We began by talking about the average retirement savings in America—around $538,000. That might sound like a lot, but depending on where you live, it might not be enough. In California, you could need $1.5 million just to maintain a comfortable retirement, while in West Virginia, the bar is closer to $650,000. So how do you know if you’re on track? We like to use a retirement “report card.” Aim to have four times your salary saved by age 40 to 46, five times by age 51 to 55, and ideally eight to nine times your salary by your early 60s.

But saving is only part of the picture. Social Security is another major piece, and when you claim it can make a huge difference. Take a $3,800 monthly benefit at full retirement age: claim it early at 62, and you’ll only receive $2,700 per month. Wait until age 70, and it increases to $4,700. That’s a $500,000 difference over a lifetime! While it’s often best to delay for maximum benefit, I also recognize that some folks may need the income sooner—especially if cash flow is tight or health concerns are a factor.

Speaking of cash flow, maxing out retirement contributions is one of the smartest things you can do. That includes 401(k)s, especially when your employer offers matching contributions. Too many people leave free money on the table. For those over 50, catch-up contributions can make a huge difference. With consistent savings and a 6% return, you could exceed $1 million by age 70. And don’t overlook Health Savings Accounts (HSAs)—they offer triple tax advantages and can be a secret weapon for covering medical expenses in retirement.

Once you’re in your 50s and 60s, your asset allocation needs to evolve. A more aggressive mix, like 85/15 stocks to bonds, might make sense in your 50s. But in your 60s, especially as retirement gets closer, shifting toward a more conservative 65/35 or even 60/40 split can protect your portfolio from volatility. That’s crucial—big losses early in retirement, known as sequence of return risk, can derail your long-term strategy. Having safe assets like bonds to draw from in down markets is a key buffer.

Taxes are another area that can catch people off guard. Whether you’re selling a business, offloading real estate, or moving money between accounts, timing matters. Long-term capital gains taxes are typically more favorable than ordinary income taxes, and strategies like 1031 exchanges or installment sales can help ease the burden. One tax trap we discussed is the “widow’s penalty”—when a surviving spouse suddenly gets taxed at single rates on required minimum distributions. That’s where good planning can really make a difference.

As retirement nears, it’s critical to map out a plan for big transitions like selling a business or downsizing a home. These moves often take a year or more to execute, so build in time and flexibility. For those retiring before Medicare eligibility, private insurance needs to be factored into the budget. And as expenses shift—from commuting and housing to healthcare and travel—it’s important to distinguish between essential and discretionary spending.

When it comes to pulling money from your accounts, we recommend balancing withdrawals across taxable, tax-deferred, and tax-free buckets. That gives you more control over your tax situation. Pulling from bonds during down markets or reducing discretionary spending can help preserve your nest egg. Tax-efficient withdrawals aren’t just smart—they’re essential for long-term success.

We also covered spousal and survivor benefits. If one spouse passes away, the surviving spouse gets the higher of the two Social Security checks. For those divorced after 10 years of marriage, there may be benefits based on an ex-spouse’s record. These can provide critical support in later years.

One question we often get is about Roth conversions. Rachel from Seattle asked when it makes sense to convert traditional IRAs to Roth. We suggest looking at your tax bracket annually. If you’re in a low-income year or the markets are down, that could be an ideal time to convert and lock in tax-free growth for the future.

Retirement doesn’t happen by accident—it’s a deliberate, multi-year process. But with the right mix of planning, discipline, and strategy, you can build the life you want in retirement. We’re here to help you every step of the way.

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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