up capital. Other options, like non-traded REITs or Delaware Statutory Trusts (DSTs), may work for some investors but come with higher fees and less transparency. The key is aligning any real estate decision with the rest of the portfolio and not forgetting that a primary residence is already a big real estate investment.

Key Takeaways

George and Weezy’s plan shows that with disciplined saving, diversified accounts, and smart use of Social Security, early retirement is possible. But the real lesson is this: retirement planning isn’t just about hitting a dollar target. It’s about creating a sustainable strategy that balances taxes, lifestyle, and long-term goals. For Leon and others still building wealth, adding diversified real estate exposure can strengthen a portfolio without the headaches of direct property management.

Retirement planning is part math, part mindset and the earlier you align both, the smoother your transition will be.

Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.

IMPORTANT DISCLOSURES:

• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.

• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.