So how can you close the gap? The first step is understanding how much you’ll need.

Calculate Your Retirement Shortfall

Joe Anderson and Alan Copeland walk viewers through a practical formula: subtract your fixed income (such as Social Security or a pension) from your desired annual spending. Multiply that shortfall by 25—or divide it by 4%—to determine the total savings needed. For example, if you need $75,000 per year and expect $50,000 from Social Security, you’ll need $625,000 saved to cover the difference.

Don’t let that number intimidate you. Even starting at age 40 with zero savings, you can get there by saving consistently and investing wisely. Saving $10,000 annually with a 6% return could hit your target by age 66.

Supercharge Your Savings

If you feel behind, you’re not alone—but there are ways to boost your efforts. Aim to save at least 15%–20% of your income. If you’re starting late, you may need to hit closer to 26% of gross income to replace 80% of your earnings in retirement.

Here are a few tactical tips:

• Max out your employer match.
• Set aside 50% of any bonuses.
• Automate your savings increases with every raise.
• Pay yourself first before spending on anything else.

Get Smart About Social Security

Timing your Social Security claim is one of the biggest levers you can pull. While you can start at age 62, doing so means locking in a permanent 30% reduction. Waiting until age 70, on the other hand, boosts your benefit by 8% per year past full retirement age—maximizing your lifetime income.

Joe and Alan also highlighted Social Security’s diminishing role as your income grows. For someone earning $15,000 annually, benefits may replace 80% of income. For those earning $150,000, the replacement rate drops to just 30%. In other words, the more you make, the less you can rely on Social Security alone.

Minimize Taxes in Retirement

Don’t underestimate the impact of taxes on your retirement income. Required minimum distributions (RMDs) from traditional accounts, plus the loss of common deductions in retirement, can push you into a higher tax bracket than you expected.

Alan emphasized the importance of tax diversification. Spreading your savings across tax-deferred (like traditional IRAs), taxable brokerage accounts, and tax-free Roth IRAs gives you more flexibility—and more control—over your tax bill.

Consider Roth Contributions and Conversions

Roth IRAs provide powerful benefits: tax-free growth and withdrawals. For 2025, you can contribute $7,000—or $8,000 if you’re over 50. And even if you can’t contribute directly, you can consider Roth conversions. Moving money from a traditional IRA to a Roth IRA means paying taxes now but avoiding potentially higher taxes later.

This strategy can be especially effective in the years between retirement and RMD age, when your taxable income is lower.

Define Your Retirement Vision

It’s not just about the numbers. Joe and Alan encourage writing down your retirement goals—when you want to retire, how much you plan to spend, and whether you plan to relocate or downsize. Studies show that those who write down their goals are far more likely to achieve them.

A good retirement plan includes:

• Savings benchmarks
• Social Security strategy
• Investment allocation
• Contingency planning for health care or unexpected expenses

Use the Right Tools

To help you get started, Your Money Your Wealth offers a free Retirement Readiness Guide. It’s packed with worksheets and step-by-step instructions to calculate how much you need, how to save, and how to draw income efficiently.

Whether you’re decades from retirement or staring it down in the next few years, planning now can ensure you retire with financial confidence.

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.

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