Do you know whether your retirement plan is on track, or are you simply hoping it is?
Whether retirement is years away or just around the corner, it’s wise to pause and take a closer look at your plan today. A retirement checkup can help you know where you stand, identify potential gaps, and make adjustments before small issues become major problems.
Many people know they should be saving, but they’re less certain whether they’re saving enough. That’s where a thoughtful review can bring clarity—not just about the numbers, but about faithful stewardship in the season ahead.
Know Your Retirement Savings Target
No single rule of thumb fits everyone. Your retirement goal depends on many factors, including when you retire, how long you live, your lifestyle, your health, your generosity goals, and whether you’ll have income from Social Security, a pension, rental property, or part-time work.
Still, benchmarks can be helpful. As a starting point, one common guideline is to aim for about 10-12 times your income by age 67.
The point isn’t to become discouraged if you’re behind. The point is to know where you stand. Once you have a clearer picture, you can make wise adjustments.
Know Your Retirement Spending Number
Your spending number may be even more important than your savings balance. A million dollars can be plenty for one household and not nearly enough for another because spending determines how much income your portfolio must produce.
Start with your current budget, then consider what may change in retirement. Will your mortgage be paid off? Will travel increase? Will transportation costs go down? Will you support adult children or aging parents? Will you downsize, relocate, or stay where you are?
Those questions help you see not only what retirement may cost, but also what kind of stewardship this next season may require.
Have a Withdrawal Plan
It’s also important to think carefully about how much you’ll withdraw from your savings each year.
A common guideline has been the 4% rule, first developed by financial planner William Bengen. He has since updated his research, suggesting the number may be closer to 4.7% with a more diversified portfolio. Fidelity describes it more broadly as a 4%-5% sustainable withdrawal range.
So, if you retire with $500,000, you might begin by withdrawing around $20,000 to $25,000 in the first year, then adjust over time.
Of course, this is not a guarantee, and it does not mean you’ll never touch the principal. Your actual withdrawal rate should depend on your age, health, investment mix, inflation, market conditions, and whether your essential expenses are covered by guaranteed income.
The danger is assuming you can withdraw 8%, 10%, or even 12% from your portfolio every year without consequences. For most retirees, that’s not a plan. It’s a countdown.
Prepare for Health Care Costs
Medicare is a blessing, but it doesn’t cover everything. Retirees may still face premiums, deductibles, co-pays, prescription costs, dental care, vision care, hearing expenses, and more.
Long-term care is a separate issue altogether.
Recent estimates suggest that a 65-year-old retiring today may need well over
