Lately, when talking with my wife, I’ve been flummoxed when talking about retirement. How much do we really need? It’s not an easy question.

For most, this is a moving target every year. Health care costs are rising. The GOP is threatening to privatize Social Security and Medicare. Employers are cutting benefits.

For us, it’s even more complicated. What if, after college, our daughters need to stay at home while looking for a job? (Our youngest is off to college in two years, when I will qualify for Social Security).

How do you get a handle on this thorny question? Develop a checklist.


– How will you maximize Social Security? For me, this is a slam dunk. I’m going to wait until 70 to reap the highest-possible payment – if I can. I think this is the first question for most on any retirement checklist.

But for many, that’s not doable. They may be disabled or simply need the money sooner. In any case, run the numbers to see what your benefit will be at different ages.

Social Security has a number of calculators that will help you arrive at benefits estimates in seconds.

– How much will be spending to maintain your lifestyle? It’s a myth that retirees will cut back dramatically when they retire. You’ll want to travel, eat out or visit friends and family.

Come up with some spending numbers reflecting a typical year. Don’t forget out-of-pocket medical expenses like “Medigap” insurance, taxes and housing costs.

If you’re downsizing, look at a new set of numbers. Here’s a handy worksheet.

– How much money will you withdraw from your nest egg? If you can live off of Social Security, that’s marvelous. But most people can’t.

Do you have a defined-benefit (guaranteed) pension? How much will you need to withdraw from your 401(k) or IRAs to maintain your lifestyle (see checklist item above)? How much more can you save before you retire?

Most of all, you need to know how long your money will last given your spending budget, rate of return and amount in your kitty.

The idea is to make your money last as long as possible. Use this calculator for some estimates.

– What’s the big picture? Life is a dynamic river. You may come into an inheritance. Your kids may be at home longer than you expect. You may want to go back to work or get divorced.

All of these life changes will alter your retirement schedule, so you need to be flexible. Unless you expect your life to be fairly static in the next 30 years or so, you’ll need to plug in some new numbers occasionally.

Try this calculator to get a comprehensive picture of your retirement finances. By using tools like this, you’ll be able to go with the flow as your situation changes.

Most of all, don’t be locked into one, fixed plan or retirement goal. You really need several scenarios on the table. As your life goes through different phases, you’ll be able to reset your goals, so flexibility will be your best friend to ensure success.


This article was written by John Wasik from Forbes and was legally licensed by AdvisorStream through the NewsCred publisher network. 

Thomas J Cooper, CFP®, CPPT profile photo
Thomas J Cooper, CFP®, CPPT
Certified Financial Planner, Fiduciary
NAMCOA (Naples Asset Management Company®, LLC)
Mobile : 352-857-7273