Can Your Nest Egg Last? Assess Your Retirement Savings

By Anastasia Taber, CFP®

Your retirement dreams often depend on building a solid nest egg, but the real challenge lies in making it last. Even sizable retirement savings can shrink quickly due to unexpected costs, changes in lifestyle, and market ups and downs.

So, how can you truly evaluate if your retirement savings will support you for the long haul? It requires more than just simple math. You need to take a detailed look at your desired retirement lifestyle, your current savings, projected expenses, and all potential income sources.

Let’s dive into the key steps to help you assess whether your retirement savings target is realistic and sustainable for the years ahead.

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 during 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:

1. It reduces your cash flow for non-essential items like housing, travel, and hobbies.

2. 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.

Are You Planning to Work in Retirement?

One of the better ways to stay active, keep your mind sharp, and feel purposeful after retirement is to work.

Some retirees decide to pursue consulting as a second career. Others choose to take a part-time, low-stress job and work at a retail store or family office. 

Whatever you decide, you won’t need to save as much to live comfortably if you plan to work after retirement.

Focus on Your Retirement Savings Target Today

Evaluating your retirement savings means taking a close look at your overall financial picture. Your lifestyle, debts, and personal goals all factor into determining your ideal retirement savings target.

At TABER Asset Management, your unique retirement savings target is our priority. Let us handle the details of your retirement planning so you can enjoy peace and comfort, knowing your finances are in trustworthy hands.

Get started today by scheduling a 15-minute intro phone call online or reaching out to us at 515-557-1860 or invest@taberasset.com. 

About Anastasia

Anastasia Taber is an Associate Advisor and leads the financial planning services division at TABER Asset Management, an independent, fiduciary wealth management firm, in Alexandria, Virginia, that strives to do one thing well: manage their clients’ money by creating wealth, building wealth, growing income, and preserving capital so they can experience financial freedom. Anastasia is a CERTIFIED FINANCIAL PLANNER® and has a Bachelor of Arts in English from Georgetown University. She has years of experience working for one of the largest REITS in the U.S., as well as in property management and accounting at a global law firm in Washington, D.C. Anastasia is passionate about exceeding her clients’ expectations and building caring, long-term relationships based on trust. She is known for being detail-oriented and committed to excellence in her work. Anastasia is a co-host on the Creating Wealth podcast. To learn more about Anastasia, connect with her on LinkedIn.