The Pre-Retiree’s Retirement Planning Guide
Discover new possibilities for your retirement with this guide, packed with practical advice to help you enjoy your golden years to the fullest.
See if our expertise matches with your needs.
The most important decade of your financial life
If you’re in your 50s or early 60s and the word “retirement” has started showing up more often in your head than in your spreadsheets, you’re not alone. Pre-retirement is the stretch of your financial life where the biggest dollars and the biggest decisions converge. These include, how much you’ve saved, when to claim Social Security, what to do about healthcare before Medicare kicks in, how to soften the RMD wave at 73 (75 starting in 2033) and how to make the lifestyle you’ve earned actually last. Most of those decisions can’t be unwound, which is why the years leading up to retirement matter more than any other stretch of your financial life.
The retirement landscape has shifted, too. Pensions are increasingly rare, healthcare costs have outpaced inflation for decades, and longer life expectancies stretch what your savings have to cover. Add the SECURE Act 2.0 rule changes, ongoing federal tax-law adjustments, and a steady drumbeat of Medicare and Social Security updates, and it’s easy to feel like the goalposts keep moving.
There’s good news amid all these changes. Pre-retirees in their 50s and 60s have more powerful tools at their fingertips right now than at any other point in their financial lives – supercharged catch-up contributions, sophisticated tax-planning windows, healthcare bridge strategies, and meaningful flexibility in how (and when) to claim Social Security. This guide has been created to help you use those tools deliberately, with confidence, and on your timeline.
A note up front: this guide is intentionally broad rather than personalized. It’s designed to spark thinking, give you a framework, and surface the questions worth asking. For decisions that depend on your specific numbers, our team typically recommends working with a CFP® professional who can model the full picture together. Now let’s dive in.
How much will you actually need in retirement?
The honest answer is that there’s no universal number. How much you’ll need depends on where you live, your health, your lifestyle, and how long you live. That said, there are a few benchmarks to help anchor the conversation.
The U.S. Bureau of Labor Statistics’ Consumer Expenditure Survey tracks household spending by age. The latest data shows that households headed by someone 65 or older spend roughly $61,432 a year on average, with housing-related costs (mortgage, taxes, maintenance) eating up about 36% of that. Healthcare runs a close second and tends to be the category that surprises people the most. For a deeper breakdown, see our companion piece on the biggest retiree expenses.
Two rules of thumb help with directional planning. The first is the 70-80% replacement rate: most retirees need 70-80% of their pre-retirement income to maintain their lifestyle. The second is the 25× rule: if you can save 25 times your expected annual retirement spending, a 4% initial withdrawal rate has historically supported a 30-year retirement (more on the 4% rule later).
Neither rule is a substitute for an actual budget. In our practice, we find that pre-retirees who run a detailed spending exercise – typically based on their last 12 months of real outflows – get a far sharper answer than those guessing from rules of thumb. The pattern most retirees follow is well documented: spending is highest in the first several years of retirement (travel, hobbies, helping adult kids, home projects), gradually declines as activity slows in the mid-70s to early 80s, then often ticks back up later in life as healthcare and potential long-term care costs rise. Researchers call those three phases “go-go, slow-go, and no-go,” and the overall U-shape is sometimes called the “retirement spending smile.” It’s important to plan for all three, although this is easier said than done. Most early retirees are unsure of what their actual spending will look like, so working with a CFP® professional to iterate several spending scenarios can provide clarity and confidence for your finances in retirement.
Building your retirement vision (together)
Money is the spreadsheet part of retirement. The harder – and more important – part is figuring out what you’re retiring to. Our team typically suggests starting these conversations early, while there’s still time to correct your course.
Where will you live?
If you and your spouse are eyeing a new locale, consider renting for a year before buying. It’s an underrated experiment, especially if the new area is far from friends and family or you’ve never lived there before. If things don’t work out, you can pivot more easily without having to sell a home.
When will each of you retire?
