One of the biggest concerns people have about retirement is whether their savings will last. It’s a valid worry, and it’s crucial to have a clear understanding of how to evaluate your retirement savings and expenses to feel confident about your future.
That’s why our latest video dives into this important topic. Our goal is to empower you with the knowledge and tools you need to take control of your retirement planning.
Informed planning creates a road map for a financially solid retirement. Watch now to learn more!
Video Transcript
Hi, I’m Rory O’Hara, founder and senior managing partner at Ausperity Private Wealth. At Ausperity, we specialize in helping people navigate the complexities of retirement planning.
If you’re like many pre-retirees, you’ve probably asked yourself:
- How do I know if my assets will last?
- Am I saving enough, or am I missing something?
Today, I’m going to break these concepts down into simple, actionable steps to help you evaluate your retirement plan and see if you’re on the right track.
Step 1: Assess Where You Stand Right Now
Before you can plan for the future, you need a clear picture of where you are today. Start by:
- Calculating your total savings and investments – Add up the balances of all your accounts, including:
- 401(k)s
- IRAs
- Brokerage accounts
- Checking and savings accounts
- Any other investment accounts
- Understanding your retirement expenses – Break them down into two categories:
- Essential expenses: Housing, utilities, food, and healthcare
- Lifestyle expenses: Travel, entertainment, dining out
- Factoring in inflation – Costs won’t stay the same over time, so it’s important to adjust for inflation.
- Listing your retirement income sources – This includes:
- Social Security
- Pensions
- Part-time work
- Rental income
- Any other steady income streams
Step 2: Calculate Your Retirement Income Gap
Now that you have the basics covered, it’s time to do some simple math:
- Subtract your retirement income from your estimated expenses – This is known as your income gap, the amount you’ll need to withdraw from your savings each year.
- Determine your withdrawal rate – Divide your income gap from your total savings and investment portfolio.
- Use the 4% withdrawal rule as a starting point – This rule suggests you can withdraw up to 4% of your savings annually in retirement, adjusting for inflation.
However, this is just a guideline—your personal situation may require a more customized approach.
Step 3: Are You on Track for Retirement?
To evaluate your progress, ask yourself these key questions:
- Am I on track to meet my retirement goals?
- Is my portfolio diversified to handle market ups and downs?
- Do I have a strategy to rebalance during market downturns?
- Am I taking advantage of all tax-efficient retirement strategies?
The good news? Your financial plan isn’t set in stone. Life changes—whether through career moves, health changes, or market fluctuations—so your retirement strategy should evolve with you.
Step 4: Don’t Navigate Retirement Planning Alone
You don’t have to figure all of this out by yourself. In fact, you shouldn’t.
At Ausperity Private Wealth, we help our clients create retirement strategies that go beyond the numbers—focusing on the lifestyle you’ve worked hard to create.That’s why we created a Retirement Readiness Questionnaire. Visit ausperityprivatewealth.com to answer a few short questions and find out if you’re on track—or what steps you need to take to build the retirement you’ve always dreamed of.
