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When it comes to retirement planning, the saying goes, “the earlier, the better.” But what does that actually mean? How early do you need to start planning to have a comfortable retirement? And what steps should you take along the way?

In this article, we’ll walk you through everything you need to know about retirement planning. We’re taking a big, complex subject down to its basics.

We’ll start by discussing what retirement planning is and the steps you need to take in order to prepare. Then, we’ll talk about some of the different retirement income options available to you and how to select the right retirement plan for you. Finally, we’ll give you tips on saving for retirement and minimizing your taxes.

So let’s get started!

What Is Retirement Planning?

Retirement planning is the process of intentionally working through the many factors to consider in order to retire comfortably. It involves calculating your expected retirement expenses and then figuring out how best to save for them. Still, it also involves soul searching and thinking of what kind of retirement you want to pursue.

There are a few key things to keep in mind when planning for retirement:

  • Start with the basics. Retirement planning can be complex, but starting with the basics will give you a strong foundation.
  • Earlier is better, but you’re never too old to start. Begin implementing your retirement spending habits now so you’re prepared when the time comes.
  • Expect the unexpected. Nobody could have seen the economic circumstances we’ve seen in the past few years.
  • Aim for adaptability. Your retirement plan will likely need to be adjusted as life happens.

While those are excellent ideals to work toward, the most important thing is to begin formulating a plan. Fortunately, with some guidance, retirement planning doesn’t have to be the daunting task it may seem at first.

Dechtman Wealth Management is here to guide the way. We’ll break down tried and true retirement planning steps next, but remember, everyone’s financial situation is unique. Some elements may be highly pertinent, while others may not apply to you. For a comprehensive evaluation, reach out to our team for a one-on-one assessment of how to plan for retirement, given your personal situation.

Retirement Planning Steps

You can start retirement planning by following these key steps:

  1. Know when to start planning for retirement.
  2. Determine how much money you’ll need in retirement.
  3. Understand your options for retirement income
  4. Set and Order Your Financial Goals
  5. Know how early you can retire.
  6. Select the right retirement plan
  7. Build and monitor your portfolio

Now, let’s take a more in-depth look at each retirement planning step.

Know When to Start Planning for Retirement

The best retirement plans start early, but you’re never too old to begin saving. The key is to start as soon as you can and make retirement savings a priority.

If you have yet to start saving for retirement, don’t panic. Starting early is hugely helpful, but there are plenty of retirement planning strategies to help make up for a late beginning. Even the smallest nest egg can go a long way, so never neglect the power of saving even a dollar.

Beyond simply aiming to start early, there are other times when it’s wise to review your retirement planning strategy. For example, when you experience any of the following life changes, it’s a good time to revisit your retirement plan:

  • You get married or divorced.
  • You have or adopt a child.
  • You experience a change in your employment status.
  • You or your spouse become ill.
  • You encounter an inheritance or financial windfall.
  • You relocate to a new city.
  • You have or plan to make a major purchase.

All of these have the potential to massively change your long-term financial goals and may require you to adjust your retirement strategy.

Determine How Much Money You’ll Need in Retirement

This is a tricky part of retirement planning because it’s hard to know exactly how much you’ll need. Not only that, but many people go through major changes in their life that alter their path. We might anticipate a specific life plan when we create our retirement strategy, but changes are bound to come up. This is why it’s so crucial to rethink and reconsider your retirement plan when you encounter those major life experiences mentioned above.

One way to get a rough estimate how much you’ll need in retirement is by using a retirement calculator. It will take into account your current age, salary, and other essential factors to give you an estimate of how much you should have saved by the time you retire.

When using a retirement calculator, it’s important to be as accurate as possible in your inputs to obtain the most reliable estimate of how much you’ll need to have saved. All retirement calculators are different so it’s important to be aware of what assumptions are used in the software.

Want to get ahead of the game with proactive retirement planning? When you want to know how a major life change would affect your retirement, plug your hypotheticals into this retirement calculator. This way, you’re honoring your future needs while pursuing the life and lifestyle that matters to you.

While your personal situation will determine how much you need to have saved by retirement, there are some general costs that everyone should factor into their estimate. These include:

Healthcare costs: In retirement, you’re likely to experience more health problems than in your working years. Consider utilizing an HSA while you’re still working. With a bit of intentionality, this health savings vehicle has the potential to be an excellent tax reduction strategy while also saving for future health expenses.

Life insurance: If you have a spouse or children, you’ll want to make sure they’re taken care of financially in the event of your death. Term life insurance is a very affordable product that can protect your family.

Housing: Where will you live in retirement? Will you downsize, move to a cheaper area, or stay put? Maybe geo-arbitrage is more your style, and you’ll retire in a different country where the US dollar goes further, and your healthcare expenses are met. Whatever your dreams are, start there and see if you can craft a retirement plan that will make it a reality.