Timing involves more than the calendar. You’ll want to weigh your home’s condition and ongoing carrying costs, your Social Security claiming strategy (the longer you wait, up to 70, the higher the benefit), your healthcare bridge if either of you retire before 65, and the marriage logistics of one spouse retiring before the other. We’ve seen households underestimate the second-order effects of mismatched schedules: different wake-up times, who handles which chores, and the resentment that can run in either direction. Sometimes the still-working spouse resents the early-retiree spouse’s mid-Tuesday afternoon golf time, and sometimes the at-home spouse who is searching for daily purpose resents the working spouse who has something to look forward to every morning.
What happens if one of you isn’t here?
This is not the cheeriest conversation, and one that is often avoided by many, but it is a necessary one. Make sure each spouse’s projected retirement income remains adequate if the other passes away first. Survivor decisions interact with Social Security claiming, pension election (joint vs. single life), life insurance, and beneficiary designations on retirement accounts. We’ll touch on each of those below.
Are you on track? How to run the numbers
Online retirement calculators are everywhere. Semrush data shows us there are well over 100,000 U.S. searches per month for retirement-readiness tools. These are a fine starting point, but most are too simplistic to capture the real complexity. Variable spending, healthcare bridge years, Social Security claiming optimization, RMD planning, and tax-bracket management all interact in ways a single calculator can’t model.
A CFP® professional can stitch those moving pieces together. For just $590, our Am I on Track? service turns your full financial picture into a single 0-to-100 score with a prioritized action list that includes specifically what to change if you’re not where you’d like to be.
8 ways to make the most of your final pre-retirement decade
The decade before retirement is the most consequential stretch of your financial life. Here are the some of the moves we suggest pre-retirees to focus on:
#1. Max out catch-up contributions (and super catch-up if you qualify)
If you are 50 or older, the IRS lets you make catch-up contributions to your 401(k) and IRA on top of the standard annual limits. SECURE Act 2.0 added a “super catch-up” for ages 60-63: an enhanced contribution equal to 150% of the regular catch-up. Translation: pre-retirees in that four-year window can sock away significantly more than 50-somethings.
| Account | Standard(under 50) | Catch-up(50+) | Super catch-up(ages 60–63) |
|---|---|---|---|
| 401(k) / 403(b) / TSP | $24,500 | Plus $8,000 | Plus $11,250 |
| Traditional / Roth IRA | $7,500 | Plus $1,100 | n/a |
| HSA (with HDHP) | $4,400 self-only$8,750 family | Plus $1,000 (age 55+) | n/a |
Confirm current-year numbers on Vision Retirement’s 2026 Contribution Limits page before you set your payroll elections.
#2. Build tax diversification across three buckets
Most pre-retirees end up over-concentrated in tax-deferred accounts (Traditional 401(k)s and IRAs). That works during accumulation, but every dollar you withdraw in retirement is taxed as ordinary income, and RMDs at 73 (or 75 starting in 2033) can force unwanted distributions into bad tax years. The fix is to build out three buckets: tax-deferred (pay tax later), tax-free (Roth – tax-free qualified withdrawals), and taxable brokerage (mixed treatment, but maximum flexibility). The bottom line: optionality in retirement comes from having dollars in all three places.
#3. Use the Roth conversion window
The years between your last paycheck and age 73 (or 75 starting in 2033) are often the lowest-income years of your financial life. That makes them prime real estate for Roth conversions – moving money from a forever-taxed bucket to a never-again-taxed bucket. Done strategically, conversions can also reduce future Social Security taxation, control IRMAA brackets, and leave heirs a tax-free inheritance.
Here’s the general rule we apply in our practice: convert just enough each year to fill a target tax bracket without spilling into the next one. Done year after year, the cumulative effect can be substantial.
#4. Audit your beneficiary designations
Beneficiary designations on retirement accounts, life insurance, and certain bank accounts pass directly to the listed person, regardless of what your will says. We’ve seen ex-spouses inherit IRAs simply because the paperwork was never updated. Spend 20 minutes this month and audit every account.
