Secure Your Future: A Complete Guide to Retirement Planning

Updated: 3:23 PM PST Feb 19, 2025

Retirement in 2025? Before submitting your resignation, consider the advice of CAPTRUST vice president and financial advisor kathryn McCall. McCall’s insights provide a roadmap for a smooth transition into retirement,emphasizing a holistic approach that extends beyond mere financial calculations.

Planning Your Financial Future

McCall advocates a four-pronged approach: spending, income, taxes, and lifestyle. “If you’re in that final countdown mode,” she advises, “I would start thinking about four things. First of all, what are we going to spend? How much are we going to have in terms of income? What are we going to do with taxes? And how are we going to spend our time?“

Budgeting for Retirement

A realistic budget is crucial. McCall suggests a two-part approach: a “bare-bones” budget for essentials and a “fun budget” for discretionary spending. “So, big fan of a budget, let’s start there,” she explains. “Think of how much you’re going to spend for a bare-bones budget and then get a fun budget on the side. I like to make sure that those numbers are all combined together so that you know really what you’re spending.“

assessing Income Sources

Projecting retirement income is essential. This involves calculating anticipated income from Social Security, pensions, and rental properties. McCall illustrates: “Let’s say you know that you’re going to spend $10,000 a month on average during retirement. Now, we’re going to figure out how much money we’re going to have incoming. So Social Security, maybe a pension, maybe some rental income. All of those are going to combine to figure out what your fixed income is.“

Bridging the Gap: Portfolio Needs

The difference between projected spending and income reveals the investment shortfall. McCall provides an example: “Let’s say that $10,000 is your spend. $6,000 is going to have the income level. You have a shortfall of $4,000. If we take $4,000 a month, multiply that by 12, we have a $48,000 shortfall. that means your portfolio has to come up with $48,000 every year to be a safe withdrawal rate—that’s 4%.basic math, you need $1.2 million to retire.“

She emphasizes self-assessment: “If you know that your shortfall is $4,000, is your account worth $1.2 million?“

Tax Planning: Strategic Withdrawals

Tax implications are critical. McCall stresses strategic withdrawals from different retirement accounts: “One big strategy that we work with financial advisers on is to figure out how you’re going to take different buckets of money out at different points in retirement. We have pre-tax money if we’ve been saving in a 401(k). We could have Roth money which is going to be the best bucket of money. If you want to do that bucket list trip that’s $50,000 or buy a new car or something really egregious in spending, you want to make sure that you have the right bucket of money to pull from that doesn’t blow up your tax bracket.“

Beyond Finances: A Fulfilling Retirement

McCall highlights the importance of a fulfilling retirement beyond financial security. “People hate retirement; they do not find fulfillment in retirement,” she notes. She recommends daily exercise, social engagement, and intergenerational connections. “I highly recommend to new clients who are getting ready to retire, figure out a charity you love to volunteer or something that brings joy to your spirit. Also, making sure that you have that social interaction.“

Proactive planning and a holistic approach are key to a successful and enjoyable retirement.

Planning for a Fulfilling Retirement: A Look Beyond Money

Retirement planning expert Dr. Emily Carter emphasizes a holistic approach, encompassing financial planning, health, lifestyle, and social engagement. “Successful pre-retirement planning is like building a puzzle with four central pieces,” she explains.

What Are the Core Elements of Successful Pre-Retirement Planning?

Dr. Carter details the importance of a realistic budget,understanding income sources,and strategizing tax-efficient withdrawals.She also stresses the importance of planning for healthcare needs, creating a lifestyle plan that incorporates hobbies and interests, and maintaining social engagement to avoid isolation.

How Do You Ensure You Have Enough Financial Resources for Retirement?

Dr. carter reiterates the importance of a detailed retirement budget, including both essential and discretionary spending. She explains the process of calculating projected retirement income and assessing any gaps between income and expenses.She uses the example of a $4,000 monthly shortfall requiring a $1.2 million portfolio to maintain a 4% withdrawal rate.

What Role Do Strategic Tax-Planning Strategies Play in Retirement?

Dr. Carter highlights the importance of understanding the different types of retirement accounts (pre-tax, Roth, and taxable) and developing a strategic withdrawal plan to minimize tax liability.she advises collaborating with financial advisors to create a personalized strategy.

how Critically Vital Is Planning for Well-being Beyond Finances in Retirement?

Dr. Carter emphasizes that a fulfilling retirement extends beyond financial security. She echoes dr. McCall’s advice on the importance of daily exercise, social connections, and intergenerational activities for maintaining physical and mental health. She encourages retirees to engage in activities that bring joy and contribute to overall well-being.

Final Thoughts: Envisioning a Successful and Enjoyable Retirement

Comprehensive planning is key to a successful retirement. By combining financial readiness with strategies for health and social well-being, retirees can achieve a balanced and joyful experience. the article concludes with an encouragement to focus on what brings fulfillment and to seek advice when needed, aiming for a “financial and emotional legacy that stands the test of time.”