5 Factors to Consider When Planning for Retirement

Have you ever felt like you're falling behind or wondered if you’re on the right track for a stress-free retirement?

You’re not alone. High-income professionals often face unique challenges – from delayed savings to managing complex income streams – that can make planning feel overwhelming. While the average retirement age in the U.S. is 63, many professionals continue working into their late 60s or beyond, often due to career demands, personal goals, or financial considerations [Source: Gallup 2023].

No matter your situation, one thing is clear: overlooking how one decision impacts another can disrupt your overall plan. That’s why retirement planning is about more than just a 401(k), IRA, or Social Security benefits.

Here are five key factors to consider when creating a retirement plan that aligns with your long-term goals. 

Watch the video below for a breakdown of these factors or keep reading.

How the 6 Money Decisions^® Impact Retirement

At the core of financial planning are six interconnected decisions – 6 Money Decisions® – we all make about money: Earn, Spend, Save/Invest, Borrow, Give, and Protect.

Each decision affects the others. For example, how you spend money influences how much you can save; how you borrow impacts your ability to protect your assets. When planning for retirement, your strategy will address all six areas, but four are particularly important to the key factors we’ll discuss below.

1. What Will Your Monthly Expenses Be? (Spend)

Once you retire, you’ll no longer receive income from a full-time job. Estimating your monthly expenses is essential for determining how much you need to save.

Keep in mind:

• Retirement might last 20–30 years, so your plan must cover many years of expenses.
• Lifestyle choices matter. Travel, hobbies, or dining out can raise costs.
• Downsizing doesn’t always cut expenses. A smaller home in a desirable area might cost as much as your current one.

2. What Will Be Your Sources of Income? (Earn)

Social Security is a common retirement income source, but it’s rarely the only one. Other possible sources include:

• Pensions (especially for those with large employers)
• Stock investments and dividends
• Ownership in a business
• Rental or real estate income
• Annuities
• Inheritance

Be conservative when projecting income to avoid overestimating what’s available.

3. What Is Your Income Longevity? (Earn & Save)

One of the biggest unknowns in retirement is how long you’ll live. Family history and health trends can offer clues, but no one knows for certain.

Living into your 80s or 90s increases the risk of outliving your savings. A concern known as longevity risk.

Ways to address this include:

• Build a diversified portfolio designed for growth and stability*.
• Consider annuities, which provide a steady cash flow for life.
• Running projections with a financial planner to model different scenarios.

4. What Are Your Total Assets? (Save)

Take stock of what you own today and what you’re continuing to add:

• 401(k) or IRA balances
• Brokerage and investment accounts
• Real estate or business ownership
• Cash reserves

While retirement accounts like 401(k)s are excellent savings tools, IRS contribution limits may require you to use additional vehicles to reach your goals.

A common misconception is that selling a business or professional practice will fully fund retirement. In reality, while proceeds can help, most people need more diversified savings to maintain their lifestyle.

5. Are You Prepared for the Unforeseeable? (Protect)

Unexpected events can disrupt even the most carefully made plans. One of the biggest risks is the cost of healthcare.

• The average lifetime expenditure for long-term care is about $142,777, and costs continue to rise.  [Source:  Genworth Cost of Care Survey 2023]
• Even staying at home with professional assistance can quickly deplete savings.

Strategies to prepare include:

• Long-term care insurance or hybrid life insurance policies with care benefits.
• Estate planning to protect assets.
• Maintaining appropriate health and disability coverage.

Frequently Asked Questions About Retirement Planning

Q: What is the average retirement age in the U.S.?

A: The average U.S. retirement age is around 63, although many professionals continue working into their late 60s for financial or personal reasons.

Q: What is the biggest risk in retirement planning?

A: Many underestimate healthcare costs and longevity risk. Long-term care and longer lifespans can quickly deplete savings without proper planning.

Q: How much should I save for retirement?

A: A typical range is 15–20% of your income, but your specific target depends on your lifestyle, income sources, and goals. Personalized planning generally works best.

Q: Can selling a business fully fund retirement?

A: Business sale proceeds can give a boost, but depending only on them is risky. It's usually best to have diversified savings and income sources.

Financial Planning for the Big Picture

Every financial decision you make, whether buying a home, selling a business, or increasing 401(k) contributions, connects back to your retirement readiness.

Whether you’re early in your career, midway through, or approaching retirement, the best time to plan is now. A financial planner can model different scenarios, help you understand trade-offs, and guide you toward a retirement strategy that reflects your goals and values.

Whether you’re years away from retirement or preparing to transition soon, our advisors at Spaugh Dameron Tenny can help you plan with confidence. Schedule a complimentary consultation today.

*There is no guarantee that a diversified portfolio will outperform a non-diversified portfolio or that diversification among asset classes will reduce risk.

This blog is educational and is not advice or a recommendation for any specific investment product, strategy, or service. Investing involves risks, and past performance is not indicative of future results.

This blog was originally published on July 13, 2020, but has been updated for freshness and accuracy.

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