Retirement Planning: What You Should Know Before You Retire

Retirement planning can feel complicated. There are retirement accounts, investments, healthcare costs, and the question almost everyone eventually asks: Have I saved enough to retire?

At Finger Lakes Wealth Management, we have these conversations with individuals and families throughout Ithaca and the Finger Lakes. Some people assume they're ready because they've been saving for years. Others are convinced they haven't saved enough. The reality can look different once we see the complete financial picture.

As summer winds down in the Finger Lakes, it's a natural time to look ahead and ask: Where do I actually stand?

How Much Money Do You Really Need to Retire?

People want a rule of thumb. How much should I have saved? How much money do I need to retire? The problem is that there isn't one number that works for everybody. A better place to start is with a much more personal question: What does it cost you to live?

If you don't know what you're spending now, it's difficult to figure out what you'll need in retirement. Housing, healthcare, travel, family responsibilities, debt and lifestyle can all affect your retirement expenses.

That's why retirement planning should start with your actual financial picture rather than a general rule about how much everyone "should" have saved.

Understanding Your Retirement Expenses and Cash Flow

Cash flow is one of the pieces people tend to overlook. Before talking about retirement projections or retirement income, it's important to understand what's coming in and what's going out.

What does your life actually cost? Which expenses might go away when you retire? Which could increase? Once we understand what you're spending, we have something real to plan around. Without that information, we're making assumptions.

For example, expenses like commuting, work lunches, professional clothing, or childcare might decrease or disappear in retirement. At the same time, other expenses—such as travel, hobbies, healthcare, home projects, or helping family members—could increase. Looking at these real-life categories helps paint a clearer picture of what your retirement lifestyle may actually cost.

Saving for Retirement Isn't the Same as Having a Retirement Plan

A lot of people are doing exactly what they've been told to do. They're contributing to an employer sponsored retirement plan and consistently putting money away. That's important, but the next question is: What's the plan?

Your retirement savings are only one part of your financial picture. You may have employer sponsored retirement plans, IRAs, investments held elsewhere, pensions or other income sources. Property, insurance, debt and other financial responsibilities matter too. Each of these pieces can affect how much you need to save, where your retirement income may come from, and how you might use your assets over time. For example, the right approach may look different for someone with a pension and a paid-off home than for someone who expects most of their retirement income to come from their investment accounts. Looking at the full picture helps ensure you're not making decisions about one account without considering how it fits into everything else.

Investment risk is part of the conversation as well. Someone beginning their career is in a different stage of life from someone approaching retirement. Your goals, timeline, financial situation and comfort with risk can change over time. A retirement plan helps bring those pieces together so decisions are based on your actual situation instead of assumptions.

How Often Should You Review Your Retirement Plan?

At least once a year is a good place to start. A job change, significant change in income, employee stock options, family changes or a shift in when you want to retire can all affect your financial plan.

An annual financial plan and portfolio review gives you an opportunity to ask: Does this plan still make sense for my life? Your life changes, and your retirement plan should be able to change with it. Major life changes may also warrant a conversation sooner rather than waiting for your next annual review. Moving, planning for a major trip, taking on elder care responsibilities, receiving an inheritance, helping a family member financially, or making a significant purchase can all affect your cash flow, goals or retirement timeline. Checking in when these changes happen can help you understand how they may impact your plan and whether any adjustments are needed.

Am I Financially Ready to Retire?

Underneath all the questions about retirement savings, investments and retirement age, there's usually one thing people really want to know: Can I afford to live through retirement without running out of money?

Clients can feel an enormous sense of relief once they finally see their financial plan and understand where they stand. Some have spent years believing they wouldn't have enough, only to find they're in a better position than they thought. Other times, the plan shows us something needs to change. That's valuable information too. Once we know, we can talk about what comes next.

Looking at Your Whole Financial Picture

This is why our approach at Finger Lakes Wealth Management is holistic. Retirement planning shouldn't only look at the investment accounts your financial advisor manages. A financial plan can include employer sponsored retirement plans, accounts held elsewhere, insurance, property, income sources, mortgages and other liabilities.

We also need to understand what you're trying to accomplish. Maybe your ideal retirement includes traveling. Maybe you want to stay in your home here in the Finger Lakes, spend more time with family, help your children or grandchildren, or continue working in some capacity. These goals help provide context for the financial decisions you're making and the resources you'll need to support them.

There isn't one version of a successful retirement. Your retirement plan should reflect yours.

If you're looking for a financial advisor in Ithaca, NY or have questions about retirement planning in the Finger Lakes, contact Finger Lakes Wealth Management to start a conversation about your retirement and financial planning goals.

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