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Most people think retirement planning is about reaching a magic savings number. Save enough, invest wisely, and everything else will fall into place.
But after years of working with individuals and families approaching retirement, I’ve learned that this narrow focus on saving often leaves people feeling unprepared, even when they’ve done everything “right” financially.
I’ve found three main reasons for this retirement planning uneasiness.
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First, it is hard to ever have enough. There is no magic savings number, as there can always be more. I’ve seen this from people with $50,000 saved and even a billionaire with whom I’ve worked.
Second, if our focus is on saving, spending becomes painful, and we end up unable to enjoy our spending in retirement.
Third, retirement isn’t a single event or an end point. It’s a continuum of transitions that unfolds over time, touching far more than your portfolio.
I think about it as a journey through eight distinct stages, each with its own purpose. When these stages are addressed thoughtfully and in order, you can become more confident, flexible and fulfilled in retirement. When one is skipped, the consequences often show up years later.
Stage No. 1: Understanding your relationship with money
Every financial plan rests on something deeper than math: your relationship with money. The beliefs you formed early in life about security, risk, spending and success still influence your decisions today, often without you’re realizing it.
These can be beliefs passed down from two or three generations prior. How your great-grandparents approached money could still be affecting you today.
If you don’t understand your patterns, you might overreact to market volatility, underspend out of fear or struggle to shift from saving to spending. Retirement magnifies these tendencies because the paycheck is gone, even if the assets are not.
Before focusing on strategy, it’s worth taking an honest look at how money makes you feel and how those emotions shape your choices. One good exercise is to write down how you feel about money, try to describe your relationship, and explore your first money memory and how that might affect you today.
Stage No. 2: Saving for retirement
Setting strong behaviors for saving is the foundation of everything that follows. While this stage might feel familiar, it’s easy to underestimate how much flexibility consistent saving creates later on in life.
Early in our careers, the focus should be less about the amount of money saved and more on the behavior of saving and investing. Automate and keep increasing your savings. Find ways to save an extra $20 or $100 a month. Time is on your side when you’re younger; it’s about building positive momentum.
Saving isn’t just about accumulating dollars; it’s about creating future options through the ability to retire earlier, adjust spending, weather market downturns or help family members without derailing your own financial security.
Money doesn’t guarantee happiness, but it provides flexibility to adjust to dynamic changes in life and removes hurdles to accomplish our life passions.
As income increases, the challenge often shifts from “Can I save?” to, “Am I saving enough?” Revisiting savings rates, maximizing tax-advantaged accounts and aligning saving with long-term goals remain critical well into your peak earning years.
Stage No. 3: Investing for retirement
Saving creates fuel, while investing is the engine. I often see people focus just on the savings portion, not on putting their savings to work. This stage isn’t about chasing returns but building a portfolio that reflects both your time horizon and your temperament.
One common mistake is becoming too conservative too early. With people living longer than ever, retirement can easily last 25 or 30 years. A portfolio designed only for stability might struggle to keep pace with inflation and rising health care costs.
Investing more aggressively in the market will also come with potentially more volatility of up and down cycles. But I like to say that volatility is the price we pay for gains.
The goal here is to balance: Growth to support longevity, diversification to manage risk and the creation of a structure that allows you to stay invested when markets inevitably test your resolve.
But remember, invest for the long-term, weather volatility by staying on course and don’t overreact to short-term market trends or cycles.
Stage No. 4: Getting ready to retire
This is the stage I see people underestimate most, especially high achievers and those who love to work. It doesn’t feel like traditional financial planning.
Use the “retirement sketchbook approach” to get ready. Draw out what your retirement looks like, list your values, and create a visual calendar of how you’ll spend your time. This will help you get better aligned with a vision of your retirement.
Getting ready to retire is as much about identity and lifestyle as it is about money. You’re not just leaving a job; you’re leaving a structure that shaped your days, relationships and sense of purpose.
People often know what they want to retire from (stress, long hours, commutes) but haven’t defined what they’re retiring to (how they want to spend their time, maintain social connections and foster a sense of structure work once provided).
Without that clarity, retirement can feel disorienting, and spending decisions can become emotional or inconsistent. We need to find out where we’ll get meaning from in retirement.
