“When can I retire?”
It’s one of the most important financial questions you’ll ever ask, and the answer isn’t as simple as reaching a certain age or saving a specific amount—it’s about having the right plan.
Many people rely on generic guidelines like the 4% rule or simplified online calculators to inform their retirement goals. This can be a good place to start, but these one-size-fits-all approaches to building comprehensive retirement savings plans rarely consider taxes, risks around sequencing of market returns or longevity, healthcare needs, and–perhaps most importantly–your real-life, personal to you goals.
At Hendershott Wealth Management, we build financial plans that reflect real life—with customized, tax-smart retirement strategies based on our clients’ unique circumstances.
In this article, we’ll explain why traditional planning shortcuts can fall short as you’re considering when you can retire, what’s most important to know to make smart decisions around when to retire, and how working with a fiduciary advisor can give you clarity and confidence in your retirement plan.
Here are your quick links for what’s inside this article:
Before you dive in…
Wondering how your current retirement savings stack up against what you need for the big day?
Start your discovery with our Retirement Calculator to estimate
your monthly income in retirement based on your current savings rate.
Why Knowing When You Can Retire Isn’t As Simple As You Might Think
Many people assume retirement is just about hitting a magic savings number. But true readiness depends on much more, including levers you can control, and ones you can’t:
- Taxes. Over the course of your lifetime, taxes are inevitable–and tax laws are (unfortunately) not under our control. However, there are many tax-related levers we can pull (e.g. proactive planning, tax-aware asset management, strategic withdrawals, tax-aware long-short investing, and more) to increase your tax efficiency and protect your retirement income.
- Longevity and healthcare. Nobody knows if they’re going to live 5, 10, or 30+ years in retirement, and wellness is unfortunately not guaranteed—or easy to predict. It’s important to consider the type of healthcare you want, and if your goal is to age in place or relocate later in life.
- Sequence of returns risk. Reaching your savings goal doesn’t automatically equate to long-term financial security, because poor market performance early in retirement—combined with ineffectively managing your investments—can shorten the lifespan of your portfolio. You need a plan that can adapt to market ups and downs—and a partner to steer you through those gametime decisions when they occur—to avoid having your net worth take a hit you may not have time to recover from.
- Lifestyle goals. What does your ideal retirement actually look like? Do you want to travel? Buy a beach house? Spend time visiting your kids? Donate to causes you care about? Volunteer? Start a passion project? All of the above—or several other things? Whatever your vision is, we want to help you articulate it and then build a retirement fund that makes it reality–because we want to see you thriving.
This is just the start of the list of other considerations that need to be taken into account when deciding when you can realistically retire (and still have the lifestyle you want). Reality is far more complex than general rules-of-thumb or simple calculations, and your financial plan should reflect that.
That’s why our team helps clients blend comprehensive life planning with real numbers, starting with their Annual Spending Number.
Your Annual Spending Number (ASN) is the realistic, personalized annual income you need to live your desired retirement lifestyle, including the taxes you’ll pay. It becomes the anchor for investments, withdrawal order, Roth conversions, RMDs, Social Security timing, asset location, and more.
When your savings target is tied to the number that will enable the life you actually want—not an oversimplified guesstimate—you get something numbers alone can’t provide: peace of mind.
A plan that anticipates taxes, market fluctuations, and real-life curveballs lets you adjust for your ASN without second-guessing every decision, so you can move forward, confident you’re funding the future you care about.
The Question You’re Probably Asking Yourself: “So, How Much Do I Need to Retire?
How to Determine Your Annual Spending Number
Before crunching numbers, let’s get clear on the life you’re aiming to fund with three questions to reflect on. Remember: the goal isn’t perfection, it’s alignment. A few simple inquiries can turn “someday” into a plan that fits the way you actually want to live–and gives your savings a purpose you can stick with.
1. When do you want to retire?
Choosing a target age helps you know how long your money needs to last, and how many years you have left to build the nest egg. If you’re unsure, pick a provisional age (say 62, 65, or 67) and test a few possibilities—we often pressure-test multiple scenarios with our clients.
It helps to picture the life your nest egg needs to support. Try these prompts:
- What would a great weekday in retirement look like—morning to night?
- How different is that day from today? What would need to change?
- How’s your health now, and what activities do you want to protect or improve?
