Retirement Planning Doesn’t Stop When You Retire

How to keep up with your goals once you have actually stopped working

Getting your target savings number right is an important part of the retirement planning process, but it’s just one thing to consider. Making sure you’re able to achieve and maintain your goals after you’ve retired is another.

This is why retirement planning doesn't stop when you retire. Setting goals, creating an action plan for achieving them, and reviewing both regularly throughout retirement can help keep your finances on solid ground.

Key Takeaways

  • Once you've left the workforce, the next phase of retirement planning begins.
  • To make a plan for your spending, divvy up your assets into short-, medium-, and long-term buckets and match your goals to each bucket.
  • Be realistic about needs and wants and, if needed, take steps to close the gap between your savings and spending. 

Biggest Goals of Retirees

The biggest goals for retirees and pre-retirees include traveling, spending more time on leisure activities, spending more time with family, and relaxation, according to Prudential's Retirement Preparedness Survey.

Your vision may feature other goals, but regardless of what you want to accomplish, the start of retirement is not the time to take your foot off the gas when it comes to retirement planning.

“For many, going into retirement after years of planning and saving can give one the feeling of satisfaction that they’ve done enough, so now 'let’s enjoy,'” says Stuart Chamberlin, president and founder of Boca Raton, Fla.-based Chamberlin Financial. “The thought of saving is behind them and now’s the time to enjoy the so-called golden years, but this mindset can have a detrimental effect on their financial security.”

Why Assess Your Financial Needs After You Retire?

Your financial picture changes with any big life transition, and retirement is no different. Your income streams as well as expenses may be similar to what you projected, or they might be different. So you'll need to adjust as you go.

You also may be dealing with new-to-you financial issues, such as managing required minimum distributions from tax-advantaged retirement accounts, navigating Medicare, and more. Add in market volatility, Social Security planning, and inflation, and you've got a complex picture. So you'll want to make sure there's some wiggle room in your budget.

“It’s still wise to maintain a saving mindset in retirement and have a plan to combat things like inflation, which would include the rising cost of healthcare,” Chamberlin says. “ On the income side, annuities can help to create an additional income stream.

Chamberlin says to consider an annuity with a built-in income rider “that can correlate your income with gains on an index.” And, “having an increasing payout option over time can help with the increased cost of living."

Use the Bucket Approach

As you move from saving to spending in retirement, consider how you’ll divvy up your assets. David Zavarelli, an independent financial advisor and certified financial planner based in Danbury, Connecticut, says splitting assets into individual “buckets” can help you better plan spending.

“The first bucket is your short-term, which is two years or less,” Zavarelli says. “That money should be in cash or very short-term bond investments.”

The middle bucket is your three- to six-year bucket, which Zavarelli says you’d want to invest in a portfolio with a 50/50 split between stocks and bonds. “This bucket will periodically replenish the short-term cash need bucket,” he says.

The third bucket is your long-term bucket, which may have more stock exposure, potentially allowing for more growth. “The thought here is that since it’s intended to be longer-term, there is less concern about short term market volatility,” Zavarelli says. 

Match Goals to Buckets

Once you’ve set up your buckets for spending, you can then decide which goals each one will fund. For example, part of your short-term bucket may be earmarked for emergency expenses. Baby boomers, on average, only have $15,000 in an emergency fund, according to the Transamerica Retirement Survey.

Keeping three months to a year’s worth of expenses in a liquid savings account can help you cover any unexpected costs you might encounter.

The middle bucket could be what you draw on to fund your lifestyle goals, such as starting a business or traveling more often. Reviewing your assets, income, savings rate, and investment returns can help you determine how much you can afford to spend on travel, and where that money will come from.

The third bucket can be helpful in planning for what can easily be your biggest retirement expense: healthcare. A couple retiring at age 65 in 2020 would need $295,000 to pay for medical expenses during retirement, according to Fidelity Investments. That figure doesn't include the additional cost of long-term care.

Some estimates run much higher. According to HealthView Services, which does healthcare-cost projections for the financial services industry, a healthy 65-year-old couple retiring in the U.S. in 2019 will need about $606,337 to cover healthcare expenses during retirement.

“You may be healthy today, but statistically, your chances for unexpected medical emergencies will increase,” Chamberlin says. “Having some flexibility in your planning to adapt to life’s unexpected curveballs would be wise.”

Prioritize Needs and Wants

As you shape your financial plan in retirement, consider what’s most important. Retirees need to figure out what constitutes a spending necessity in terms of meeting basic living needs, any “wants” they have that aren’t necessarily critical to daily survival, and what falls into their “dream” category, says certified financial planner Ilene Davis.


The percentage of retirement-aged Americans who haven't calculated how long their retirement savings should last them.

Then, do the math. “Figure out how much is needed for each and have that much set aside for that purpose,” Davis says. Leave room for new needs that can arise as you move through retirement, such as healthcare. Most importantly, be realistic about what you need to enjoy a comfortable lifestyle.

“Many people think they need more than they really do,” Davis adds. “It’s a matter of truly understanding what lifestyle they can afford and finding happiness to enjoy that desired lifestyle.”

If there’s a gap between your savings and income and your goals, think about how you can close it. That could mean reducing spending, delaying your retirement date, or working part-time once you’ve officially retired. All three could help to bolster your savings and increase retirement income.

The Bottom Line

Retirement can mean uncertainty if you haven’t taken steps to plan for it appropriately. If you’re retired or nearing retirement, it’s important to keep your goals—and your plan to achieve them—firmly in sight.

“The most important step a retiree or pre-retiree can take is to educate themselves on the intricacies of building a concise financial plan,” Zavarelli says.

An advisor can guide you through the process if you’re not sure where to start. While you’ll pay a fee for professional advice, “the investment up front can save far more down the road, and it can provide the peace of mind that can allow one to enjoy the retirement they deserve,” Zavarelli adds.

Article Sources
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  1. Prudential. "2018 Retirement Preparedness Survey." Page 8.

  2. Transamerica Center for Retirement Studies. "20th Annual Transamerica Retirement Survey." Page 147.

  3. Fidelity Investments. "How to plan for rising health care costs."

  4. HealthView Services. "Retirement Healthcare Costs Brief."

  5. MoneyRates. "Survey: Are Your Spending Habits Retirement Ready?"

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