Retirement planning can feel like a daunting task— even when the stock market is steady. But with inflation running rampant, major companies across the country laying off thousands of workers every month, and the Federal Reserve raising interest rates every time you turn around…. It can feel impossible to just save for retirement— much less know exactly how much retirement money you’ll need! 

If your retirement years are fast approaching, you may have a better idea of how much is “enough” money to live on during your Golden Years. But if you’re a decade or more away, your retirement planning can be even more complex. That’s why at Cook Wealth, we take a four-lever approach to retirement finance planning that adjusts as your life changes— continually maximizing every opportunity. 

The best retirement savings plans are built using these four levers

Every retirement plan requires a careful balance of saving, investing, and strategizing. And at Cook Wealth, our four-part retirement planning process helps you stay on track as you approach retirement age— no matter what the market throws at you or how complex your situation may be. 

Whether you’re a few years or a few decades from a change of pace, these levers can work together to create a personalized retirement plan that balances your needs, wants, and wishes:

1. Your planned spending

When we build retirement plans with our clients, one of the first things we talk about is what they expect to spend. We add up common costs like healthcare, home maintenance, and basic living expenses, plus things like charitable giving and planned gifts. 

The more you expect to spend in retirement, the greater your retirement savings must be. So by adjusting your planned living expenses and looking for ways to stretch your retirement income (like downsizing to a condo, moving to a lower-cost city, or trading your sports car for a Camry), we can shorten your time to retirement while ensuring your have enough money to support the lifestyle you want. 

2. How long you work

You know the saying, “Age is just a number”? We say retirement age is just a number! While the retirement age— as far as social security is concerned— is 66 (if you were born between 1943 and 1954), the age you choose to retire at is up to you. 

As you’re nearing retirement, if you choose to continue working for an extra year or two, you can significantly increase your retirement savings account and reduce how much you’ll need to save to enjoy the retired life you want.

Remember, full retirement or a full-time career aren’t your only two options. Many of our clients enjoy consulting, coaching, or running a small business in their early retirement years. Choosing to pursue a side job you enjoy, that also puts a little extra cash in your pocket, can be one of the best financial strategies to ease into a fully retired lifestyle while significantly stretching your savings.

3. Your current savings rate

As you’re approaching your ideal retirement age, you can choose to save more or less of your ordinary income and investment returns. And with a variety of different savings options available, like an individual retirement account (IRA) or a 401(k) account, you can reduce your taxable income and increase your retirement savings all at once. 

Depending on where you save money, you can also benefit from a lower income tax bill, compounding interest, tax-free withdrawals, or a steady rate of return. How much tax-deductible savings you can set aside, and how many pre-tax dollars you can save, depends on your pre-retirement income. That’s why, if you’re in a higher tax bracket, it’s especially important to strategically maximize this lever by building a tax-smart savings plan. 

As you can guess, this is the strongest lever you can pull to strengthen your retirement plan, reduce the number of years you need to work, and safeguard your financial future.

4. Your investment approach

When it comes to investing for retirement, we strongly suggest that every investor partners with an experienced financial advisor— like the joint team of tax planners and wealth management advisors here at Cook Wealth. That’s because certain investments have better tax advantages than others— now, and when you retire.

Plus, an overly-risky or too conservative investment today can put your long-term financial security at risk, forcing you to withdraw money at a loss in the future. 

At Cook Wealth, we create personalized investment plans that maximize your retirement income and minimize your taxable income both now, and when you need the funds. A strategic and tax-optimized retirement plan, social security benefits consulting, and pension income planning are all included in our comprehensive financial planning services

These four levers help you save for retirement while enjoying the rewards of your hard work along the way

You may not have control over what the stock market does or what income tax rate you’ll face once you start withdrawing from your retirement accounts, but with a plan that constantly readjusts to market conditions, gently pulls on each of these levers, and balances saving with investing, you can feel confident and secure in retirement.

Ready to find a retirement planning partner you can trust?

The sooner you develop a retirement savings plan— or optimize your current retirement plan— the more benefits you can maximize along the way. To learn more about Cook Wealth’s client-first approach to retirement planning, book an intro call with our team, or take our short quiz— Do I Need a Wealth Advisor?