- Do you plan to work part-time, consult, volunteer, travel regularly, help family?
There’s no right answer, only the one that fits your values.
For some of our clients at Hendershott Wealth, their ideal retirement lifestyle includes a month-long trip abroad each year. For others, it means enabling their children to purchase a first home by gifting them the down payment. For others, it means a dedicated amount allocated to certain charities each month.
And still for others, it means reaching financial independence and retiring early (what’s popularly known as the FIRE movement).
This is your retirement, and having financial freedom means having choice in what that looks like. Getting clear here makes everything downstream (savings rate, investment mix, withdrawal strategy) more precise.
2. How much will you need each month?
Once a target age is on the table, estimate monthly spending. Think in three buckets:
- Where you’ll live. Staying put, downsizing, or relocating will all change your housing, taxes, insurance, and everyday costs. If you’re considering a move, look up state income taxes, the county’s property tax rate and basic cost-of-living items to sanity-check your number. If you’re planning to stay put, consider any changes you’d like to make to your current living space to make it more suitable to your retirement lifestyle.
- How you’ll spend your time. Frequent travel, hosting family, classes, hobbies, club dues—these shape the “fun” part of your budget. If you expect front-loaded travel (the first 5–10 years of your retirement), note that; we can model higher early spending that tapers later.
- How expenses might change. You’ll see some expenses increase in retirement, some decrease, and some stay the same.
- Likely lower: commuting expenses, costs associated with supporting your children, professional wardrobe, employer-sponsored 401(k) contributions, and other work-related costs
- Likely steady: your mortgage, groceries, utilities, property taxes (subject to location)
- Likely higher: travel (a big one for our clients), hobbies, leisure and self-care, and both healthcare and health insurance premiums over time
Remember, inflation compounds—even at moderate rates, costs that might seem “steady” (i.e. groceries) can rise meaningfully across decades, something we build into client plans. Once you have your approximate monthly spending target, it’s time to convert it to an approximate annual figure:
Monthly need × 12 = Annual Spending Number
So, if your monthly spending plus taxes is estimated to be $7,500, your ASN would be $90,000.
Get even more precise with your Annual Spending Number
Inside our guide, How Close Am I to Retirement?, we walk you through two alternative options for calculating your current annual spending plus the taxes you pay, with four follow-up steps to adjust your current spend for what your Annual Spending Number might be in retirement.
Is it worth 15 minutes of dreaming (and a bit more math) to get even more targeted in your savings goals? We say yes.
Download the free guide today!
3. How much income do you anticipate in retirement?
Now that you’ve determined your target retirement date and estimated spend, let’s look at how much money you might expect to receive from planned income streams.
Here are some questions to ask yourself to discover how much you might expect in guaranteed income:
- Do you expect to receive any pensions from your previous or current employer?
- How much do you expect to receive in Social Security benefits? (Go to https://ssa.gov for an estimate)
- Do you currently have any annuities that you plan to use for income in retirement?
These income streams will cover part of your spending + taxes so your savings and investments don’t have to do all of the heavy lifting.
Note: For our clients who have additional investments outside investment accounts, such as real estate or business investments, we often model what it would look like to sell them and add them to their retirement portfolio—which can significantly reduce investment risk in retirement.
In some cases, we are able to help them minimize and/or defer the entire capital gains tax through tax-aware long-short investing, part of our Ultra Tax Efficient Wealth Management® suite… something we’re happy to talk to you about.
Now, subtract the guaranteed income amounts from your Annual Spending Number to arrive at a better estimate of how much cash flow your portfolio needs to produce to fully fund your spending + taxes each year–and how much you need to save to get there.
For example, let’s say you’re calculating that you need $250k/year to live comfortably in retirement, and will reliably be able to fund $50k/year of that through pensions and Social Security.
Some “back-of-the-envelope” math can help you get an idea of your target nest egg:
Portfolio need ÷ 0.04 = Target Retirement Nest Egg
Example: $200,000 ÷ 0.04 = $5,000,000
Reminder: A 4% withdrawal rate is a rule-of-thumb starting point, not a promise. Your sustainable rate depends on markets, taxes, inflation, and whether you’ll be willing to adjust spending using guardrails. That’s why we test ranges in planning—then monitor and adjust.