The closer you are to retirement, the less time you have to recover from a market drop. A common rule of thumb is the “100 minus age” framework: at age 60, that suggests 40% in stocks. Today, with longer life expectancies, some advisors use “110 minus age” or “120 minus age.” In our practice, we typically tilt risk based on how much of a client’s essential spending is covered by guaranteed income (Social Security + any pension) rather than relying on a single, age-based formula. Sequence-of-returns risk – a topic we'll return to – is the silent killer of early-retirement portfolios, and asset allocation in the years just before and after retirement is your biggest defense.
#5. Right-size your investment risk
#6. Open or max out an HSA
If you have a qualifying high-deductible health plan, the HSA is the only account in the IRS code with three tax advantages: deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. Used strategically, an HSA becomes a stealth retirement healthcare account, which is particularly valuable during the bridge years before Medicare. There’s a $1,000 catch-up for HSA holders age 55 and older.
#7. Audit life insurance and consider long-term care
Term life insurance bought decades ago to protect young children may no longer be needed. Permanent life insurance, on the other hand, can play interesting roles in retirement income strategies, but it’s not for everyone. Long-term care planning gets its own section below.
#8. Plan your healthcare bridge to Medicare
If you are retiring before 65, healthcare is often the biggest unknown on the cost side. Skipping over this section is one of the most common mistakes we see in our practice.
The four most common bridge paths:
COBRA – continue your employer plan for up to 18 months. You pay the full premium (no employer subsidy), so while it is often the easiest, it is also the most expensive option.
ACA marketplace plans – premiums depend on your Modified Adjusted Gross Income (MAGI), and subsidies can be substantial for households whose income drops sharply in retirement. That said, choosing the right plan for you can be a cumbersome process, especially if you’re trying to keep your existing healthcare providers in-network.
Spouse’s employer plan – if your spouse is still working, this is often the most cost-effective option. However, your spouse’s plan likely differs from your prior employer’s plan, so it’s important to understand exactly what their coverage offers (network, deductibles, prescription benefits) before assuming it’s a straight swap.
Retiree healthcare – often the best option, but increasingly rare, some employers (and some public-sector employers in NJ) still offer subsidized retiree health benefits.
A planning tip worth flagging: if you’re on an ACA marketplace plan, every dollar of additional income (Roth conversions, IRA distributions, large capital gains) can phase out your subsidy. Model the trade-off before pulling the trigger on a large conversion.
For a full playbook on crossing this gap — comparing ACA, COBRA, and spousal coverage, plus the tax-smart withdrawal sequencing that protects your subsidy — see our guide to how to cover healthcare before Medicare kicks in.
Essential Pre- Retirement Advice Video
If retirement is in your near future, be sure to check out this video! Receive practical tips on topics ranging from retirement savings and tax diversification to navigating psychological and emotional aspects of your golden years.
Medicare basics
At 65, Medicare becomes your primary coverage. The system has four parts: Part A (hospital, free for most), Part B (outpatient medical, premium-based), Part C (Medicare Advantage – a private bundled alternative), and Part D (prescription drugs). Late enrollment penalties are real and permanent: missing Part B without “creditable coverage” can mean a 10% premium increase for every 12 months you delayed, for life. Same general idea for Part D, with a smaller monthly penalty. Set calendar reminders three months before your 65th birthday.
Medigap vs. Medicare Advantage
| Medigap (Supplement) | Medicare Advantage (Part C) | |
|---|---|---|
| How it works | Adds to Original Medicare, covering copays, coinsurance, and deductibles. | A private plan bundling Parts A, B, and often D—sometimes with dental and vision. |
| Pros | More complete coverage, minimal surprise costs after an event, and no network restrictions. | Administratively simpler, usually lower premiums, and often includes extras. |
| Cons | Typically the higher monthly premium for that broader coverage. | More out of pocket when care happens, and some providers may be out of network. |
Medigap (Medicare Supplement) plans cover much of what Original Medicare doesn’t, such as copays, coinsurance, and deductibles. Medicare Advantage (also called Part C) bundles A, B, and often D into a private plan, sometimes with extras like dental and vision. Each comes with real trade-offs:
Medigap – pros: more complete coverage, with minimal surprise costs after a healthcare event, and no network restrictions (you can see virtually any provider that accepts Medicare).
