Alan Clopine and I will walk you through the numbers, the strategies, and the traps to avoid so you can retire with confidence. Here’s what you need to know.

1. Retirement Savings: The Real Targets

People love to throw around round numbers—$500,000, $1 million—but retirement planning is more complex than that.

• Longevity matters. If you’re 65 today, you’re likely to live well into your 80s or even 90s. That’s a long time to fund.
• Healthcare is a big expense. The average 65-year-old couple spends around $315,000 on medical costs over their lifetime.
• Inflation silently eats your purchasing power. At 3% annually, your dollar loses half its value in about 24 years.
• Taxes aren’t going anywhere. Pre-tax accounts like 401(k)s will be taxed as income later, while Roth IRAs grow tax-free. Knowing where your dollars live matters.

To plan right, you need to look at your spending habits, location, expected health costs, and tax positioning—not just the balance in your account.

2. Generating Income in Retirement

Once you’ve saved, the next question is: How do I make it last?

We explored the pros and cons of two common strategies:

Annuities

• Offer guaranteed income for life by shifting risk to an insurance company.
• A 67-year-old investing $1 million could get $6,300/month, based on Schwab’s estimator.
• Downsides? High fees, lack of flexibility, and surrender penalties.

Investment Portfolios

• More potential for growth and flexibility.
• But they come with market volatility and require smart withdrawal strategies.

We modeled different withdrawal timelines using a 6% return:

• $19,000/month for 5 years
• $8,500/month for 15 years
• $6,400/month for 25 years
• $5,600/month for 35 years

It’s all about balancing income, flexibility, and longevity.

3. Social Security Timing: The Game Changer

Social Security makes up 50% or more of income for over half of retirees—so getting the timing right is key.

• Claiming at 62 reduces your benefit by up to 30% permanently.
• Waiting until age 70 can increase your benefit by up to 75% compared to early filing.
• Married couples should coordinate benefits to maximize their lifetime payout.

For most people, it pays to delay if you can afford to—especially if you’re in good health.

4. Want to Become a Millionaire?

It’s more doable than you might think—if you start early.

• At 30, save $700/month.
• At 40, save $1,400/month.
• At 50, save over $3,000/month.

Start small, automate it, and take full advantage of employer matches. Once you hit age 50, don’t forget catch-up contributions—they can turbocharge your savings.

5. Stretching Retirement Dollars Further

Not all retirement savings strategies are about investing—cost control is just as powerful.

• Downsize your home.
• Move to a tax-friendly state. Leaving California for West Virginia could save $30,000/year in living costs.
• Trim discretionary spending. Dining out less and traveling smarter can add years of runway to your retirement funds.

We also recommend reviewing your debt picture and aiming for a lean balance sheet heading into retirement.

6. Use the Free Financial Blueprint

Don’t guess—know where you stand.

Our Financial Blueprint Tool at YourMoneyYourWealth.com lets you plug in your numbers and see where you land. It gives you a clear outlook:

• All Good
• Average
• Needs Help

The best part? It’s free, and you can do it from the comfort of your home.

Bottom line: Retirement is more than a number. It’s about strategy—income, taxes, inflation, lifestyle, and timing. With the right tools and planning, you can retire comfortably and stay there.

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.

The post How Much Do You Really Need to Retire? Breaking Down the Numbers and Strategies appeared first on ROI TV.

Determining Retirement Expenses and Income Sources

The first step in retirement planning is to estimate your future expenses. Retirement expenses typically include necessities like groceries, housing, and healthcare, as well as discretionary costs such as travel and hobbies. Calculating these costs helps clarify how much of your income needs to come from your portfolio.

Calculating Core and Discretionary Expenses

1. Core Expenses: These are your essential costs, such as housing, utilities, groceries, and healthcare. They represent the expenses that need to be reliably covered.
2. Discretionary Expenses: These include travel, hobbies, and dining out. Since discretionary expenses can vary, it’s wise to budget conservatively for them to maintain flexibility.

Determining Income Sources

Once you’ve estimated your expenses, assess your income sources. For most retirees, income will come from Social Security, pensions, and portfolio withdrawals. Identify which portion of your income is guaranteed (like Social Security) and which will fluctuate based on market performance (like investments).

• Social Security and Pensions: Calculate how much Social Security will contribute based on your filing age, and factor in any pension payments if applicable.
• Portfolio Income: Determine how much of your expenses need to be covered by your investment portfolio. A common approach is to use a sustainable withdrawal rate, such as 4%, to estimate how much you can withdraw without depleting your savings.

Impact of Taxes, Inflation, and Marital Status on Retirement Planning

Retirement planning is more complex than calculating income and expenses; it also involves understanding the effects of taxes, inflation, and marital status on your finances.

Taxes on Retirement Income

Your tax obligations in retirement depend on your income sources and tax bracket. Social Security benefits, for instance, may be partially taxable based on your provisional income. Similarly, withdrawals from traditional retirement accounts like 401(k)s and IRAs are subject to income tax, while Roth withdrawals are tax-free. Factoring in these tax liabilities helps ensure you aren’t caught off guard by unexpected costs.

Inflation’s Effect on Expenses and Income

Inflation erodes purchasing power over time, making it critical to plan for rising costs, especially in healthcare. Some income sources, like Social Security, offer inflation adjustments, but investments need to grow to keep up with inflation. Consider allocating a portion of your portfolio to growth-oriented investments to help protect against inflation.

Marital Status and Tax Implications

Marital status impacts tax thresholds and deduction eligibility, influencing overall retirement income. Married couples often have higher tax brackets, providing some flexibility in income withdrawals without moving into higher tax brackets. Understanding the tax implications of your marital status helps you make decisions that optimize your retirement income.

Considering Lifestyle Changes in Retirement

Retirement spending patterns often change as retirees move through different phases of life, commonly referred to as the “go-go,” “slow-go,” and “no-go” years.

1. Go-Go Years: Early retirement is usually marked by higher levels of activity and spending, especially on travel and hobbies. This is often a time when discretionary expenses are highest.
2. Slow-Go Years: During middle retirement, activity levels may decline, resulting in reduced spending on travel and other pursuits. Core expenses remain, but discretionary spending typically decreases.
3. No-Go Years: Later retirement often brings increased healthcare needs and may include long-term care costs. Budgeting for potential healthcare and long-term care expenses is essential, as these costs can rise significantly.

By planning for these phases, you can anticipate and manage shifts in spending patterns, ensuring financial stability through each stage of retirement.

Final Thoughts

Calculating retirement needs requires a comprehensive approach that considers expenses, income sources, taxes, inflation, and lifestyle changes. By assessing your core and discretionary expenses, planning for taxes and inflation, and preparing for different phases of retirement, you can create a financial plan that supports your ideal retirement lifestyle. Whether you’re in the “go-go” years of early retirement or planning ahead for future healthcare costs, thoughtful planning today lays the foundation for a financially secure tomorrow.

You should always consult a financial, tax, or legal professional familiar about your unique circumstances before making any financial decisions. This material is intended for educational purposes only. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Any mentioned rates of return are historical or hypothetical in nature and are not a guarantee of future returns.

Past performance does not guarantee future performance. Future returns may be lower or higher. Investments involve risk. Investment values will fluctuate with market conditions, and security positions, when sold, may be worth less or more than their original cost.

The post Calculating Your Retirement Needs: A Comprehensive Guide to Expenses, Income, and Lifestyle Adjustments appeared first on ROI TV.