How do I know if I have enough to retire?

Multiply your expected annual retirement spending by 25 (the 4% rule). If you need $60,000/year, you need $1.5 million saved. Then subtract guaranteed income sources (Social Security, pension). If Social Security provides $24,000/year, you need $60,000 - $24,000 = $36,000 from savings, which requires $900,000. This is a starting point — adjust for healthcare costs, inflation, and your risk tolerance.

What is the biggest financial risk in retirement?

Healthcare costs before Medicare (age 65) and longevity risk (outliving your money). Healthcare for a couple from age 60-65 can cost $50,000-$100,000+. And a 65-year-old couple will need an estimated $315,000 for healthcare costs throughout retirement (Fidelity, 2025 estimate). Plan for a 30-year retirement even if you don't expect to live that long.

When should I start planning for retirement?

Start detailed retirement planning at least 5 years before your target date. But begin saving as early as possible — the power of compound growth means starting at 25 requires saving roughly half as much per month as starting at 35 for the same retirement balance. The 5-year window is for logistics: Social Security timing, healthcare bridging, tax strategies, and draw-down planning.

What is the most important thing to do before retiring?

The single most impactful thing you can do before retiring is determine your exact retirement budget and test it by living on it for 3 to 6 months before you leave work. Most retirees underestimate healthcare costs and overestimate how much their spending drops. Confirming your real numbers while you can still adjust — by working longer, saving more, or cutting expenses — is more valuable than any investment decision.

Things to Do Before Retiring: Complete Financial Checklist

Before you retire, verify that your savings, Social Security, and other income sources can cover your expenses for 25-30+ years — including the healthcare costs that surprise most retirees. Retiring without a plan is the most expensive mistake you can make.

Master Retirement Readiness Checklist

#	Task	Priority
1	Calculate retirement income from all sources	🔴 Critical
2	Estimate realistic annual expenses	🔴 Critical
3	Plan healthcare coverage (especially before 65)	🔴 Critical
4	Decide Social Security claiming age	🔴 Critical
5	Create a tax-efficient withdrawal strategy	🔴 Critical
6	Pay off high-interest debt	🟡 Important
7	Update estate documents (will, POA, beneficiaries)	🟡 Important
8	Test your retirement budget for 6 months while still working	🟡 Important
9	Downsize or reduce fixed costs	🟡 Important
10	Build a 1-2 year cash buffer	🟡 Important
11	Plan for purpose and social connection	🟢 Important for well-being
12	Consider part-time or consulting income	🟢 Optional buffer

Retirement Income Sources

Source	Typical Amount	When Available
Social Security	$20,000-$50,000/year (varies by history)	Age 62 (reduced), 67 (full), 70 (maximum)
401(k) / IRA withdrawals	Based on savings; 4% rule	Age 59½ (penalty-free)
Pension (if applicable)	Varies	Per employer plan
Part-time work / consulting	$10,000-$40,000/year	Anytime
Rental income	Varies	Anytime
HSA (for healthcare expenses)	Based on balance	Anytime for medical; age 65 for any purpose

The Retirement Math

Expense Category	Pre-Retirement	Estimated in Retirement
Housing (mortgage or rent)	$1,800	$1,200 (paid off or downsized)
Healthcare	$250 (employer plan)	$600-$1,200 (before Medicare)
Food	$600	$500
Transportation	$500	$300
Insurance	$200	$150
Utilities	$250	$250
Entertainment / travel	$300	$500
Taxes	Varies	Lower (but not zero)
Monthly total	$3,900	$3,500-$4,100
Annual total	$46,800	$42,000-$49,200

Healthcare Before Medicare (The Gap)

Age	Coverage Option	Annual Cost (Individual)
60-64	ACA marketplace (with subsidies)	$3,000-$12,000
60-64	COBRA (from employer, up to 18 months)	$6,000-$15,000
60-64	Spouse’s employer plan	Varies
65+	Medicare Parts A + B + supplement	$2,400-$6,000
65+	Medicare Advantage (Part C)	$0-$3,600

The pre-65 healthcare gap is the #1 financial surprise for early retirees.

Tax-Efficient Withdrawal Order

Order	Source	Tax Treatment
1	Taxable brokerage accounts	Capital gains rates (lowest)
2	Tax-deferred (Traditional 401k, IRA)	Ordinary income
3	Tax-free (Roth IRA, Roth 401k)	No tax — let it grow longest
4	HSA for medical expenses	Tax-free

This is a general guideline. Your specific situation may benefit from Roth conversions in early retirement years when income is low.

Test-Drive Your Retirement Budget

Step	Action
1	Live on your projected retirement budget for 6 months while still working
2	Include healthcare at full cost (not employer-subsidized)
3	Track actual spending carefully
4	Adjust your plan based on reality
5	If it’s tight, consider working 1-2 more years or reducing expenses

The Bottom Line

Retirement planning isn’t about a single number — it’s about matching your income sources to your expenses for 25-30+ years, with a plan for healthcare, taxes, inflation, and unexpected costs. The best thing you can do is test-drive your retirement budget while still working and adjust before you’re locked in.

For more on retirement planning at every age, see the Retirement Planning hub.

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.

The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy