By Trent Derrick, CMT®
Your retirement dreams rely heavily on having sound retirement savings, but the real question is how long those savings will last. Even a sizable nest egg can be stretched thin by unexpected expenses, lifestyle changes, or market ups and downs.
So how can you get a clear picture of whether your retirement savings will carry you through your retirement years? It takes more than simple math. You need to take a close look at the lifestyle you want, your current savings, anticipated costs, and potential sources of income.
Let’s walk through the practical steps you can take to see if your retirement savings are on track to support the life you’re dreaming about.
When Do You Want to Retire?
The first thing to consider when deciding how much money you need to save is your age, both now and in retirement. If you wish to retire early, you have fewer years to save for a longer retirement. Additionally, if you begin receiving Social Security payments prior to reaching full retirement age, you’ll have to account for a lower monthly payout.
The state of the stock market can also influence how much money is required and how long it lasts. Of course, you can’t actually predict the state of the stock market when you retire, but it’s still a wise idea to plan for the possibility of retiring in a bear market.
What Type of Lifestyle Do You Envision for Yourself?
Have you given any thought to the kind of retirement lifestyle you want to live? If you’re certain you want to travel, play golf, or spend time with your grandchildren, consider what that entails and the associated expenses.
For example, if you intend to travel, ask yourself the following questions:
- Do I want to travel abroad or domestically?
- How frequently would I like to travel?
- How would I prefer to travel? (e.g., car, airplane, or RV)
- Where would I like to stay? (e.g., a five-star hotel, an Airbnb, or with family members)
- Do I want my family to join me on the trip? Do I plan to cover their expenses too?
- Can I continue to live at my primary home? If so, who can watch my house and maintain it while I’m traveling?
Even if your dream is simply to spend time with your grandchildren, you should still think through the associated costs. To some, spending time with grandkids means babysitting a few times a week. For others, it means footing the bill for various trips for the entire family.
Either way, plan out the specifics of your vision so you can see how much money is needed to make that dream a reality.
What Is Your Current Debt Level?
Let’s talk about another retirement-income influencer: debt.
There are two significant drawbacks of taking on debt in retirement:
- It reduces your cash flow for non-essential items like housing, travel, and hobbies.
- It can deplete your retirement funds more quickly, meaning you might eventually run out of money or have to change your lifestyle.
If you carry debt, a smart move is to carefully examine your debt and determine how much cash flow you need in retirement to pay for anticipated expenses.
Before they retire, some people prefer to pay off any high-interest consumer debt. Some even go so far as to pay off their auto loans and mortgage.
How Do You Want to Leave a Legacy?
For many people, retirement planning isn’t just about enjoying life today, it’s also about what happens tomorrow. Whether your focus is supporting loved ones, contributing to causes you care about, or transferring a business, thoughtful planning can help direct your wealth where you want it to go.
Strategies may include updating your will, creating or revisiting trusts, reviewing beneficiary designations, or exploring charitable giving options. Considering these steps during retirement planning allows you to align your resources with your values and provide clarity for the next generation.
How Can You Prepare for Inflation and Market Shifts?
Even the best-laid retirement plans can be influenced by forces outside your control, like inflation or market downturns. Rising costs of living can gradually erode purchasing power, while volatility in the markets may affect the longevity of your savings.
Addressing these possibilities means thinking through flexible strategies, such as maintaining a mix of assets, considering investments that may help offset inflation, and stress-testing your plan against different economic scenarios. This kind of preparation can help you adapt over time while keeping your retirement goals in view.
Consult With a Professional to Grow Your Retirement Savings
Figuring out if your retirement savings are on track doesn’t have to be overwhelming. It starts with looking at the whole picture, including your lifestyle goals, current savings, debt, and what your ideal retirement actually looks like.
As an independent and fee-only financial advisor in Charleston, I work closely with small business owners and professionals who are actively building something that matters. These clients don’t want generic advice. They want a strategy, not a sales pitch, a partner who understands the stakes and respects their time, someone who can navigate not just markets but milestones like selling a business, transitioning into retirement, or growing wealth with purpose.
At Bellerophon Wealth Management, your goals are our compass. We handle the numbers with care, transparency, and integrity so you can focus on living your life.
Ready to see how your retirement savings measure up? Let’s talk. To get in touch, email trent.derrick@lpl.com or call 843-868-4042.
About Trent
Trent Derrick is a financial advisor and the founder of Bellerophon Wealth Management. He specializes in working with small business owners and professionals, providing comprehensive financial planning services including tax planning strategies, cash flow management, and retirement planning. As a Chartered Market Technician® (CMT®), Trent also brings deep technical market analysis expertise to help clients make informed investment decisions.
Trent obtained his bachelor’s degree from the College of Charleston, studied economics at the University of South Carolina, Columbia, and is a Chartered Market Technician® (CMT®) professional. Outside of the office, he serves as a guest lecturer for the College of Charleston’s MBA program and acts as chairman of the Market Technician Association’s Charleston chapter. To learn more about Trent, connect with him on LinkedIn.
The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.
Bellerophon Wealth Management and LPL Financial do not offer tax advice or services.