Dialing in when you’ll retire, what you’ll need for spending + taxes, and which income sources you can count on turns a vague goal into a clear Annual Spending Number—and a plan you can actually follow to fulfill it.
With your ASN set, you’ll be better equipped to work with a financial advisor to design your portfolio and contributions, as well as your withdrawal order and tax strategy (including Roth conversions) to deliver that income with room to adjust when markets or life change.
The Value of a Fiduciary Retirement Planner
The “back-of-the-envelope” math done above to take your Annual Spending Number and translate that into an estimated goal for your overall retirement savings is a great start—and, it’s far from being a comprehensive or effective plan.
As mentioned at the beginning of this article, you’ll also need to be prepared to weather the risks your retirement fund faces and avoid the all-too-common mistakes made in retirement planning and withdrawals.
Those risks and mistakes include (but are certainly not limited to!) inflation, taxes, healthcare and insurance costs, large and unexpected expenses, sequence of returns risk, longevity risk, and the very real “set-it-and-forget-it” syndrome that fails to adjust your asset allocation and strategy to match your goals and risk tolerance as time goes on and markets fluctuate.
Planning for your retirement—if you want to do it with confidence, clarity, and peace of mind that all risks are being accounted for and your taxes are being minimized—is done best with a fiduciary financial advisor in your corner.
A fiduciary fee-only advisor is legally obligated to put your interests first—no commissions, no product quotas—so the guidance you get aligns with your plan, not a sales target.
At Hendershott Wealth Management, we are a team of fiduciary CERTIFIED FINANCIAL PLANNER® professionals who specialize in helping high-net-worth women, couples, and families turn an Annual Spending Number into a confident retirement plan—and we’re obsessed with reducing your tax burden to make your money go farther.
If you’re one of the many people who’s searched for “retirement planning near me” or “retirement planner near me” lately, you’re probably looking for exactly what we offer: clear answers and a steady partner.
Here’s what that looks like:
- Clarity, in plain English. You’ll know what you can spend in retirement (after tax), whether you need to adjust it when markets move, and what to do next—no jargon, and most importantly, no guesswork.
- Coordinated decisions. Investments, insurance, taxes, cash flow, Social Security timing, Medicare/IRMAA, RMDs, charitable giving, and legacy goals are all taken into account to work together instead of operating in silos—and we coordinate with your tax preparer to keep your plan as tax efficient as possible, so more of your money can be kept (and put to work).
- In-the-moment, evidence-based decision making. We’re not only with you in every step of your retirement planning—we’re with you on the day when that fund you built has to start doing its job. We’re monitoring the markets so that timely decisions and adjustments can be made to mitigate risk and make your money last longer.
- Tax-aware execution. Using our Ultra Tax Efficient Wealth Management℠ approach (and a tax-aware long-short overlay with Flex SMA when suitable), we design withdrawal order, consider Roth conversions, actively tax-loss harvest when appropriate, use smart asset location, and rebalance deliberately with an eye on you keeping more of what you earn—and watching it compound over time.
With a fiduciary financial advisor coordinating the moving pieces, you can retire with the confidence that comes from knowing your retirement plan is in the hands of a team of professionals you can trust—and your wealth has been maximized to fit your values and goals.
Start Planning Your Retirement with Clarity
If you want to know if you’re headed in the right direction—and considering all the risks, common mistakes, and missteps you need to avoid as you head down that path—we’ve got you covered:
Download our guide, How Close Am I to Retirement?
Build a Customized Retirement Plan With a Team You Can Trust
You’ve worked hard for the money you’ve earned—likely for decades. When you stop guessing at what you’ll need in order to fund the retirement of your dreams, you can start putting your money to work wisely in achieving that goal.
And then, with the right partner in your corner, you can actually enjoy your retirement the day it comes, because you know your wealth is in good hands.
You can, of course, start getting an idea of where you’re at today by running your numbers through our Retirement Calculator for a quick monthly income estimate, and then outlining your ASN.
Then schedule a Discover Meeting. We’ll translate those inputs into a coordinated investment, tax, and withdrawal plan tailored to your life.
Our team at Hendershott Wealth Management serves clients virtually across all 50 states, building resilient, diversified portfolios that are designed with tax efficiency at the forefront. We help our clients to plan for the unexpected; to protect against inflation; to know that everything from their day-to-day spending to their healthcare to their taxes to their legacy is all taken care of.