Utilities: These include costs like electricity, gas, water, trash, internet, and phone. It’s hard to know what these expenses could look like as our reliance on technology changes, but it’s safe to say they’ll be a factor in retirement.

Food: Food is another essential expense. While this cost is hard to predict, it’s also very much within your control. Will you eat out more to save money, cook at home, or sign up for a meal delivery service? For help estimating food costs in retirement, in 2023, the typical family of is 4, spending around $300 a week on groceries, about $75 per person.

Entertainment: How will you spend your time? Traveling, going to concerts, watching movies, and exploring new hobbies are all popular choices for retirees. Of course, retirement can be difficult without a solid plan, but if you can create an intentional retirement plan, make sure you factor in some fun!

Travel: Many people travel more in retirement and in different ways than you might think. Whether you enjoy weekend tours to wine country, a cruise to the Caribbean, or embrace slow travel on the road, consider saving for travel in retirement.

Personal retirement goals: What do you want to accomplish in retirement? Do you want to spend more time with family, learn a new skill, uplift your community, or start a business? Your retirement is one part of your life you really get to plan and define for yourself. No retirement planning website or tool can understand your heart. Retirement planning should be empowering, not daunting.

Your personal post-crisis risk tolerance: After enduring a global pandemic and subsequent economic crisis, your risk tolerance may have changed. If you’re now less willing to take risks with your money, that’s okay, and your retirement plan can reflect that.

If you’re unsure where to start, that’s okay, too. Read on or give us a call at 303-741-9772. We’re ready to help bring clarity to your retirement planning strategy.

Understand Your Options for Retirement Income

There are a few different options for generating income during retirement. The most common are pensions, social security, annuities, and savings. However, we’re in a rapidly changing world, so we’ll share some unconventional retirement income planning strategies, too.

Pensions: A pension is a regular payment that an employer makes to an employee after they retire. The pension amount usually depends on your ending salary and length of employment.

Social Security: Social Security is a government-provided benefit that pays out monthly to retired workers. The amount of the benefit is based on your earnings history and other factors. Knowing what to expect from Social Security is a pillar of many retirement planning strategies.

Annuities: An annuity is an insurance product that provides regular payments in retirement. Annuities can be either fixed or variable, and you can choose to receive payments.

Retirement Savings: One of the most common sources of retirement income is savings. This can include money saved in a 401(k), 403(b), IRA, or other retirement savings accounts. Once you have your sources identified you’ll also gain an idea of how long your savings will last.

Rental Income: Another option for generating retirement income is renting out your own property, like a vacation home or investment property. Retirement hack: People are embracing the sharing economy and are renting their homes while they travel, offsetting one expense with another.

Business Income: If you’re self-employed or have a small business, that can be another source of retirement income. Semi-retirement is often done by choice due to a love of an industry or a sense of control, and it can be a great way to slowly ease into retirement. As people live longer, a natural progression for a business owner may be a slow retirement.

Passive Income: If you’re looking for more creative ways to generate retirement income, consider passive income streams. These are typically investments or business endeavors that require little to no work on your part after they’re created but still generate income. For example, you might invest in a rental property and hire a property manager, or you might start a blog and sell advertising space or receive royalties for creative endeavors.

Define and Order Your Financial Goals

After you’ve determined how much money you’ll need in retirement and understand your options for generating retirement income, it’s time to set your financial goals.

Your retirement goals should be SMART: specific, measurable, attainable, relevant, and time-bound.

Some examples of SMART retirement goals are:

I will have $1 million saved for retirement by December 31, 2030.

I will contribute $18,000 to my 401(k) each year for the next five years.

I will downsize my home and use the extra money to pay off my mortgage by age 70.

In addition to making sure your goals follow the SMART criteria, you should also order them by priority. This will help you focus your efforts and make the most of your retirement planning. For example, we might prioritize these goals by their time frames, with the shortest-term goal coming first:

I will contribute $18,000 to my 401(k) each year for the next five years.

I will have $1 million saved for retirement by December 31, 2030.

I will downsize my home and use the extra money to pay off my mortgage by age 70.

Know How Early You Can Retire

One of the most frequent questions as you learn how to plan for retirement is, “How early can I retire?” The answer primarily depends on when you start saving, how much money you’ll need in retirement and your sources of retirement income in retirement.

If you’re hoping to retire as early as possible, there are a few things you can do to make that happen:

  1. Start saving as early as possible. The sooner you start, the more time your money has to grow.
  2. Make sure you contribute enough to your retirement accounts to maximize employer matches or other benefits.
  3. Consider ways to boost your retirement income, like starting a side business or investing in real estate.
  4. If your goal is to retire before 59 ½, make sure you have enough saved in non-retirement investment accounts.

