Retirement is a complicated concept. On the surface, it’s simple… You don’t need to work for a living anymore. But when you take into account everything that goes into creating a safe, happy, healthy retirement that stretches all the way to the end of life?
That is not simple.
But is it possible? Absolutely.
For millions of Americans, the idea of retirement carries both hope and uncertainty. It’s a stage of life that many look forward to, but few fully understand, especially when it comes to the layers of planning required to make it secure and sustainable.
When we step back, we can see that successful retirement planning is about more than just saving money. It’s about understanding how health, lifestyle, taxes, family, and even where you live can all influence how your retirement years unfold. Let’s walk through a comprehensive guide to all the things you should be thinking about—so you can build a retirement plan that truly lasts.
Table of Contents
- Understanding the Financial Foundation
- Social Security: A Crucial Timing Decision
- Don’t Overlook The Overlooked Killer of Retirement, TAXES
- Factor In Healthcare
- DO NOT Underestimate Inflation
- Where You Live Matters
- Look At Your Everyday Life
- Estate Planning (It’s Not Just For The Wealthy)
- Consider Risk Management
- Work With A Professional
How To Retire
Step #1. Understanding the Financial Foundation
Let’s start with the most obvious pillar of retirement: income. When people think of retirement planning, they often start and stop with saving money. But retirement income is often a multi-source puzzle.
Some of these puzzle pieces include:
- Social Security
- 401(k)s, IRAs, and Roth IRAs
- Pensions (if you're lucky)
- Brokerage or investment accounts
- Annuities
- Real estate income
- Part-time work
PLEASE NOTE: If you only have one income source, there is an implied sense of fear, but you can, too, have a great retirement. Please skip to section #2 if you are planning to work with one income source.
While we can’t always control it, relying too heavily on a single source—like Social Security or a 401(k)—without diversifying your income streams can create unnecessary risk… It’s also more stressful.
For example, tapping into your investment accounts too quickly can result in running out of money in your later years, especially if market downturns hit early in your retirement. This is why financial advisors often focus not just on how much you’ve saved, but also on how those funds will be distributed over time.
For example, should you draw from taxable accounts first or delay Social Security to increase your monthly benefit? A strategic drawdown plan can significantly stretch your resources.
Step #2. Social Security: A Crucial Timing Decision
It’s very common for people to rely on Social Security for a portion of their retirement income, or for the whole thing. For most Americans, it will be one of their only guaranteed income streams for life. But when you claim it—and how—matters enormously.
But before we discuss that, let’s step back.
The amount you can expect to receive depends on:
- Your earnings history
- When you claim (as early as 62 or as late as 70)
- Spousal or survivor benefits
Claiming benefits at age 62 might be tempting, especially if you’re eager to leave the workforce. But doing so permanently reduces your monthly benefit. Waiting until full retirement age—or even age 70—can increase your payments significantly, which makes a big difference if you live into your 80s or beyond.
Let us say that again.
Claiming early can reduce your monthly income by up to 30%, while delaying increases it significantly. It’s vital to think about your longevity, health, and overall financial picture before making a decision.
Get it wrong, and you might leave thousands of dollars on the table over time. So, before you go and file, please remember that retirement planning is about balancing longevity, spousal needs, taxes, and how the rest of your retirement income is structured.
Step #3. Don’t Overlook The Overlooked Killer, TAXES
Taxes don’t stop in retirement—in fact, they often get more complicated.
Many retirees are caught off guard when they discover that up to 85% of their Social Security benefits could be taxable.
On top of that, Required Minimum Distributions (RMDs) from traditional retirement accounts can push you into higher tax brackets just when you thought you’d be paying less.
This is why planning your income and withdrawals with tax strategy in mind is critical. Failing to account for taxes can reduce your actual spendable income by thousands each year, draining your savings faster than anticipated. Strategies like Roth conversions, tax-diversified accounts, or delaying withdrawals from certain sources can help, but only if you plan ahead.
Let’s recap and rephrase:
- Up to 85% of your Social Security could be taxed
- Required Minimum Distributions (RMDs) can push you into a higher bracket
- States vary wildly—some tax retirement income, others don’t
Planning tax-efficient withdrawals is essential if you have the option to diversify among pre-tax, Roth, and taxable accounts, which can provide flexibility and minimize unnecessary tax burdens.
Step #4. Factor In Healthcare
Healthcare is, by far, the largest expense in retirement. According to Fidelity, the average 65-year-old couple can expect to spend over $300,000 on healthcare during retirement. That’s not a small line item—it’s a core expense category that can reshape your entire retirement budget.
That doesn’t even include long-term care.
- Medicare kicks in at 65, but it doesn’t cover everything
- You’ll still pay premiums, deductibles, and copays
- Dental, vision, and hearing aren’t included in Medicare
- You may need supplemental insurance or a Medicare Advantage plan
Ignoring this reality is dangerous. Running out to get plans like Medicare Advantage is also dangerous. We recommend learning about other options, such as Supplement Plan G, before making these decisions.
How To Retire: Consider Long-Term Care
Another critical—and often overlooked—aspect of retirement planning is long-term care. No one wants to talk about it, but almost 70% of people over age 65 will require some form of long-term care at some point, whether it’s in-home help, assisted living, or a nursing facility.
The challenge is that Medicare doesn’t cover long-term care beyond short-term rehabilitation. That means the financial burden often falls entirely on you.
Long-term care insurance, hybrid policies with living benefits, or Medicaid planning strategies can all help. But they only work if implemented before a crisis hits. Without a plan, the need for care can quickly erode your assets and put financial pressure on your loved ones.
So, when you are building a retirement plan, specifically one that is good, you’ll take long-term care into account well before you ever have to.