Medigap – cons: typically the more expensive route from a premium perspective, since you’re paying for that broader coverage every month.
Medicare Advantage – pros: administratively simpler, and often mirrors the kind of employer-sponsored coverage you had during your working years. Almost always the less costly option from a premium perspective, and many plans include dental, vision, and prescription drug coverage.
Medicare Advantage – cons: you’ll typically pay more out of pocket when a healthcare event happens (for copays, coinsurance, and plan-level deductibles), and some providers you’d like to see may be out of network, and therefore more expensive or unavailable.
Critical caveat on Medigap: in most states, insurers can deny you a Medigap policy or charge you more for pre-existing conditions after your initial 6-month Medigap Open Enrollment window closes. Procrastinating here is expensive.
IRMAA – the surcharge most pre-retirees haven’t planned for
Medicare’s Income-Related Monthly Adjustment Amount (IRMAA) is a surcharge on your Medicare Part B and Part D premiums based on your tax return from two years prior. Your 2026 income determines your 2028 IRMAA, your 2027 income determines your 2029 IRMAA, and so on. A single large Roth conversion at age 63 can spike your IRMAA at 65 – often by hundreds of dollars per person, per month. Plan the timing accordingly.
One of the most common questions we hear from newly retired clients is, “What happens to my Medicare premiums now that I’ve retired and my income is substantially lower?” The good news is that Medicare allows exceptions for life-changing events, and retirement is one of them. If your income has dropped meaningfully due to retirement (or another qualifying event, such as the death of a spouse, divorce, or loss of pension income), you can file Form SSA-44 with the Social Security Administration to request that your IRMAA surcharge be recalculated based on your current, lower income rather than your two-year-old tax return. We walk pre-retirees through this filing routinely in our practice. It’s often worth several thousand dollars per year.
Optimizing your Social Security claiming strategy
Social Security is often the largest and longest-lived income stream a retiree has, yet the claiming decision is frequently made on autopilot. A more deliberate approach can mean tens or even hundreds of thousands of additional lifetime dollars for a typical couple.
The basics
Social Security retirement benefits are based on your 35 highest-earning years and the age at which you claim. Claim early (as young as 62) and your benefit is permanently reduced. Wait until Full Retirement Age (FRA – currently 67 for those born in 1960 or later) and you receive 100% of your calculated benefit. Wait until 70 and you receive roughly 124% of your FRA benefit, thanks to delayed retirement credits worth about 8% per year of waiting. Run your own numbers on the SSA’s official benefit estimator.
| Claim age | Approximate benefit | Versus FRA | Best for |
|---|---|---|---|
| 62Earliest | ~70% of FRA | −30% | Health concerns, immediate income need |
| 67FRA, born 1960+ | 100% of FRA | Baseline | Default if you have other bridge income |
| 70Max delay | ~124% of FRA | +24% | Strong longevity, higher-earning spouse |
Spousal and survivor benefits
This is where the math gets interesting for couples. The lower-earning spouse can claim a spousal benefit equal to up to 50% of the higher-earning spouse’s FRA benefit. When one spouse passes away, the surviving spouse receives the larger of the two benefits. That means delaying the higher earner’s claim has a multiplier effect on what the survivor receives for the rest of their life. For many married couples, the optimal strategy involves the lower-earning spouse claiming earlier while the higher-earning spouse waits to 70.
Working while claiming
If you claim before FRA and continue working, Social Security temporarily withholds part of your benefit if your earnings exceed an annual threshold. Once you reach FRA, the earnings test goes away, and any withheld amounts are eventually recouped through a higher monthly benefit. Bottom line: working while claiming early isn’t always a tax disaster, but it deserves modeling before you commit.
