Retirement is a lot of decisions, not just one.
As retirement gets closer, questions tend to show up together. When can I stop working? How much can I spend? Which account should I draw from first? How do taxes fit in?
The answers depend on the life you want to live. So we start there: what you want retirement to look like, and what your money needs to do to support it.
You don’t have to answer every question at once. Some decisions are time-sensitive. Others can wait until you’ve lived with the change for a while.
Start with these four things
Estimate your spending
Build a budget around the life you expect to live, including costs that change when work stops.
List your income sources
Social Security, pensions, and savings accounts each work differently. Seeing them together shows what you can count on.
Review your investments
Once you start withdrawing instead of saving, your investment mix may need to change.
Plan for taxes
The order you draw from accounts can affect your taxes, so it helps to plan ahead.
The number you need depends on the life you plan to live.
Not every decision needs to be made today
- Where you’ll live long term
- How you’ll spend every year of retirement
- Large gifts to family
- Major purchases
Your plan can change as you learn what retirement is really like.
Common retirement planning mistakes to avoid.
- Planning around a single number. A savings target is useful, but spending, taxes, and timing matter just as much.
- Underestimating the first few years. Travel, projects, and helping family often make early retirement more expensive than people expect.
- Drawing from accounts without a plan. Taking money from whichever account is convenient can lead to avoidable taxes.
- Changing investments all at once. Moving everything to cash, or reaching for returns right before retirement, can create new risks.
- Overlooking healthcare. Coverage and costs can change when work ends, so they belong in the plan early.
How AimWell can help.
As an independent, fee-only fiduciary firm, AimWell approaches retirement planning as a coordinated, ongoing process rather than a one-time calculation. Retirement income, spending, investments, taxes, Social Security, Medicare, healthcare, and estate planning all affect one another.
Amy Powell and Bill Comber, CFP®, help clients model different retirement scenarios, evaluate tradeoffs, and understand how one decision may affect the rest of the financial plan. Once the direction is clear, we help carry it forward, from coordinating investment and withdrawal strategies to working with your CPA, attorney, or other professionals when needed.
As retirement unfolds, we revisit the plan and adjust it to reflect what is happening in your life, not what was assumed years ago.
Next steps.
- Write down what you want a typical week in retirement to look like
- Gather statements for every retirement and savings account
- Download your Social Security statement from ssa.gov
- List the questions or uncertainties you want to work through
- Schedule a conversation to see how the pieces fit together
Related resource: Before You Retire
Questions people often ask.
How do I know if I’m ready to retire?
A good starting point is whether you can describe the life you’re retiring to and roughly what it will cost. From there, a financial plan can test whether your savings and income sources are likely to support it, and show what would need to change if they aren’t.
Related Resource:Before You Retire
How far in advance should I start planning for retirement?
It is never too soon to start planning for retirement. The earlier you begin, the more time you have to explore your options, make changes gradually, and build greater flexibility into the plan. Retirement planning can include savings, investments, taxes, Social Security, healthcare, and the life you want to create after work. If retirement is closer than you expected, don’t let that stop you. The best time to begin is now.
Related Resource:Amy’s podcast with Sean Scott, “Is It Ever Too Late to Start Planning for Retirement?” on the Aging Smart Podcast.
How do I know how much I can spend in retirement?
That depends on your assets, income sources, time horizon, investment strategy, taxes, expected expenses, and the goals you want those resources to support. A retirement plan can help evaluate those pieces together.
Which accounts should I draw from first?
It depends on your tax situation, the types of accounts you have, and your income needs. The order of withdrawals can affect how much tax you pay over time, so it’s worth planning rather than defaulting to whichever account is easiest.
How do taxes fit into retirement?
Taxes can become one of the biggest threats to an otherwise solid retirement plan. Once Social Security, pensions, and required minimum distributions begin, taxable income can rise quickly and leave you with fewer planning options. Larger withdrawals may also increase the taxable portion of Social Security benefits, push you into a higher tax bracket, and raise Medicare premiums.
Smart retirement tax planning begins before those income sources collide. Thoughtful withdrawal strategies, Roth conversions, charitable giving, and coordination across taxable, tax-deferred, and Roth accounts can help reduce future surprises and preserve flexibility throughout retirement.
When should I claim Social Security?
Social Security should not be claimed based on a rule of thumb. Before choosing a date, you should review every claiming strategy available to you and compare the alternatives using a Social Security optimization analysis.
The right strategy may depend on your earnings record, retirement age, life expectancy, marital history, spousal or survivor benefits, continued employment, taxes, other retirement income, and the needs of a surviving spouse. Claiming earlier can provide income sooner, while delaying may increase the monthly benefit and potentially strengthen future survivor income and hedge against inflation risk.
AimWell models the available claiming strategies alongside your retirement spending, investment withdrawals, taxes, and long-term income needs. The goal is not simply to maximize one Social Security check. It is to determine which strategy best supports the entire retirement plan.
Does my investment strategy need to change when I retire?
Maybe, but retirement does not automatically mean your portfolio should become dramatically more conservative. Your investment strategy should be reviewed as your income needs, time horizon, tax situation, and ability to tolerate market declines change.
One of the biggest retirement planning mistakes is becoming too conservative too early. Retirement may last for decades, and a portfolio still needs enough long-term growth to help offset inflation, taxes, rising healthcare costs, and ongoing withdrawals. Investments that feel safer in the short term can create a different risk if they fail to preserve purchasing power over time.
The right strategy balances near-term spending needs with long-term growth. AimWell considers your retirement income, withdrawal plan, time horizon, risk tolerance, and other financial resources before recommending whether the portfolio should change and by how much.
What if I am not sure what I want retirement to look like yet?
Let us help you explore that. You do not need to arrive with a fully formed vision for retirement. Our behavioral finance specialist Chris Manzione and the AimWell team will work with you to understand what brings you purpose, what you want more or less of in your life, and how your values, relationships, habits, and experiences may shape the transition.
Together, we can explore different possibilities, from continuing to work in some capacity to traveling, volunteering, spending more time with family, or simply creating more flexibility. Those conversations help us build a financial plan around a retirement that feels meaningful to you, then refine it as your vision becomes clearer.
Will AimWell help me implement my retirement plan?
Yes. Retirement planning should not end with a projection or a list of recommendations. AimWell helps prioritize the next steps and carry the agreed-upon strategy forward.
That may include coordinating investment and withdrawal changes, helping organize account consolidations or rollovers, preparing for Social Security and Medicare decisions, working with your CPA on tax-planning strategies, and coordinating with your estate-planning attorney when updates are needed.
We remain involved after retirement begins, revisiting the plan as spending, taxes, investments, healthcare needs, and personal priorities change.
Where to go from here
Retirement touches nearly every part of a financial plan. Read more about retirement planning as an ongoing service, or return to all life events and transitions.