Step #5. DO NOT Underestimate Inflation
Retirement often spans 20 to 30 years—or more. Over that time, inflation can quietly but aggressively chip away at your purchasing power. What costs $50,000 per year today could easily cost $90,000 or more two decades from now.
Many retirees make the mistake of thinking they can shift everything into low-risk investments to preserve capital. But doing so without any growth potential leaves them vulnerable to inflation. A retirement plan needs to balance safety with growth, ensuring that your money continues to work for you, not just sit still and lose value.
In our opinion, retirees must:
- Choose investments that outpace inflation (e.g, equities, TIPS)
- Reassess their spending annually
- Consider cost-of-living adjustments when calculating long-term needs
Step #6. Where You Live Matters—Financially and Emotionally
Deciding where to live in retirement is more than a lifestyle choice. It’s a major financial decision. Some states tax Social Security benefits or retirement income, while others are far more tax-friendly. The cost of living, housing expenses, and access to healthcare can vary significantly by region.
Beyond the numbers, where you live also impacts your well-being. Are you near family or friends? Is your home accessible as you age? Can you easily get to medical appointments? The wrong location can lead to isolation, stress, or high unexpected costs. Choosing your retirement setting thoughtfully can improve both your quality of life and your financial stability.
So, remember, where you retire has a huge impact on your finances and lifestyle.
- Cost of living
- State taxes on income, pensions, or Social Security
- Climate and natural disaster risk
- Access to quality healthcare
- Proximity to family or social support
Some retirees move for affordability. Others choose to age in place and make home modifications. Either way, where you live should align with your financial and health needs.
Step #7. Look At Your Everyday Life
Sadly, retirement is not usually one long vacation. Many people look forward to the freedom that retirement promises, but once the novelty wears off, daily life still requires structure, purpose, and meaning.
Questions to consider:
- What will your average day look like?
- What do you want it to look like?
- How will you stay physically and mentally active?
- What communities can you participate in?
- What role will travel, hobbies, or volunteering play?
Without a routine or sense of engagement, retirement can lead to boredom—or worse, depression. That’s why planning for what you’ll do with your time is just as important as planning for how you’ll pay for it. Hobbies, volunteering, part-time work, or time with grandchildren can help provide a sense of fulfillment and belonging.
In short, financial independence doesn’t guarantee happiness. You have to build that too.
The Foundation That Holds Everything Together? Your Mental Health
It’s pretty well known now that leaving the workforce can lead to a loss of identity, purpose, and social interaction. This is especially true for individuals whose careers defined much of their self-worth and structure.
Maintaining strong social connections, staying mentally active, and finding purpose can all help safeguard your mental health. In fact, studies show that loneliness and isolation are linked to poorer physical health and shorter life spans.
Incorporating social wellness into your retirement plan isn’t fluff—it’s foundational. Build a lifestyle that includes:
- Regular social contact
- New learning opportunities
- Intergenerational relationships
- Time with family and friends
Mental and emotional well-being are just as critical as financial planning.
Step #8. Estate Planning (It’s Not Just for the Wealthy)
Thinking about what happens after you’re gone can be one of the hardest and most complicated parts of retirement planning, but our goal is to take care of everything so we can ride off into the sunset without a care.
But how do you hand off your things cleanly? Estate planning. It isn’t just about passing on wealth—it’s about protecting your wishes and avoiding legal complications for your family.
Wills, trusts, powers of attorney, and healthcare directives are all essential. So is reviewing your beneficiary designations and making sure everything is up to date. Failing to plan can and likely will lead to costly probate proceedings, family disputes, and assets being distributed in ways you never intended.
If you care about your family, your values, or your legacy, please know that estate planning isn’t optional. It’s an act of care. Everyone needs an estate plan, regardless of income. Basic documents include:
- Will or trust
- Durable power of attorney
- Healthcare proxy and advance directive
- Beneficiary designations
These ensure your assets are distributed according to your wishes and that someone you trust can make decisions if you’re unable to.
Supporting Or Gifting To Family? Read This
Many retirees want to help children or grandchildren, but financial support can jeopardize your own stability if not managed carefully. Your cup can’t be empty if you hope to give to others. We recommend that you discuss with your retirement planner the following.
- What gifts or contributions mean the most to you?
- Once identified, check that you can afford to give or pay for education.
- Who might you be taking care of in retirement? Am I the default caregiver for aging relatives or grandkids?
- Are my children financially independent? If not, what does that mean for me and my income?
It’s okay to help, but not at the expense of your future.
Step #9. How To Retire? Consider Risk Management
Even the best retirement plan can be derailed by unexpected events, such as
- Market downturns
- Early death or disability
- Divorce
- Legislative changes (Social Security or tax laws)
That’s why flexibility is key. Discuss potential issues with your retirement planner, and build contingency into your retirement.
Step #10. Work With Our Recommended Retirement Experts
Retirement is a life plan and not just a financial one. If there’s one thing to take away, it’s this: a successful retirement isn’t built on luck. It’s built on intentional, holistic planning.
And we feel that retirement is too complex to navigate in isolation. Working with professionals—whether it’s a financial planner, elder law attorney, tax advisor, or Medicare specialist—can help ensure that every piece of your plan works in harmony.
A good advisor won’t just look at your portfolio. They’ll look at your entire life—your goals, your risks, your family—and help you design a plan that’s both strategic and deeply personal.
When you look beyond the surface—beyond the dollars in your account—you’ll find a network of decisions that all matter: your health, your home, your family, your time, and your sense of purpose.
Yes, it’s complicated. But with the right plan, and the right support, you can turn complexity into clarity—and retire with confidence, dignity, and peace of mind.
Yes, retirement is complicated. But when you plan with intention? It’s not just possible—it’s powerful.