Get Ready for the RMD Wave
Required Minimum Distributions (RMDs) are exactly what they sound like: the IRS requires you to begin pulling money out of most tax-deferred retirement accounts starting at age 73, rising to 75 in 2033 for those who turn 74 after December 31, 2032. Roth IRAs are not subject to RMDs during the original owner’s lifetime, which is one of their biggest structural advantages.
The math gets unpleasant if you arrive at 73 with a large Traditional IRA and a substantial Social Security check. RMDs stack on top of all your other ordinary income, and they can push you into higher tax brackets, trigger IRMAA surcharges, increase the taxation of your Social Security benefits, and accelerate depletion of accounts you had hoped to keep intact for your spouse or heirs.
Three strategies to soften the RMD wave
Roth conversions during the low-income window between retirement and age 73 (covered above). Each dollar converted reduces a future RMD.
Qualified Charitable Distributions (QCDs). Once you’re 70½, you can direct annual amounts (currently up to $111,000, indexed for inflation) directly from your IRA to a qualified charity. The distribution counts toward your RMD but doesn’t appear in your taxable income. For charitably inclined retirees, it’s one of the cleanest tax wins available.
Strategic asset location. Keep bond-heavy holdings inside IRAs (where their interest is sheltered from current tax) and growth-oriented holdings in taxable brokerage accounts (where long-term capital gains and qualified dividends get preferential rates). The mix can substantially shrink the size of your eventual RMD.
Build a sustainable withdrawal strategy
The most stressful psychological shift in retirement isn’t running out of money – it’s spending money you’ve spent decades accumulating. The pre-retirees we work with often say this transition was harder than they expected. That's why a clear income plan matters so much—see our guide on how to maximize your income in retirement.
The 4% rule, reconsidered
The 4% rule originated from Bill Bengen’s research in the mid-1990s: pull 4% of your portfolio in year one, adjust annually for inflation, and the odds historically favored a 30-year retirement without depleting the account. It is a directionally useful starting point, not a hard rule. Today’s environment of lower expected real rates of return due to higher inflation and longer life expectancies has prompted some researchers to suggest 3.5% as a more conservative anchor, and dynamic spending rules (which we will touch on below) often outperform a static rule.
Bucket strategies
A common approach is to segment your portfolio into time-based buckets: 1-3 years of expected spending in cash and short-term bonds (the short bucket), 3-10 years in intermediate-term bonds (the intermediate bucket), and 10+ years in equities (the long bucket). The setup gives equities time to recover during downturns without forcing you to sell at the bottom.
Dynamic spending
Rather than rigidly adjusting for inflation every year, dynamic spending rules adjust withdrawals based on portfolio performance – spending a bit more after good years and dialing back after rough ones. Done intentionally, dynamic approaches improve sustainability without dramatically cutting lifestyle.
Sequence-of-returns risk
A bear market in the first five years of retirement is notably worse than the same bear market in your 70s. Why? Because withdrawals from a falling portfolio lock in losses that compound for the rest of retirement. Pre-retirees can mitigate sequence risk by holding a cash buffer at retirement, considering a partial annuitization for guaranteed income, or staying flexible on early-retirement spending if markets disappoint in year one or two.
Annuities – a tool, not a default
Annuities convert a lump sum into a guaranteed income stream. They can be powerful for retirees worried about outliving their money, particularly single-premium immediate annuities (SPIAs) and qualified longevity annuity contracts (QLACs). But they come with trade-offs, such as lost liquidity, complexity, fees, and credit risk on the issuing insurer. How annuities work deserves its own deep-dive before you commit.
Don’t skip estate planning
Estate planning isn’t only for the wealthy or elderly. If you own a home, a bank account, a retirement account, or a life insurance policy, you have an estate. The pre-retirement years are the right time to button up the basics.
A current will that reflects current relationships, assets, and intentions.
Beneficiary designations on every retirement account and insurance policy (audited regularly because they override your will).
Durable power of attorney for financial matters.
Healthcare power of attorney and living will for medical decisions.
