Making Your Retirement Savings Last: Three Key Questions to Ask
Once you know what you’ll be doing in retirement, how to pay for it and how to bridge any income gaps, you’ll be prepared when it’s time to make the transition.


“Have I saved enough to transition into retirement?” To address this question, you must start by answering these three thought-provoking queries:
Question #1: How much will it cost to support the lifestyle you envision for your retirement?
Whether you want to travel, volunteer or spend quality time with your children and grandchildren, staying socially, physically and intellectually active makes for a more fulfilling retirement. Personally, I’d like to become a paid public speaker, visit my bucket list destinations and support a cause I care deeply about.

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.
Once you know what you’d like to do, start figuring out the cost of living for that lifestyle. One classic rule for retirement preparation states that you should retire on 80% of the income you earned in your last year of work, while others may argue that you need 100% or more due to the increase in medical costs as you get older.
These are just general guidelines — your retirement strategy should be personalized to address your unique lifestyle needs, based on an assessment of your income and the resources available to you.
To start, look at your fixed expenses and discretionary spending. Fixed expenses are the necessary, ongoing costs in life that don’t change drastically in frequency or amount — like groceries, utilities, mortgage and car payments, insurance premiums and more. Discretionary expenses are the things that you spend money on but don’t need — like entertainment or eating out. Sometimes we call these our “wants” instead of “needs.” For instance, above and beyond my basic expenses (needs), I very much want to pursue woodworking as a hobby in retirement.
Due to inflation, it's also important to incorporate cost-of-living increases into both your fixed expenses and discretionary spending plans. Remember, you may be in retirement for 20 to 30 years, or more, and the cost of different goods and services will rise over time.
Question #2: Will you have enough income to support your retirement goals?
Once you have an idea of how much your ideal retirement might cost, think about whether you’ll have the necessary income to support it. Your goal should be to generate a stream of retirement income that lasts as long as you do.
For many, there are three key sources of retirement income: Social Security, pension payouts and retirement savings, such as money in 401(k) plans, taxable accounts and IRAs.
When determining if you have the necessary funds, make sure to factor what-if scenarios into your analysis, as life is filled with unexpected changes. For example, think about your health and how it can be impacted with age and the rising cost of health care. Best-case scenario: You’re in excellent health until you pass away, keeping medical costs low. Worse-case scenario: You need long-term care, where costs may be significant.
If you’re in good financial and physical health, you may want to hold off on dipping into Social Security to maximize your check. While some people claim Social Security benefits at age 62, which is the earliest age possible, you may want to consider delaying until as late as age 70, because your benefit amount will be higher.
Question #3: If you’re falling short on income, how can you bridge the gap?
There are many ways you can try to do this, such as delaying retirement, working part time, cutting expenses or increasing retirement savings. Suppose you put off retirement by two years; that could greatly improve your financial situation. After all, you would have two more years to save and earn potential investment returns.
So, you need to ask yourself if you want to stop working or keep some source of earned income. As someone who enjoys their work, I plan to continue doing it until I’m well into my 70s.
Another option can be to trade down your home. Downsizing and/or moving to a lower-cost state can be great ways to cut back on your expenses. Once your children are grown up, there isn’t a need to have all that extra space anymore. But, if you aren’t ready to sell, you can rent out the home to bring in extra cash as well.
So, what’s next? For help answering these important questions and developing a retirement savings and income strategy that works best for you, talk to a financial adviser or financial planner about strategies to support your lifestyle goals.
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.

Chuck Cavanaugh is the Head of Financial Planning for Citi U.S. Consumer Wealth Management, where he is responsible for leading the financial planning team. The team works with clients to develop and implement financial plans, including estate & trust planning, charitable giving, intergenerational planning, business succession, secured retirement income, risk mitigation and wealth protection.
-
Is Delta's New AI Pricing Bad News for Your Wallet?
Delta is using AI to "personalize" the price you pay for airfare. Here's what that could mean for your next trip.
-
The 10 Places Where Social Security Covers the Most (and Least) Of Your Expenses
On average, Social Security covers 30.11% of retirees’ spending. Fortunately, there are places where those dollars will stretch further and cover more of your spending.
-
How Divorced Retirees Can Maximize Their Social Security Benefits: A Case Study
Susan discovered several years after she filed for Social Security that she is eligible to receive benefits based on her ex-spouse's earnings record. This case study explains how her new benefits are calculated and what her steps are to claim some of the money she missed.
-
From Piggy Banks to Portfolios: A Financial Planner's Guide to Talking to Your Kids About Money at Every Age
From toddlers to young adults, all kids can benefit from open conversations with their parents about spending and saving. Here's what to talk about — and when.
-
I'm an Investment Pro: Here's How Alternatives Could Inject Stability and Growth Into Your Portfolio
Alternative investments can often avoid the impact of volatility, counterbalancing the ups and downs of stocks and bonds during times of market stress.
-
A Financial Planner's Guide to Unlocking the Power of a 529 Plan
529 plans are still the gold standard for saving for college, especially for affluent families, though they are most effective when combined with other financial tools for a comprehensive strategy.
-
An Investment Strategist Takes a Practical Look at Alternative Investments
Alternatives can play an important role in a portfolio by offering different exposures and goals, but investors should carefully consider their complexity, costs, taxes and liquidity. Here's an alts primer.
-
Ready to Retire? Your Five-Year Business Exit Strategy
If you're a business owner looking to sell and retire, it can take years to complete the process. Use this five-year timeline to prepare and stay on track.
-
A Financial Planner's Prescription for the Headache of Multiple Retirement Accounts
Having a bunch of retirement accounts can cause unnecessary complications. Consolidation can make it easier to manage your savings and potentially improve investment outcomes.
-
Overpaying for Financial Advice? A Financial Planner's Guide to Fees
Take five minutes to review how much you're paying for financial advice. If you're overpaying, you could be better off with an adviser who charges a flat fee.