Retire Well

How ‘Retirement Ready’ Are Your Clients?

It’s never a perfectly clear picture… And good planning plays a critical role

Lincoln Financial presents a game-plan for clients to follow as they begin to move into retirement. Learn more here.

You’ve worked hard to build a bright future for yourself and your loved ones. Now, it’s finally almost time to begin your next chapter — retirement. As you think about when to retire, it’s important to make sure you have an income strategy that fits your vision for the future. First, consider the factors that impact your retirement savings by reviewing the facts:

  • 79 – The average American lifespan is 79 years.[1]
  • $285,000 – A retiring couple may need $285,000 for healthcare expenses in retirement.[2]
  • 3% – The historical average annual inflation rate is 3%.[3]

Calculate How Much Retirement Income You’ll Need

Rethink your budget with retirement in mind. Retirement readiness starts with a clear vision of your ideal lifestyle. According to most financial professionals, you’ll probably need about 85% of your pre-retirement income to maintain your lifestyle after leaving your job.

These tips can help you get started assessing your income needs:

  • Track your spending for 90 days to get a realistic view of your spending. Use this budget worksheet to get started.
  • Based on your plans for retirement, will your expenses change? Perhaps you plan to spend more money on travel or hobbies.
  • Budget for healthcare expenses. Even with Medicare, the average couple may need substantially more to pay for healthcare in retirement.
  • Consider how long you may spend in retirement. This Life Expectancy Calculator may be helpful.

Determine Your Income Sources

Next, consider potential income sources so you can develop a strategy for generating income. Your annual retirement income may come from several different sources, including:

  • Social Security
  • Employer-sponsored retirement plans
  • Healthcare resources
  • Additional income sources

Make Your Savings Last Through Retirement

It’s important to review your portfolio’s asset allocation on a yearly basis. A portfolio based on a sound investment strategy can help create retirement income and safeguard your savings against inflation.

  • Portfolios designed for retirement income should focus on these key areas.

The longer you leave your assets in tax-advantaged accounts, the longer they have to grow. Learn the rules that govern withdrawals for each of your account types before you start taking distributions — you’ll want to be as tax-efficient as possible.

  • Consider this three-tiered approach for making withdrawals.

Decide On Your Retirement Timeline

Timing is an important piece of your retirement strategy. Many people make the mistake of deciding to retire with no financial plan in place. If you still have concerns over whether you’re on track to reach your savings goals and achieve the retirement you envision, you may want to reflect on your retirement expectations and consider whether an alternate approach is best for you, such as:

  • Adjusting your target retirement date.
  • Transitioning to part-time at your current job.
  • Part-time work in another field.

A Pre-Retirement Checklist – Begin The Countdown

  • 3 Months Before Your Reach Age 62

Visit the Social Security website ( or your local Social Security office to determine your benefit amount.

  • 3 Months Before You Reach Age 65

Apply for Medicare.

  • 18 Months Before Retirement

Meet with a financial professional to review your investments alongside your current risk tolerance. This also may be a good time to find opportunities to pay off debt.

  • 12 Months Before Retirement

Meet with a human resources professional to discuss your company’s retirement policy and benefits, such as life insurance, long-term care insurance, and health insurance.

  • 3 Months Before Retirement

Meet with a financial professional to review withdrawal requirements, taxes, and strategies.

Finalize Your Transition Plan

Being proactive as you approach retirement may help ensure that your wishes are respected. Make sure you’ve taken care of these five important details before the big day.

1. Update your executor. Make sure people know where to find your will.

2. Look into trusts. A financial professional can help you determine the best way to leave assets to minors.

3. Check your beneficiary information. Updating your beneficiaries can help make sure retirement savings, insurance benefits, and financial accounts pass directly to heirs without going through probate court.

4. Get a durable power of attorney. This gives someone permission to handle your estate, access your accounts, and make decisions if you’re temporarily incapacitated.

5. Make sure your healthcare directives are updated. It’s important to clarify your wishes for medical treatment.