With careful planning and execution, you can achieve your goal of retiring early. Make sure you have a solid plan to enjoy your retirement years to the fullest.

Select the Right Retirement Plan

Now that you know how much money you’ll need in retirement and have set your financial goals, it’s time to select the right retirement plan. There are a variety of retirement plans available, and the best one for you will depend on your specific situation.

If you’re employed by a company, you may have access to a 401(k) or 403(b) retirement plan. These plans allow you to contribute a portion of your salary on a pre-tax basis and often offer employer-matching contributions.

If you’re self-employed, you may want to consider a Solo 401(k) or SEP IRA. These plans offer many of the same benefits as employer-sponsored retirement plans, but they’re designed for self-employed individuals and small business owners.

There are also a variety of other retirement savings options available, such as traditional IRAs and Roth IRAs. The best way to decide which retirement plan is right for you is to talk with a financial advisor who can help you understand the pros and cons of each option.

Build Your Portfolio

Once you’ve selected the right retirement plan, it’s time to build your portfolio. Your portfolio is a collection of investments you’ll use to generate retirement income.

The first step in building your portfolio is to determine your asset allocation. This is the mix of different types of investments that you’ll hold in your portfolio. For example, you might allocate 50% of your portfolio to stocks, 30% to bonds, and 20% to cash.

You should base your asset allocation on your investment goals, risk tolerance, time horizon, and income needs, to name a few factors. For example, if you’re close to retirement and have a low risk tolerance, you might allocate a larger percentage of your portfolio to cash and bonds.

Utilize a Financial Advisor

Once you understand the asset allocation that you prefer, you can move on to choose specific investments. This is a very important part of the process, as the specific investments you select will greatly impact your ability to reach your financial goals.

If you’re unsure or unfamiliar with investment options, this is a smart time to connect with a financial advisor who can guide your investment management.

Choose Retirement Investments

Once you’ve determined your asset allocation, whether with the help of an advisor or on your own research, you can start investing in the individual securities that make up your portfolio. If you’re investing in a 401(k) or other employer-sponsored retirement plans, you’ll typically have a limited selection of investment options.

If you’re investing in a Roth IRA or traditional IRA, you’ll have a much wider range of investment options. This includes everything from stocks and bonds to mutual funds, ETFs, and alternative asset classes.

The best retirement accounts offer tax advantages and additional saving incentives such as matching contributions. As you review your options, you’ll be able to choose from a combination of the following:

  • Stocks
  • Bonds
  • Alternative asset classes
  • Actively managed mutual funds
  • Index funds
  • Exchange traded funds (ETFs)
  • Target date funds
  • High-yield savings accounts
  • Simple IRA
  • Traditional IRAs
  • Roth IRAs
  • Traditional 401Ks
  • Roth 401Ks
  • Simplified employee pension plans

Beyond these, new investment options are always emerging. For example, you can now invest in digital assets like Bitcoin and Ethereum through a variety of platforms or access pre-IPO private equity through online marketplaces.

As we mentioned in the beginning, the best retirement plans are adaptable!

Account for Taxes (and Know How to Minimize Them)

It probably doesn’t come as a surprise that taxes will affect your retirement income, so a smart tax planning strategy is key. While working, you’ll pay taxes on your salary and any investment income you earn. You’ll still be responsible for taxes on investment and interest income in retirement.

If you have a traditional IRA or 401(k), you’ll likely owe taxes on withdrawals from those accounts. However, with a Roth IRA or Roth 401(k), you won’t owe any taxes on withdrawals since you’ve already paid taxes on the money you’ve contributed.

You should expect to pay taxes in retirement on:

  • Investment income
  • Interest income
  • Retirement savings accounts
  • Social Security (over certain thresholds)


Annuities are insurance products that can provide a stream of income in retirement. There are two main types of annuities:

Immediate annuities: These annuities begin making payments to you soon after you purchase them. You make a lump sum payment, and in return, the annuity pays you a fixed income for life.

Deferred annuities: With these annuities, you make regular payments into the account over time. The money in the account grows tax-deferred, and you can start taking withdrawals at retirement age.

Annuities can be a strategy to generate retirement income, but they’re not right for everyone. Do your research and understand all the features, risks, and fees before purchasing an annuity.

Increase your Net Worth

Your net worth is the total value of your assets minus your liabilities. To retire comfortably, you’ll want to have a high net worth so that you can cover your living expenses and still have money left over.

There are a few key ways to increase your net worth:

Buy a house: A home is typically the biggest asset people own. While the housing market has its ups and downs, over time, homes usually go up in value.

Pursue a higher salary: Earning a higher salary is one of the most direct ways to increase your net worth. If you’re able to get a raise or promotion, this will give you a bigger budget to work with when it comes to saving for retirement.

