The Key to Setting Retirement Goals? Details
You know what you want out of retirement, right? Are you sure you know EXACTLY what you want? Having detailed goals is essential to retirement planning.


“A goal properly set is halfway reached.” – Zig Ziglar. We all have retirement goals, but unfortunately, we tend to be very vague and noncommittal about them.
Most investors will tell their financial adviser that they’d like to “retire comfortably” or “maintain their current lifestyle,” but what does that really mean? Many advisers tend to avoid the issue of goal setting, as it places greater emphasis on measurable milestones and thereby accountability to their clients. Investors, too, tend to undermine this process, as they also have a habit of being inexplicit to minimize future feelings of guilt for not reaching their goals.
Whether you are already retired, nearing retirement or in your prime earning years, setting specific and quantifiable investment goals is paramount to reaching them and critical to investment success (in the next column I will discuss why “beating the market” is a silly and meaningless goal).

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Step One: Ask Yourself This Important Question
Start with asking a very simple question with a very complex answer: “What do I want?” Then write down the responses (if you have a spouse or significant other, they should go through the same exercise and then you can compare notes).
Once you’ve identified these specific goals, determine what you expect these goals to cost. For example, if your goal is to travel three times per year to different continents and pay off your home within five years, determine how much that will cost. Don’t forget to account for inflation. A ballpark of 3% annually is a good starting point.
Step Two: Consider Costs
Next list your lifestyle choices and their costs, i.e., what does day-to-day living cost. Estimate how much cash flow your portfolio (excluding other income) will need to generate to support this.
By now, you’ve probably surmised that your dreams and aspirations are very expensive and that your portfolio would have to generate monstrous returns for you to be able to achieve your goals, and that’s OK.
Step Three: Prioritize
Now comes the hard work! It’s time to prioritize goals and have contingency plans in the event certain returns are not achieved in a given period of time.
For instance, let’s assume you have $2 million in IRA, 401(k) and other investments, your $750,000 home is paid off and you are receiving $2,000 per month in Social Security. You have estimated that your day-to-day expenses at $10,000 per month. This means that your portfolio will need to generate $8,000 per month ($96,000 per year) in cash flow for you to meet these expenses. This amounts to a near 5% withdrawal rate, which by most standards is viewed as unsustainable over long periods of time without depleting principal.
Remember, if you are 65 there is a better than 50% chance that either you or your spouse will live into your 90s, and that means that inflation and unexpected costs will have an increasing impact, and you have yet to travel the world or do any of the other things on your goals list.
Prioritize and be innovative – what if in 10 years you take out a reverse mortgage on your paid-for home? That $250,000 cash infusion changes the math to a withdrawal rate of just over 4%. In simple terms, have aspirations and dreams, prioritize them and then match up their costs to your assets.
It’s a lot of work, but you’ll be able to sleep soundly knowing you have a well thought out plan and have accounted for predictable variables.
The Rest of the Series
This column is the first in a six-part series on investor education.
- Column 1: Understanding your goals
- Column 2: Why benchmarking to the S&P 500 is not a good strategy
- Column 3: It’s about cash-flow, not returns
- Column 4: How much are you paying for your portfolio?
- Column 5: 5 critical questions to ask your financial advisor
- Column 6: ‘Senior Inflation,’ the not so silent retirement killer
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Oliver Pursche is the Chief Market Strategist for Bruderman Asset Management, an SEC-registered investment advisory firm with over $1 billion in assets under management and an additional $400 million under advisement through its affiliated broker dealer, Bruderman Brothers, LLC. Pursche is a recognized authority on global affairs and investment policy, as well as a regular contributor on CNBC, Bloomberg and Fox Business. Additionally, he is a monthly contributing columnist for Forbes and Kiplinger.com, a member of the Harvard Business Review Advisory Council and a monthly participant of the NY Federal Reserve Bank Business Leaders Survey, and the author of "Immigrants: The Economic Force at our Door."
-
Higher Summer Costs: Tariffs Fuel Inflation in June
Tariffs Your summer holiday just got more expensive, and tariffs are partially to blame, economists say.
-
Don’t Miss Alabama Tax-Free Weekend 2025
Tax Holiday Ready to save? Here’s everything you need to know about the 2025 back-to-school Alabama sales tax holiday.
-
New SALT Cap Deduction: Unlock Massive Tax Savings with Non-Grantor Trusts
The One Big Beautiful Bill Act's increase of the state and local tax (SALT) deduction cap creates an opportunity to use multiple non-grantor trusts to maximize deductions and enhance estate planning.
-
Know Your ABDs? A Beginner's Guide to Medicare Basics
Medicare is an alphabet soup — and the rules can be just as confusing as the terminology. Conquer the system with this beginner's guide to Parts A, B and D.
-
I'm an Investment Adviser: Why Playing Defense Can Win the Investing Game
Chasing large returns through gold and other alternative investments might be thrilling, but playing defensive 'small ball' with your investments can be a winning formula.
-
Five Big Beautiful Bill Changes and How Wealthy Retirees Can Benefit
Here's how wealthy retirees can plan for the changes in the new tax legislation, including what it means for tax rates, the SALT cap, charitable giving, estate taxes and other deductions and credits.
-
Portfolio Manager Busts Five Myths About International Investing
These common misconceptions lead many investors to overlook international markets, but embracing global diversification can enhance portfolio resilience and unlock long-term growth.
-
I'm a Financial Planner: Here Are Five Smart Moves for DIY Investors
You'll go further as a DIY investor with a solid game plan. Here are five tips to help you put together a strategy you can rely on over the years to come.
-
Neglecting Car Maintenance Could Cost You More Than a Repair, Especially in the Summer
Worn, underinflated tires and other degraded car parts can fail in extreme heat, causing accidents. If your employer is ignoring needed repairs on company cars, there's something employees can do.
-
'Drivers License': A Wealth Strategist Helps Gen Z Hit the Road
From student loan debt to a changing job market, this generation has some potholes to navigate. But with those challenges come opportunities.