A revocable living trust, where appropriate, to streamline asset transfer and avoid probate.
A note for New Jersey residents
New Jersey has its own quirks. The state imposes an Inheritance Tax (separate from the federal estate tax) that depends on the beneficiary’s relationship to you. Spouses, children, and grandchildren (Class A) are exempt; siblings (Class C) and friends or non-relatives (Class D) can face rates up to 16%. Strategic gifting and trust structures can mitigate the impact, but only if the planning is done well in advance. Our team in Ridgewood works with NJ-area clients on this regularly, and we have seen the savings from proper planning run into six figures.
| Beneficiary class | Who's included | Tax |
|---|---|---|
| Class A | Spouse, children, grandchildren, parents | Exempt |
| Class C | Siblings, son- or daughter-in-law | Up to 16% |
| Class D | Friends and other non-relatives | Up to 16% |
Don’t underestimate the psychological shift
Retirement is more than a financial transition. Walking away from a career means walking away from daily structure, professional identity, and a built-in social network – three things retirees consistently underestimate just how much they’ll miss. In our practice, we’ve seen retirees thrive when they have a plan for purpose, social connection, and structure on Day 1; we have witnessed others struggle for years until they build those scaffolds.
A few approaches that work well, based on our observations:
Practice retirement before you fully retire – take longer vacations, work part-time, pilot a hobby.
Replace the social structure intentionally – look into volunteer roles, board service, regular standing meetups.
Stay physically active – health and longevity correlate strongly with engagement.
Maintain separate interests from your spouse. Togetherness is the goal, not 24/7 overlap.
A note for parents: a recent Bankrate study reported that half of parents with adult children have sacrificed retirement savings to help their kids. Generosity is admirable, but the bottom line is this: you can’t borrow for retirement the way your kids can borrow for college. Helping them establish budgets and pay for some of their own expenses serves everyone better in the long run.
7 Common pre-retirement mistakes to avoid
Drawing on patterns we see across hundreds of pre-retiree conversations in our practice – plus published research from various sources, including Fidelity’s annual retirement readiness studies – here are the stumbles that catch pre-retirees most often.
#1. Underestimating home maintenance and aging-in-place modifications
Aging in place sounds great until you need a stair lift, a walk-in shower, or a new roof. A useful rule: budget at least 1% of your home’s value annually for ongoing maintenance, plus a separate aging-in-place reserve if you plan to stay long-term. On a $700,000 home, that’s $7,000 a year. And many years, it’ll be more.
#2. Skipping a long-term care strategy
According to U.S. Department of Health and Human Services data, someone turning 65 today has roughly a 70% chance of needing some form of long-term care in their remaining years. Medicare doesn’t cover most LTC. Women, on average, need 3.7 years of care versus 2.2 for men. The earlier you lock in coverage (or self-fund deliberately), the better your options. Experts often suggest applying in your mid-to-late 50s, before health declines complicate underwriting; AALTCI data shows that 34% of applicants aged 60-64 are denied coverage, climbing to over 47% for those 70+.
#3. Missing Medicare enrollment windows
Late enrollment penalties for Part B and Part D are permanent and compound monthly. Set calendar reminders three months before your 65th birthday, and confirm your COBRA or retiree coverage qualifies as “creditable” before delaying. COBRA, in particular, does not count as creditable coverage for Medicare Part B.
#4. Procrastinating on Medigap
The window where insurers can’t deny you a Medigap policy is short – six months from when you first enroll in Part B at 65. Outside that window, in most states, insurers can deny coverage or charge more for pre-existing conditions.
#5. Subsidizing adult kids out of your own retirement
(See note above.) Build a budget that supports them only within limits that don’t compromise your own runway.
#6. Holding too much in employer stock
Concentrated, single-stock risk is one of the silent killers of pre-retirement portfolios. If your employer’s stock represents more than 10-20% of your investable net worth, develop a diversification plan well before retirement, particularly if you also depend on the same employer for your income, healthcare, and pension.
