Author: Hazel Secco, CFP®, CDFA®
Estimated reading time: 11 minutes
🎧 Prefer to watch or listen? This episode of Align Your Retirement covers exactly this:
Table of contents
- How Much Money Do You Need to Retire?
- 7 Signs You May Have Enough Money to Retire
- 7 Reasons You May Not Be Ready to Retire Yet
- How Do You Calculate If You Have Enough Money to Retire?
- Why Retirement Calculators Give You a False Sense of Confidence
- Retirement Planning for Women Who Carry the Financial Decisions
- When Should You Get Professional Help?
- What to Do This Week
- Are you on track?
- Frequently Asked Questions
- Sources
The question usually shows up at an unexpected moment. Driving home from a quarterly review, doing the math on the next five years in your head. Opening a 401(k) statement after a rough week in the market. Watching a friend retire and wondering: am I close? Am I behind? Do I actually have enough money to retire?
That question does not come from poor planning. It comes from carrying too many moving parts at once: Social Security, investments, taxes, healthcare, old retirement accounts, family considerations, market noise, all talking at the same time. I call that noisy feeling Retirement Static. The money may be there. The signal still feels unclear.
Retirement readiness is a calculation you can actually run, and the five years before retirement (what I call your retirement runway) are when the decisions that cannot be redone get made. This post walks through the numbers that matter, the signs you are ready, the signs you are not, and the math that turns a guess into an answer.
How Much Money Do You Need to Retire?
Your retirement number starts with the life you want to fund each year, not with a target portfolio balance. The useful question is how much income your assets can reliably produce, for how long, with how much certainty.
A $2 million portfolio can feel substantial until you compare it against taxes, healthcare, travel, family support, charitable giving, and 30 years of withdrawals. So start with the annual budget, in two piles:
| The Must-Pay Pile | The Life Pile |
|---|---|
| Housing | Travel |
| Food | Hobbies |
| Healthcare and insurance | Charitable giving |
| Taxes | Family help and home projects |
| Basic transportation | The freedom to say yes without guilt |
Then look at the after-tax amount, what actually lands in your checking account once federal and state taxes are paid. The 4% rule (a common planning shortcut that points to roughly 25 times annual spending) can give you a first draft. It is not a final answer. Your actual plan needs your taxes, your age, your inflation assumptions, and your life expectancy, not someone else’s averages.
7 Signs You May Have Enough Money to Retire
- You know your annual spending number. Not your pre-retirement income as a shortcut. Your actual annual expenses, monthly needs, and the bigger irregular costs.
- Your income sources can carry real life. Social Security, pensions, cash, rental income, and investments cover more than bills. They support your actual schedule, family commitments, travel, volunteering, consulting, or a phased retirement.
- You know which account gets tapped first. A tax-aware withdrawal plan decides when to use brokerage accounts, traditional IRAs, Roth IRAs, or employer plans. The order matters as much as the amount. My guide to which accounts to tap first covers the sequencing.
- Your portfolio matches retirement, not your old work life. Asset allocation (how your money is split among stocks, bonds, cash, and fixed income) should fit withdrawals, not just growth.
- Healthcare has a line item. Medicare still has premiums, deductibles, and income-based surcharges. CMS set the standard Part B premium for 2026 at $202.90 per month before any IRMAA additions, and the picture gets more complex if you plan to retire before 65.
- The plan has been roughed up a little. It still works after lower returns, higher taxes, an ugly market year, or a longer life than you planned for.
- You know what comes after work. Purpose matters. A calendar with nothing on it can feel peaceful for two weeks, then strangely loud.
7 Reasons You May Not Be Ready to Retire Yet
- Your accounts are scattered. Old 401(k)s, IRAs, brokerage accounts, cash, employer plans, and forgotten beneficiaries create what I call Account Clutter.
- You are guessing at spending. A round number like “about $10,000 a month” can hide taxes, repairs, gifts, and travel. Your future dollars depend on today’s real numbers.
- You have not modeled taxes. Roth conversions, capital gains, RMDs, Social Security taxation, and Medicare surcharges all shape retirement income. Required minimum distributions generally begin at age 73 under current law.
- Your portfolio is still built for accumulation. Growing money while working is one job. Producing income through rough markets is a different one.
- You are carrying too much debt. A mortgage, HELOC, business debt, student loans, or credit obligations raise the income your investments must produce.
- You are relying on one asset too heavily. Concentrated stock, company equity, real estate, business value, or one large retirement account creates Single Asset Risk.
