The amount you need to retire depends on your expected lifestyle, monthly expenses, healthcare costs, life expectancy, and the income sources available to you — including Social Security, pension benefits, and investment accounts. A commonly referenced guideline is saving 10 to 12 times your annual income by retirement, but this varies significantly based on your individual situation. The most reliable way to determine your retirement number is to build a personalized retirement income plan that models your specific income sources, spending needs, and tax situation. We can help you build that plan and understand exactly where you stand.

A pension — also called a defined benefit plan — provides a guaranteed monthly income for life, funded and managed by your employer. Your benefit is typically based on your years of service and salary history. A 401(k) — also called a defined contribution plan — is an employee-funded savings account where you direct your own contributions and investment choices. The amount available at retirement depends on how much you saved and how your investments performed. Many workers have access to both, and coordinating them effectively is an important part of retirement income planning.

A 401(k) rollover is the process of moving your retirement savings from a previous employer's plan into an IRA or your new employer's plan. This is typically done when you change jobs or retire. Rolling over can give you more investment options, consolidate your accounts, and provide more flexibility in managing distributions. However, rollover decisions involve tax, fee, and investment considerations that vary based on your individual situation. It is important to evaluate whether a rollover is in your best interest before making a decision. A direct rollover — where funds move directly between accounts — avoids mandatory withholding and potential tax consequences.

You can begin taking Social Security as early as age 62, but your monthly benefit will be permanently reduced. Waiting until your full retirement age — which is 66 or 67 depending on your birth year — gives you your full benefit. Delaying further until age 70 increases your benefit by approximately 8% per year. The right time to claim depends on your health, other income sources, tax situation, and whether you are married. For married couples in particular, Social Security timing can be one of the most impactful decisions in a retirement plan. We can help you model different claiming scenarios to find the strategy that works best for your situation.

A required minimum distribution (RMD) is the minimum amount the IRS requires you to withdraw from certain retirement accounts — including traditional IRAs and 401(k)s — each year beginning at age 73 (as of 2023 law). Roth IRAs are not subject to RMDs during the owner's lifetime. Failing to take your RMD on time can result in a significant tax penalty. RMD planning is an important part of retirement income strategy because the amount you are required to withdraw can affect your tax bracket, Medicare premiums, and Social Security taxation. We help clients plan their distributions to manage these impacts as efficiently as possible.