#7. DIY tax planning during the conversion window
The years between retirement and 73 are too tax-sensitive to wing. Each conversion or distribution decision interacts with IRMAA brackets, Social Security taxation, capital gains rates, ACA premium tax credits, and – for NJ residents – state-level tax treatment of IRA basis. Get help.
One overlooked layer here is the so-called “widow’s (or widower’s) penalty.” Many families assume a surviving spouse will be financially better off because day-to-day expenses should drop. In practice, the opposite is often true. Once the surviving spouse files as Single rather than Married Filing Jointly, the tax brackets compress sharply, the standard deduction is roughly cut in half, IRMAA thresholds drop, and a larger share of Social Security can become taxable – all while the household’s income from IRAs and pensions stays largely the same. Without proactive planning (Roth conversions during the joint-filing years, beneficiary review, careful drawdown sequencing), this shift can quietly erode wealth at exactly the moment a surviving spouse can least afford it. Build it into the plan while you are still able to file jointly.
Moving forward – and where to start
Retirement isn’t a single decision; it is hundreds of decisions clustered into the most consequential decade of your financial life. The pre-retirees we work with at Vision Retirement most often share two qualities: they start early, and they don’t try to figure it all out alone. If you're within two years of your target date, our 24-Month Retirement Countdown lays out the steps in order. The cost of a wrong move – claiming Social Security at the wrong moment, missing a Medicare deadline, converting too much in the wrong year – is rarely small.
If even a few of the topics in this guide raised more questions than answers, the next step is simple: schedule a FREE discovery call with one of our CFP® professionals. We can walk through your specific situation together, show you how our process works, and help you move into retirement with the clarity to actually enjoy it.
FAQs
-
There’s no one-size-fits-all formula for determining this number. The most useful approach is to build a personalized budget grounded in your last 12 months of actual spending, then multiply by 25 as a rough starting point (the inverse of the 4% rule). A more accurate answer comes from a full retirement income plan that accounts for Social Security, any pension, healthcare costs, and taxes.
-
It depends on your health and family longevity, whether you have other bridge income, and your marital situation. As a rough heuristic: if you are in good health, have bridge income, and your spouse will outlive you with the lower earnings record, delaying the higher earner’s claim to age 70 often produces the most lifetime household income. Run the numbers with a CFP® professional.
-
Traditional IRAs give you a tax deduction now in exchange for taxing your withdrawals as ordinary income later. Roth IRAs are funded with after-tax dollars but grow tax-free and aren’t taxed on qualified withdrawals. Roth IRAs also avoid RMDs during the original owner’s lifetime.
-
A Roth conversion ladder is a multi-year strategy for early retirees that converts a slice of a Traditional IRA to a Roth IRA each year, paying tax on the converted amount. After a five-year seasoning period, the converted principal becomes available penalty-free, even before 59½. The strategy works best in low-income years before RMDs kick in.
-
IRMAA is the Income-Related Monthly Adjustment Amount – a Medicare Part B and D surcharge based on your tax return from two years prior. To minimize it, manage your taxable income (especially large Roth conversions or capital gains) during the years that will be measured for IRMAA, typically the years right before and after age 65.
-
There are four main paths: COBRA, ACA marketplace, your spouse’s employer plan if available, or retiree healthcare from your former employer. The right choice depends on cost, network, and how much income you’ll generate in those bridge years (since income affects ACA subsidies). Healthcare is often the most expensive and most overlooked piece of early retirement planning.
-
Currently age 73, rising to 75 in 2033 for those who turn 74 after December 31, 2032. RMDs apply to most tax-deferred retirement accounts, including Traditional IRAs, 401(k)s, 403(b)s, 457(b)s, SEPs, and SIMPLE IRAs. Roth IRAs are exempt during the original owner’s lifetime.
-
For many people, yes – especially when bought in their mid-to-late 50s before health complicates underwriting. The decision involves your family health history, your willingness to self-fund, your assets, and your preference between standalone LTC policies and hybrid life-insurance-with-LTC-rider policies. Each path has trade-offs.