Getting ready to retire is where expectations are set. When it’s rushed or ignored, the financial plan might still work on paper, but the retirement experience often falls short. We also have to make sure our retirement income is going to be aligned with our desired lifestyle.
Stage No. 5: Preparing your retirement income plan
This is where decades of saving and investing turn into something tangible: income. This stage is about designing a system that converts assets into reliable cash flow while accounting for uncertainty. This is when we need to turn our savings into our retirement paycheck.
Social Security decisions, pension choices, portfolio withdrawals and potential guaranteed income sources all need to work together.
Just as important, the plan must remain flexible enough to adjust as markets, health and priorities change. A top priority is balancing guaranteed income sources and flexibility.
While it can feel appealing to go all in on guaranteed income in retirement, it can also reduce our flexibility. We need balance, to look at our goals and income sources, and to create a plan with which we’re happy.
Retirement income planning isn’t about finding a perfect formula. It’s about creating a structure you understand and trust and helps you spend with confidence without constantly second-guessing.
Stage No. 6: Managing retirement income
Once retirement begins, the focus shifts from planning to execution. How much you withdraw, from which accounts and when matters more than many people expect.
Taxes often play a larger role than anticipated. Withdrawals can affect not only income taxes but also Social Security taxation and Medicare premiums.
Poor coordination can quietly erode retirement income over time. Things such as required minimum distributions from our 401(k) or IRA can cause income levels to spike, triggering higher tax brackets.
Consider tax bracket management strategies such as Roth conversions or tapping health savings accounts (HSAs) for health care costs.
This stage requires discipline and ongoing attention, but it also rewards adaptability. Adjusting withdrawals, revisiting assumptions, and responding thoughtfully to market conditions can significantly improve long-term outcomes.
Stage No. 7: Living in retirement
Eventually, retirement becomes less about managing money and more about living well. Health, relationships and purpose take center stage, and health is wealth in retirement. Even the richest people would trade their wealth to feel healthy and vibrant. Make sure you’re take care of your body and mind, go to the doctor and stay active.
Financial security creates the freedom to focus on these areas, but it doesn’t guarantee fulfillment. The happiest retirees tend to be those who intentionally invest in social connections, maintain routines and stay engaged with things that matter.
Housing decisions, community involvement and daily structure all play a role here. Live in an area that gives you a feeling of joy and connection. Find the activities and communities that fill up your cup and stay involved. Retirement works best when it’s intentionally designed, not left to chance.
Stage No. 8: When finality becomes reality
Many people prefer to avoid thinking about the final stage. But planning for incapacity and death is not pessimistic; it’s practical and deeply considerate.
We tend to be a death=denying society in the United States. We don’t want to talk about the end, but it’s coming whether we like it or not. We need to not just plan for a good retirement but a good end of life, too. A recent study from Bryn Mawr Trust found that less than 10% of Americans have an up-to-date estate plan in place.
Clear estate documents, updated beneficiaries, health care directives and plans for digital assets reduce confusion and stress for loved ones. They also ensure your wishes are respected when you can no longer advocate for yourself.
Handled thoughtfully, this stage becomes less about loss and more about legacy. We should want to leave our loved ones in the best place possible, not scrambling to understand and manage our estate.
The bottom line
Retirement planning isn’t about checking boxes or hitting a single target number. It’s about moving through each stage with intention and understanding that financial decisions are inseparable from life decisions.
If there’s one stage that tends to be underestimated, particularly by successful, high-achieving households, it’s the transition itself. Getting ready to retire doesn’t always feel like financial planning, but it might be the most consequential work you do.
Retirement is a change-management process, not just a math problem. It requires more than knowing your number; it requires knowing yourself.
When this stage is handled thoughtfully, everything that follows (income planning, spending confidence and lifestyle design) becomes clearer and easier to manage.
When it’s rushed or ignored, the consequences often surface later, in ways no spreadsheet can fully anticipate. Approaching retirement as a journey rather than a finish line gives you the best chance not just to retire successfully, but to live well once you do.
I’ve written about this process to retirement alongside Bonnie Treichel in my newest book (coming March 31), Your Retirement Sketchbook: 125 Retirement Planning Lessons from Financial Experts