Sell a business: If you own a business, selling it can be a great way to generate a large sum of money that can be used to fund your retirement.

Decrease expenditures: Another way to increase your net worth is to simply spend less money. This could mean downsizing to a smaller home, cutting back on unnecessary expenses, or living a more frugal lifestyle.

Develop a Retirement Spending Strategy

Another helpful step in retirement planning is to develop a strategy for spending your money in retirement. Just as you created a budget to manage your finances while working, you’ll need to create a budget for your retirement years.

When developing your budget, be sure to consider:

Your expected sources of income: This could include things like Social Security, pension payments, and withdrawals from retirement accounts.

Your anticipated expenses could include everything from groceries and housing to travel and healthcare expenses. Understanding what to expect from Medicare can help bring clarity to this important piece of the retirement planning puzzle.

Inflation: Over time, the cost of goods and services increases due to inflation. Be sure to account for this when estimating your future expenses.

The important thing is to have a plan to make the most of your retirement years.

How to Start Saving

If you haven’t already started saving for retirement, now is the time to start. The sooner you begin saving, the more time your money will have to grow. And the more money you save, the more comfortable your retirement will be.

There are a few different ways that you can begin saving for retirement. Some you may already have underway; others may be easy wins that quickly improve your finances.

Pay Off Debt

One of the best things you can do for your retirement savings is to pay off any debt. This includes credit card debt, student loans, and other types of debt.

By paying off your debt, you’ll free up more money each month that can be used to save for retirement. And by getting rid of high-interest debt, you’ll save money on interest payments that can be used to grow your retirement savings.

If you’re not sure where to start, try putting together a debt-reduction plan. This will help you assess your debts and create a strategy for paying them off. If you have long outstanding issues or collections, work with a debt relief attorney to understand the legal risks and implications of unpaid debt.

Create a Budget

Another helpful step in the retirement planning process is to create a budget. This will help you track your income and expenses so that you can see where your money is going each month.

When creating your budget, be sure to include all of your regular expenses, such as housing, food, transportation, and healthcare. You should also set aside money each month for things like savings, investments, and debt repayments.

If you’re not sure where to start, there are a number of budgeting apps and software programs that can help.

Set Up Auto Transfers

One of the easiest ways to save for retirement is to set up auto-transfers from your paycheck into a retirement account. This way, you won’t have to think about saving each month – the money will automatically be transferred from your paycheck into your retirement account.

If you’re not sure how to set up an auto-transfer into your retirement account, speak with your employer or retirement plan administrator.

Additional Retirement-Planning Tips

There are a few other things beyond the above you can do to help ensure a comfortable retirement.

Aim to have at least 10 times your pre-retirement income saved.

This may seem like a lot, but it’s a good benchmark to aim for. If you have less than this saved, you may want to consider working a few extra years or making some changes to your lifestyle so that you can boost your savings.

Implement your retirement spending habits now

One way to help ensure a comfortable retirement is to start practicing your retirement spending habits now. This way, you can get used to living on a defined income, and you’ll have a better idea of how much money you’ll need to save.

Consider the idea of a part-time job in retirement.

To help make ends meet in retirement, consider working a part-time job. This can be a great way to supplement your income and give you something to do in retirement. As people are living longer, they are finding a need to work longer. Opting for a part-time position for a longer time may be more appealing for some.

Take advantage of catch-up contributions.

If you’re 50 or older, you may be able to make catch-up contributions to your retirement account. These are additional contributions that you can make above the regular contribution limit.

Catch-up contribution limits for 2022- In 2022, the regular contribution limit for a 401(k) is $20,500, with catch-up contributions for those over 50 raising that to $27,000. The regular contribution limit for an IRA is $6,000, with catch-up contributions raising the amount to $7,000.

Plan for the Non-Financial Side of Retirement

In many ways, our society has discovered just how important it is to have a plan for the non-financial side of life. Recognizing the importance of things like mental preparedness and knowing how you’ll spend your time can make a big difference in how comfortable you are in retirement.

If you’re not sure where to start, there are many resources available to help. The AARP has a wealth of information on retirement planning, including articles, checklists, and tools. The Retirement Living website also offers several helpful resources, including an article on the non-financial aspects of retirement.

The Bottom Line

Making sure you have a comfortable retirement requires planning and effort. But if you start now and make use of the resources and tips available, you can increase your chances of enjoying a comfortable retirement.

One of the best ways to ensure you’re on track to reach your retirement goals is to utilize the services of a financial advisor. The right financial advisor can help create the right retirement plan for your unique situation. Dechtman Wealth Management is here to help design the retirement you deserve.

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Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Dechtman Wealth Management, LLC [“DWM”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from DWM. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. DWM is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the DWM’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at

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