One benefit that often gets overlooked: the most valuable thing an LTC policy buys you and your family isn’t just the dollars; it is time. Time to evaluate care facilities, time to bring in the right providers, and time to make thoughtful decisions about a loved one’s care without the pressure of an immediate financial crunch from having to pay for long-term care entirely out of pocket. We’ve seen families make rushed, regretted decisions in the absence of that buffer.
-
Your combined household Social Security income will drop, because the SSA doesn't allow a surviving spouse to collect both benefits at once. When one spouse passes away, the survivor keeps the higher of the two benefits and the lower one stops—so the household goes from two checks to one. (Your own benefit may actually increase in the process: if you were the lower earner, you'd step up to your late spouse's higher amount.) For example, if you were receiving $2,200 a month and your spouse $3,400, the survivor keeps the $3,400 and the $2,200 stops—a $2,200 reduction in total household income. Because of this, delaying the higher earner's claim locks in a larger survivor benefit, often the single most valuable Social Security optimization a couple can make.
-
Rules of thumb like “100 minus age” or “110 minus age” provide a general starting point (40-50% in stocks at 60), but the right answer varies from person to person and depends on such factors as how much of your essential spending is covered by guaranteed income, your overall risk tolerance, and your time horizon. In our practice, we look at the full picture rather than a simplified, age-based formula.
-
The math sometimes says ‘no’ (especially with a low fixed rate), but the psychology often says ‘yes’. For many of our clients, entering retirement without a mortgage reduces fixed expenses, lowers the income they need to generate, and removes a layer of stress. It’s a personal decision, and it is worth running both scenarios.
-
Plenty of DIY-ers do fine during the accumulation years. Pre-retirement is different. The interactions between Social Security claiming, Roth conversions, IRMAA, ACA subsidies, healthcare bridges, and RMD planning are difficult to model and easy to get wrong. The decisions are also largely irreversible. If you’ve ever valued the price of advice, it’s now.
That said, you don’t have to hand the whole portfolio over to get help. For confident DIY investors who still want a second set of expert eyes, Vision Retirement offers membership options designed to act as a “peer review” of your plan, so you can continue to manage your own investments while we stress-test your retirement income, tax, healthcare, and Social Security strategy alongside you. It’s a useful middle path between going it alone and engaging a full-service advisor.
Disclosures:
This document is a summary only and not intended to provide specific advice or recommendations for any individual or business.
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. Withdrawals made prior to age 59½ are subject to a 10% IRS penalty tax and surrender charges may apply. Variable annuities are subject to market risk and may lose value. Riders are additional guarantee options that are available to an annuity or life insurance contract holder. While some riders are part of an existing contract, many others may carry additional fees, charges, and restrictions, and policyholders should review their contract carefully before purchasing. All guarantees are based on the claims-paying ability of the issuing insurance company.
There is no assurance that the techniques and strategies discussed herein are suitable for all investors or will yield positive outcomes. Investing involves risks, including possible loss of principal. No strategy assures success or protects against loss.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio.
Diversification does not protect against market risk.
Variable universal life insurance/variable life insurance policies are subject to substantial fees and charges. Policy values fluctuate and are subject to market risk and possible loss of principal. Guarantees are based on the claims-paying ability of the issuer.
Both loans and withdrawals from a permanent life insurance policy may be subject to penalties and fees and, along with any accrued loan interest, will reduce the policy’s account value and death benefit. Withdrawals are taxed only to the extent that they exceed the policy owner’s cost basis in the policy, and loans are typically free from current federal taxation. A policy loan can result in tax consequences if the policy lapses or is surrendered while a loan is outstanding.
30+
YEARS
Helping families navigate complex retirement decisions
FIDUCIARY
Your interests come first — throughout the relationship, not just at the point of sale.
TRANSPARENCY
Clear pricing, no hidden fees, no surprises.
PROPRIETARY PRODUCTS
No proprietary funds. No incentives to push them.
As Seen In
