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Retirement Starts Today

Retirement planning often feels like a complex jigsaw puzzle. One minute you're thinking about your current expenses, the next you're considering life insurance and Social Security benefits. The calculations part of retirement planning involves plugging data into mathematical formulas and interpreting the results. But what variables do you need to include, and how can you make sure your plan is realistic and comprehensive? Let's talk about it and make this journey both relatable and manageable. 

Key Variables in Retirement Planning Calculations 

To kick off your retirement planning, it's crucial to understand the key variables that need to be included in your calculations. There may also be additional variables that are important to consider for each individual's retirement plan.  

  1. Current Monthly Expenses: This includes everything from groceries and utilities to entertainment and healthcare. A realistic view of your current expenses helps set a baseline. To get an accurate picture, track your spending meticulously for a few months. Categorize each expense to identify where your money goes and which expenses are non-negotiable. 

  2. Future Changes in Expenses: Consider how your expenses might change in retirement. Will you downsize your home, travel more, or have increased healthcare costs? Anticipate potential lifestyle changes and factor in inflation. For instance, healthcare costs typically rise faster than other expenses, so planning for higher medical bills is wise. 

  3. Retirement Age: When do you and your spouse plan to retire? This impacts how long your retirement savings need to last. The age at which you retire can significantly affect your Social Security benefits and pension payouts. Research the full retirement age for Social Security and how benefits change if taken earlier or later. 

  4. Income Sources: Include pensions, Social Security, investment income, and any other sources of income you expect to have in retirement. Analyze the reliability of each source of income, understanding that some might fluctuate with market conditions. 

  5. Life Insurance and Long-Term Care Coverage: Assess your current coverage and evaluate if it meets your future needs. Life insurance can provide for your spouse or dependents after you’re gone, while long-term care insurance helps cover costs if you need extended medical care. 

Comprehensive Expense Assessment 

Capturing all necessary expenses when assessing your current monthly costs is a must. Here's how you can do it: 

  1. Track Your Spending: This helps you identify regular and irregular expenses. Regular tracking not only reveals spending patterns but also highlights areas where you can cut costs. 

  2. Categorize Expenses: Divide your expenses into categories such as housing, food, transportation, healthcare, entertainment, and others. Creating detailed categories makes it easier to see where you can adjust and make sure no expense is overlooked. 

  3. Plan for Annual Expenses: Some expenses, like property taxes or insurance premiums, occur annually. Allocate a monthly amount for these in your budget. By spreading out these costs, you could avoid the financial strain that comes with paying large sums at once. 

Discussing Retirement Age with Your Spouse


Discussing with your spouse about a realistic retirement age is essential. 

  1. Potential Benefits and Drawbacks: Retiring earlier might mean more years to enjoy leisure activities but requires a larger savings pool. Weigh the pros and cons of early versus late retirement and consider how each scenario aligns with your health, lifestyle, and financial goals. 

  2. Balancing Financial Readiness and Personal Goals: Align your retirement age with your financial readiness and lifestyle aspirations. Consider part-time work or phased retirement if full retirement seems daunting. This gradual transition can help maintain income and provide a sense of purpose. 

Evaluating Life Insurance and Long-Term Care Coverage 

Ensure your life insurance and long-term care coverage meet your retirement needs by: 

  1. Reviewing Policies: Understand the benefits and limitations of your current policies. Are they sufficient for your anticipated needs? Review the terms, premiums, and coverage limits to make sure that they match your retirement plans. 

  2. Consulting Professionals: Speak with a financial advisor to evaluate whether additional coverage is necessary. They can provide insights into the types of policies that best suit your future needs and help you avoid gaps in coverage. 

Estimating Retirement Income 

Accurately estimating your retirement income can involve these things but are not limited to: 

  1. Listing Income Sources: Include pensions, Social Security, disability, military benefits, and any other sources. Create a list of all potential income streams to avoid any surprises. 

  2. Understanding Reliability: Assess the stability and reliability of each income source. For instance, understand how Social Security benefits might change based on policy updates. Research your pension plan's rules and the impact of market fluctuations on investment income. 

Running and Revisiting Retirement Plans 

Create a robust retirement plan by: 

  1. Running Different Scenarios: Use the input data to run various scenarios, including starting Social Security benefits at different ages. Compare the outcomes to see which option best suits your needs. 

  2. Revisiting Plans Twice a Year: Regularly update your plan to reflect changes in your financial situation or goals. Life events, market changes, and evolving goals necessitate periodic reviews to keep your plan relevant. 

Adding Guaranteed Income Sources 

Consider adding sources of guaranteed income in retirement, such as: 

  1. Dividend-Paying Stocks: These can provide regular income, though dividends are not guaranteed. Research companies with a history of stable dividend payouts.

  2. Bonds: A bond ladder can offer steady interest payments. Diversify bonds by maturity dates to ensure a consistent income stream. Bonds are subject to market and interest rate risk if solid prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

  3. Annuities: Single Premium Immediate Annuities (SPIA) or Deferred Income Annuities (DIA) can provide a guaranteed income for life. Understand the terms and fees associated with annuities to make informed decisions. Fixed and Variable Annuities are suitable for long-term investing, such as retirement investing. Gains from tax-deferred investments are taxable as ordinary income upon withdrawal. Guarantees are based on the claims paying ability of the issuing company. Withdrawals made prior to age 59 ½ are subject to a 10% IRS penalty tax and surrender charges may apply. Variable annuities are subject to market risk and may lose value.  

Stress Testing Your Retirement Plan 

Stress testing your plan involves: 

  1. Simulating Economic Conditions: Use financial modeling tools to simulate different economic conditions, such as high inflation or low interest rates. This helps you understand the potential impact on your retirement income. 

  2. Preparing for Market Downturns: Develop strategies to mitigate risks, such as having a diversified portfolio and sufficient emergency funds. Consider how different investment strategies perform under various economic scenarios. 

The Role of Professional Advisors 

A professional financial advisor can enhance your retirement planning process by: 

  1. Providing Expertise: Advisors offer insights and strategies based on experience and knowledge. They stay updated on financial trends and regulations that could affect your retirement plans. 

  2. Personalized Planning: They tailor plans to your specific needs and goals. A personalized approach ensures that all aspects of your financial situation are considered. 

  3. Selecting the Right Advisor: Look for advisors with relevant credentials, good client reviews, and a fiduciary duty to act in your best interests. Interview multiple advisors to find one who understands your goals and can provide the support you need. 

Retirement planning is a process that requires careful consideration of various factors. By taking this approach and regularly revisiting your plan, you can make sure that you are well-prepared for your retirement. 


Whether it’s adjusting your savings approach, reevaluating your investment strategies, or simply seeking guidance, each step you take might help you in planning for a happy retirement. If you need help or have any questions, feel free to reach out to me. Let's collaborate and create a retirement plan for your needs. 


Samer Hilal, a Financial Advisor with Stratos Wealth Partners, began his investment journey in 1995. He's dedicated to creating actionable financial plans for clients. Now at Stratos, Samer continues to guide clients on their financial paths.

The opinions voiced in this video are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.


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