- You feel unsure every time the market moves. If market drops make you question retirement, the plan may need better cash reserves, withdrawal sequencing, or risk controls.
How Do You Calculate If You Have Enough Money to Retire?
Six steps: estimate your spending, add up reliable income, find the gap your portfolio must fill, check the tax character of your accounts, stress-test the plan, and decide whether work is optional. Here is each one.
- Estimate your retirement spending. Build the budget from housing, healthcare, taxes, food, travel, giving, family support, and personal lifestyle goals.
- Add up your reliable income sources. Social Security, pensions, rental income, annuities, consulting income, and any expected benefit payments.
- Identify the gap your investments need to fill. Spending minus reliable income is the job your portfolio has to do every year.
- Review your account types. Taxable accounts, traditional IRAs, Roth IRAs, employer plans, and cash each carry different tax treatment, which changes how far each dollar goes.
- Stress-test the plan. Lower returns, higher inflation, healthcare surprises, and a longer life than the average table assumes.
- Decide whether work is optional. Retirement readiness means you can keep working by choice, not because the plan collapses without another year of pay.
Here is the shape of that math, as a hypothetical composite:
| The readiness math (hypothetical composite) | Amount |
|---|---|
| Desired after-tax spending | $140,000 per year |
| Social Security plus pension | $60,000 per year |
| Gap the portfolio must fill | $80,000 per year |
| Assets implied at a 4% initial withdrawal rate | About $2,000,000 |
An $80,000 gap at a 4% initial withdrawal rate implies roughly $2 million of investable assets, before accounting for taxes on the withdrawals themselves. That last caveat is exactly why step four matters: $2 million in a traditional IRA and $2 million spread across Roth and taxable accounts are not the same number.
That calculation gives you a better answer than any single target retirement savings number.
Why Retirement Calculators Give You a False Sense of Confidence
A retirement calculator can give a helpful estimate, but most calculators use simplified assumptions. They ask for current savings, monthly contributions, an inflation rate, and a target, then project a single future number.
The outputs rarely reflect actual investment results, changing taxes, Roth conversions, Social Security claiming age, or personal life transitions. No calculator can tell you how one particular investment will behave either.
That is the part Align Financial Solutions helps with. We turn the estimate into a working plan, so you know what to adjust, what to leave alone, and what to do next without second-guessing every step. If you want to talk it through, schedule a 15-minute Align Call.
Retirement Planning for Women Who Carry the Financial Decisions
When you are the one everyone counts on, retirement is not just a math question. It is the house. The tax return. The aging parent. The adult child who may still need help. And the quiet fear of getting one big choice wrong with nobody to blame but yourself.
That weight gets heavier after divorce, widowhood, caregiving, a job change, or an inheritance, and it compounds in the final years before retirement. The standard retirement framework was built for a 35-year-old, a couple, a generic earner. It does not account for any of it. I wrote a complete guide to retirement planning for women over 50 for exactly this reason.
You need a retirement plan that matches the life you are actually responsible for. Align Financial Solutions works specifically with women in this exact stretch: fiduciaries to you, accountable to you, with no third-party incentives shaping the recommendations.
When Should You Get Professional Help?
It may be time for outside help if any of these are true:
- You have $1M+ across several accounts and you are within 10 to 15 years of retirement.
- You feel unsure how taxes will affect retirement income.
- Roth conversions, RMDs, Social Security timing, withdrawal sequencing, and investment changes all feel connected, and overwhelming.
- You are also in the middle of a major life transition: divorce, widowhood, a job change, or a meaningful inheritance.
Social Security timing alone can justify the conversation. Full retirement age is 67 for anyone born in 1960 or later, and the claiming age you pick changes the check for life:
| Claiming age (full retirement age 67) | Effect on your monthly benefit |
|---|---|
| 62 | Reduced by 30% |
| 67 | Full benefit |
| 70 | Increased by 24% (8% per year of delay) |
The decision is one-shot. Once you start, you live with it. The gap between the right and the wrong claiming age changes retirement income meaningfully, for life, and it interacts with every other number in this post.
What to Do This Week
- Pull 12 months of actual spending. Bank and card statements, not memory. Sort it into the Must-Pay Pile and the Life Pile, and note the after-tax annual total.
- List every income source with a start date. Your Social Security estimates at 62, 67, and 70 from your my Social Security account, pension options, rental income, consulting.
- Compute the gap and multiply by 25. Spending minus reliable income, times 25, is your first-draft asset number. It tells you whether you are in range, short, or already there.
