Making the Most of Your Financial Resources in Retirement

When conducting a financial analysis for retirement planning, you should review the factors that will contribute to your ability to achieve the retirement lifestyle you want.  When you retire, you will probably spend less money on some things, and more money on others, but you don’t want to find yourself in a position where you are unable to sustain the lifestyle you had worked for.  You have worked your entire adult life, saving with every paycheck, dreaming of the time when you will be able to shift gears into a new pace which will allow you to enjoy the fruits of your labor.  Your income, future expenses, liabilities and life expectancy should all be considered when conducting a financial analysis for retirement planning, to ensure that the vision you have for your future can become a reality with your resources.  Whether you are five years away from retirement or are just beginning your career, there are steps you can take to establish a retirement plan that will keep you on track to achieve your goals.

When you are no longer working, you will have to rely on the retirement preparations you make now to sustain you for 10, 20 or possibly 30 years.  What do you plan to be doing with that time?  Do you want to travel?  Do you want to live near your children and grandchildren?  Do you want to split your time between living in a warmer climate and where you do now?  Do you want to pursue interests you’ve always had, but never found the time for? 

Do you have any idea how much your desired retirement lifestyle will cost to maintain?  A retirement income analysis can help bring these dreams into focus and will evaluate your available resources.  While a more targeted retirement income analysis generally takes place within five to ten years of expected retirement, understanding the various ways to save can help you begin your preparations at any age.    


  1. part-time work
  2. retirement savings account such as a 401(k) or Roth IRA
  3. pension
  4. Social Security
  5. stock-based compensation from employer
  6. employer-sponsored retirement account
  7. residual income from investments such as real estate
  8. taxable accounts
  9. interest in a business

Retirement income can come from any or all of these sources.  Not everyone will have a pension or an employer-sponsored retirement account.  Not everyone will receive stock-based compensation.  The key to doing a retirement income analysis is to identify your sources of retirement income and create a plan to maximize those resources. 


  • Are you aware of all the benefits your employer offers?  Do a little research to make sure you are taking advantage of every savings opportunity that is available to you.  If your employer offers matching contributions to your retirement savings account, are you making the maximum contribution possible? 
  • If you are in the early stages of your career, be sure to establish retirement savings accounts and do your best to contribute the maximum allowed amount.  It can be challenging to see the value in putting aside money for what might be decades away, especially when you have goals you want to accomplish now, but you will have time on your side to take advantage of compounded returns and your money will grow significantly more than if you wait. 
  • Reduce your debt.  Ideally, you want to have as little debt as possible.  The closer you are to retirement, the more important this becomes. 
  • Review your investment portfolio.  Do you have an investment portfolio that is properly balanced within your risk tolerance?  Is the asset allocation right for you?  Earlier in your career, while you have the advantage of long-term investments and the ability to ride out fluctuations within the market, a portfolio containing more stocks may be right for you.  Depending on market conditions, changes in your life such as a job loss, inheritance, or numerous other circumstances, you may need to rebalance your portfolio.  Preparing to make the transition into retirement is another key time to analyze your investment portfolio, asset allocation, and asset location so that your portfolio is best positioned for the next phase of your life. 


When you are within five or ten years of retirement, it’s a good time to start getting specific in your plans.  At this point, you’re going to want a clear strategy for preserving your retirement assets, maximizing your income streams, and meeting your established retirement goals. 

There are questions for which you’ll want to start gathering answers.

  • Do you have enough money saved in an emergency account?  It has long been advised that you have three to six months of emergency expenses set aside in a savings account.  This remains just as important during retirement as it is during your working years.
  • Do you have sufficient assets and are they positioned correctly to meet your financial goals?  You have saved your whole life and in retirement you will start to spend down your investment portfolio.  Having a strategic plan, incorporating your specific circumstances, income, assets, expenses and tax bracket will assist you in optimizing your portfolio, your investments and your distribution strategy.  How much should be distributed from retirement plans vs. spent from individual and joint accounts?  Are the right assets held within the correct accounts to meet my needs?  Are my current assets the best investments for me at this stage in my life or are there changes that I should be making?
  • At what age do you plan to retire?  The difference of a few years can have a significant impact on your finances.  An analysis which models the differences can be instrumental in helping you make the decision of when to retire.
  • Do you know how much your retirement income will be?  Distributions from retirement savings accounts have different limits and requirements, pensions may go into effect at different ages, and Social Security benefits vary.  How much can you comfortably withdraw from your portfolio monthly?  Annually?  What will your cash flow be and when will it become available?
  • Do you understand how your retirement income will be taxed?  Everything from the state you live in to the sources of your retirement income will factor into the taxes you will pay.
  • What will your Social Security benefits be?  Depending on what age you begin collecting benefits, the amount can vary.  Understand the facts under various circumstances so that you can begin collecting at an age that is right for you. 
  • Do you have a retirement budget?  Do you have an actual cost to assign to your retirement dreams?  It’s fun to talk about cruising around the world or eating at a different restaurant every night when you retire, but now it’s time to determine what your budget will allow.  Housing, food, healthcare, transportation (car maintenance, gas, insurance, repairs) and taxes all must be accounted for while you’re planning your transition into your retirement lifestyle.  There’s no reason “fun stuff” cannot be included, but the fixed income of retirement requires you to prepare accordingly. 
  • Will you downsize your home?  Many people find that after their children have grown and moved out, they are left with a home which is larger than they need.  Overall expenses can be decreased by downsizing.  If you’ve built significant equity in your home, selling it may net you a large down payment for a smaller home which might be more suitable for your needs.  Along with less square footage will also come smaller monthly utility and maintenance bills.
  • What will your health insurance cost?  For some people who have had employer-paid health benefits it can be startling to see how much this will cost in retirement, especially if you are planning to retire at a younger age.  Medicare becomes available at age 65 but will not cover all your healthcare expenses.  You’ll need to figure in the expense of a Medigap plan to offset the costs that are not covered by Medicare.

It can be helpful to speak with a financial planner when conducting your retirement income analysis.  They can evaluate your projected retirement expenses and analyze if you are on target to meet your goals.  They may use tax strategies to create a plan that will allow you to make the most of your saving and investment accounts, and offer suggestions as to when it might be ideal for you to retire and begin collecting your Social Security benefits.  You may discover that you need to make some adjustments to the way you are preparing for your future, but that those changes might make the difference in you achieving the retirement of your dreams.