Five Keys to Retirement Planning and Peace of Mind
Long, worry-free retirements don't just happen. You have to make them happen. The good news is that it may not be as hard as you think.


Retirement is a significant milestone, often accompanied by a mix of excitement and apprehension. As we transition into our golden years, it’s crucial to approach retirement with a well-prepared plan to ensure financial stability.
Here are some important aspects of retirement planning to keep in mind:
1. A thorough appraisal of expenses and budgeting
Taking a hard look at your budget now in your working years and creating a future budget are fundamental steps in retirement planning. You must define your current expenses and project the future costs you’ll have when you’re no longer earning a salary. Include your ongoing expenses, such as mortgage payments, car loans, dining and lifestyle needs.
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Some retirees find themselves spending more money due to increased leisure activities. As some like to say, “Once you retire, every day is Saturday.” If we think about our spending habits, we tend to spend more on Saturdays, whether that's trips to Home Depot, the grocery store or restaurants. You want to work to create a realistic budget for retirement that accurately reflects your lifestyle.
2. The 4% rule and alternative withdrawal strategies
A commonly discussed guideline in retirement planning is the 4% rule, which suggests that retirees can withdraw 4% of their retirement savings annually without running out of money. There are many nuances to this approach, but in general, it looks at a 60/40 (60% bonds, 40% stocks ratio) portfolio and how it projects over a 30-plus-year retirement.
An alternative to the 4% rules is the “guardrails approach,” which allows for flexible withdrawals based on market performance. This method involves adjusting spending when the market is down and enjoying more spending when the market is up. Both the 4% rule and the guardrails approach aim to ensure financial longevity, but personal preferences and risk tolerance play a significant role in choosing the right approach.
3. Extra sources of retirement income
Social Security and pensions are traditional sources of retirement income, but they may not cover all your expenses. Having additional retirement income sources can be helpful if retirement savings are not enough.
One example is owning rental properties. Renting out a paid-off property can provide a steady income stream and help mitigate inflation’s impact. At the same time, be careful of the risks of a rental property. Make sure you have the proper insurance and that it’s a property that won’t go vacant for long stretches of time.
4. Health care and long-term care planning
Health care costs are a significant concern for retirees. Fidelity reports a married couple should set aside over $300,000 for retirement health expenses. If you are still preparing for retirement, using health savings accounts (HSAs) can be a great way to save for your future health care expenses.
5. Maintaining emergency funds
Maintaining an emergency fund is essential to handle sudden, unexpected expenses. Get a high-yield savings account or a money market fund to ensure that emergency funds are earning interest. This financial cushion can cover sudden costs like home repairs or medical bills, preventing retirees from accumulating high-interest debt.
Also, keep a designated amount for emergencies in your savings account. One rule of thumb is to save three months’ worth of your normal living expenses. Doing so can help you cover one of those unwelcome surprise expenses.
Preparing for retirement requires careful planning and ongoing adjustments. Regularly update your retirement plans and seek professional guidance to navigate the complexities of retirement finances. By understanding your retirement needs well ahead of retirement and planning for them accordingly, you can enjoy your golden years with confidence and financial security.
Dan Dunkin contributed to this article.
The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.
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Josh Leonard is the president and a financial adviser at Leonard Advisory Group, LLC. He is the host of the “Relax, It’s Retirement” podcast and holds regular informational webinars. He is a married father of two and an aspiring endurance athlete. He holds a life insurance license and has passed the Series 65 securities exam. (Investment Advisory Services are offered through Leonard Advisory Group, LLC, a registered investment adviser. Insurance products and services are offered and sold through Joshua Leonard, an individually licensed and appointed agent.)
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