Why a Retirement Makeover Matters Now More Than Ever
Inflation, market swings, and increased longevity mean our money needs to stretch further than ever. Just consider this: in 2016, average monthly expenses were around $3,500. By 2021, that number had jumped to $4,500. That’s an extra $12,000 per year! No wonder nearly half of retirees today say they’re spending more than they expected.

That’s why having a clear, documented financial plan is essential. Yet, only 17% of Americans have one in writing. A solid plan keeps you on track and gives you the power to course-correct when life throws surprises your way.

Benchmarks by the Decade
Not sure if you’re on track? Use these savings benchmarks as a rough guide:

• By your 40s: aim for 3x your annual income
• By your 50s: 6x
• By your 60s: 10x

So if you’re earning $100,000 a year, you’d want around $300,000 saved by your 40s and $1 million by retirement. These aren’t hard rules, but they’re great starting points—especially when you factor in Social Security or a pension.

Stress-Test Your Retirement Plan
A financial plan isn’t “set it and forget it.” It needs to work under different assumptions—like higher inflation or lower market returns. We looked at John and Sally, both 57, with $1 million in 401(k)s and $50,000 in cash. Spending $140,000 a year, they ran out of money by age 82. Working longer, spending less, or downsizing their home could change that dramatically.

Avoid the Hidden Costs of Early IRA Withdrawals
Thinking about tapping into your IRA early? Be cautious. Taking $100,000 out before age 59½ could cost you $38,000 in taxes and penalties—especially if you live in a high-tax state like California. That’s money that could’ve grown for decades had it stayed invested.

Streamline and Simplify with Account Consolidation
Multiple 401(k)s and IRAs can make managing your retirement messy. Consolidating accounts not only reduces paperwork and fees but simplifies your required minimum distributions (RMDs) later on. Instead of juggling separate RMDs for each 401(k), you’ll only need to calculate one for all your IRAs.

Don’t Leave Free Money on the Table
If your employer offers a 401(k) match, make sure you’re contributing enough to get the full benefit. Even small increases matter. One example showed how bumping contributions from 2% to 6% boosted savings from $119,000 to $356,000 over time. Ideally, you should aim to save 15–20% of your income, but starting small and building up works too.

Why Roth IRAs Should Be Part of Your Tax Strategy
Most people stash retirement savings in tax-deferred accounts like 401(k)s—but come retirement, those withdrawals are taxed as ordinary income. That’s where Roth IRAs can shine. Contributions are taxed upfront, but qualified withdrawals are completely tax-free. They’re especially great for stocks or high-growth investments.

And here’s the kicker: tax brackets are scheduled to go up in 2026. That makes now a smart time to explore Roth conversions and lock in lower tax rates while you can.

Final Thoughts
If your retirement plan is still a work in progress—or sitting in a drawer gathering dust—it’s time for a financial makeover. Start by setting clear goals. Document your plan. Revisit it regularly. From optimizing tax strategy to stress-testing your portfolio, small adjustments today can make a big difference tomorrow.

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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