- Inventory every account and its tax type. Taxable, traditional, Roth, cash. Scattered old 401(k)s and stale beneficiary designations count double.
- If you are 63 or older, project this year’s MAGI before December. Your income this year sets your Medicare premium two years out. Check it against the 2026 IRMAA thresholds before making any large moves.
Are you on track?
If you want to see where you actually stand, I built a free 3-minute Retirement Readiness Assessment that gives you a personalized score and a specific dollar gap estimate based on your numbers. Take the assessment here.
Hazel Secco, CFP®, CDFA®, is the founder of Align Financial Solutions, a fee-only fiduciary firm that works with high-earning women and female executives on retirement planning, equity compensation, and tax strategy.
Already past the research phase? Book a free 15-minute Align Call: https://alignfinancialsolutions.com/book-a-call/. Whether we work together or not, you’ll walk away with clarity on your best next step.
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Frequently Asked Questions
How do I know if I have enough money to retire?
The honest answer is not a single number. You have enough when your reliable income sources (Social Security, pensions, investment withdrawals, rental income) can cover your actual spending, including healthcare and taxes, with margin for inflation, longevity, and a bad market year, without forcing you to keep working. Anything else is a target, not a readiness check.
What is a good monthly retirement income?
The Bureau of Labor Statistics reports that households headed by someone age 65 to 74 spent an average of $65,354 in 2024, about $5,400 a month across housing, healthcare, food, taxes, and everything else. That is the national average across all income levels. For most high-earning women planning to keep their working-years lifestyle, the realistic number is meaningfully higher, often well into five figures monthly. The right question is what you spend now and how much income your assets need to produce to support it.
What is the biggest mistake most people make about retirement?
Retiring with savings but no income plan. They know what they have; they do not know which account to pull from first, when to claim Social Security, or how each withdrawal will be taxed. Savings is the easy part. Income design is the part that determines whether your money lasts.
Does the “10x your income by 67” rule actually work?
It is a rough benchmark, not a plan. The Fidelity guideline (10 times your salary saved by age 67) can be useful for early-career savers who need a north star. By the time you are inside your retirement runway, that benchmark gets replaced by your actual spending number and your actual income sources. A high-earning woman in her 50s often discovers her real number is meaningfully different, in either direction, from what a generic multiplier suggests.
How long will my money last in retirement?
With a 4% initial withdrawal rate, retirement savings are commonly planned to last about 30 years. That guideline is based on historical market returns and assumes a balanced portfolio. The actual longevity of your assets depends on returns, inflation, taxes, healthcare costs, and how flexibly you can adjust spending during rough markets. Women should typically plan for a longer time horizon than men, given longevity differences.
Is it better to retire early or late?
Later usually gives the math more room: more savings, fewer withdrawal years, and a higher Social Security benefit if you delay. But “better” depends on what you are optimizing for. If health, purpose, or a specific life chapter matters more than additional working income, an earlier retirement with the right plan can be the right choice. The math answers feasibility. The life question answers desirability.
I am 5 years from retirement. What is the most important thing to do now?
Stop optimizing for accumulation and start designing for income. The years immediately before retirement, your retirement runway, are when the one-shot decisions get made: Social Security timing, Roth conversion strategy, the healthcare bridge to Medicare. Treat this window as its own planning phase, not a continuation of your earning years.
Disclaimer: Advisory services are offered through Align Financial Solutions LLC (“AFS”), an Investment Advisor in the State of New Jersey. This article is for educational purposes only and does not constitute personalized tax, legal, investment, or financial planning advice. Rules and figures are current for 2026 and subject to change. All client scenarios are hypothetical composites for illustration and do not represent any specific client outcome. Consult a qualified professional about your specific situation.
Sources
- 2026 Medicare Parts A & B Premiums and Deductibles (CMS): https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
- Consumer Expenditures 2024 (Bureau of Labor Statistics): https://www.bls.gov/news.release/cesan.nr0.htm
- Retirement Plan and IRA Required Minimum Distributions FAQs (IRS): https://www.irs.gov/retirement-plans/retirement-plan-and-ira-required-minimum-distributions-faqs
- Delayed Retirement Credits (SSA): https://www.ssa.gov/benefits/retirement/planner/delayret.html
- Starting Your Retirement Benefits Early (SSA): https://www.ssa.gov/benefits/retirement/planner/agereduction.html
- How much do I need to retire? (Fidelity): https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire