Retirement Planning
Retirement Readiness Checkpoint (40s and 50s)
Retirement readiness is less about a single "magic number" and more about cash flow durability. This checkpoint helps you evaluate if your plan survives real-life variation.
Step 1: Define target spending
Start with current spending, then remove temporary expenses and add likely retirement costs like health premiums, travel, or family support.
Step 2: Map guaranteed income
- Social Security estimates
- Pensions or annuity income
- Rental or business distributions
The gap between spending and guaranteed income is what your portfolio must fund.
Step 3: Model withdrawal pressure
Estimate portfolio draw rates under normal, poor, and strong market sequences. Sequence-of-returns risk matters most in the first 10 years.
Key checkpoint: if your plan only works under optimistic returns, it is not yet retirement-ready.
Step 4: Review tax strategy
Blend account withdrawals intentionally: taxable, tax-deferred, and Roth assets each behave differently for tax and Medicare impacts.
Step 5: Define adjustment levers
- Retire 1 to 2 years later
- Reduce first-decade discretionary spending
- Raise savings now
- Delay Social Security strategically