And we don’t offer a one-time plan then leave you to fend for yourself. We continuously monitor progress toward your ASN, update assumptions, and make adjustments within agreed-upon guardrails. You get clear action steps, accountability, and peace-of-mind.
We know that your retirement day is potentially the most important day of your financial life. Whether you’re preparing to retire in your 50s, 60s, or beyond, our fiduciary advisors are here to help you build a retirement strategy that fits your goals, your dreams, and the lifestyle you want to live well beyond your working years.
Stop wondering when you can retire. Start planning for it today.
Book a complimentary Discover Meeting with one of Hendershott Wealth Management’s Lead Advisors, where we’ll get a snapshot of your current financial plan, talk through your lifestyle and retirement goals, and assess your current tax drag—so we can build a confident plan for securing the financial future you’ve only been able to dream of until now.
Schedule your Discover Meeting now!
Retirement Resources
- Try | Retirement Calculator
- Download | Retirement Guide
- Read | Can I Retire at 55? What High Earners Need to Know About Early Retirement
- Read | How Long Will My Money Last? A Smarter Approach to Retirement Withdrawals
- Read | The Entrepreneur’s Guide to Saving for Retirement: SEP IRAs, Solo 401(k)s, and Tax-Smart Strategies
Frequently Asked Questions
When can I retire?
It depends; that answer comes from the balance of your retirement nest egg vis a vis your Annual Spending Number (ASN), which is the income you need each year to support your lifestyle and pay the bills. When your nest egg can cover your ASN and you can work because you want to—not because you have to—you are financially free to retire.
To help clients determine this number, we consider multiple factors including planned income, assets, taxes, healthcare, longevity, and market scenarios. We model multiple scenarios and set guardrails so their plan can adapt as needed—without compromising their spending power or quality of life.
How much do I need to retire comfortably?
Start with your ASN: Estimate your spending in retirement (housing, healthcare, travel, giving, taxes—don’t forget to account for large, lumpy expenses like the purchase of new vehicles, real estate maintenance, and more, all of which we account for in our Retirement Guide), multiply by 12, subtract planned income (Social Security, pensions, annuities), and plan for the remainder to come from your portfolio. Then, stress-test with taxes, inflation, and sequence risk.
Is the 4% rule enough to decide my retirement date?
It’s a starting heuristic, not a promise. Sustainable withdrawals depend on taxes, market cycles (sequence risk), inflation, and whether you’ll need to (and be willing to) adjust spending in years when the market is down. Your withdrawal rate may differ based on your circumstances. We prefer guardrails that raise/cut withdrawals within agreed bands.
How does a fiduciary advisor help versus doing it myself?
As fiduciaries, we’re obligated to put your interests first. That duty informs how we coordinate investments, taxes, withdrawals, Social Security/Medicare timing, RMDs, insurance recommendations, and estate goals in your financial plan. The complexities of taxes, regulatory requirements within your investment accounts and portfolio construction are what we work with day-in and day-out, and we’re here to monitor and adjust your investments along the way—so you don’t have to manage it all alone.
What’s the best withdrawal order to minimize taxes?
General best practices: taxable accounts first (manage taxable gains/losses), then pre-tax to fill lower brackets or pre-RMD, then Roth for flexibility. However, the sequence can change year-to-year based on markets, tax brackets, ACA subsidy and IRMAA thresholds, and your spending guardrails. We always recommend consulting with a fiduciary financial advisor to ensure your withdrawal plan is flexible enough to support you through market ups and downs.
How do healthcare and longevity factor into “when can I retire”?
They’re core inputs. With our clients, we build in a healthcare line item (pre- and post-Medicare eligibility), model longevity across decades, and test plans under conservative cost and lifespan assumptions so income stays sustainable.
Should I do Roth conversions before or during retirement?
Often yes—especially in lower-income years. Thoughtful conversions can reduce any future unwanted RMDs and give you more options for controlling how much tax you pay (and when) over a multi-decade retirement. We coordinate amounts and timing with tax brackets, ACA subsidy thresholds (pre-65), and Medicare IRMAA thresholds (post-65).
How often should my retirement plan be reviewed?
At least annually, and whenever life changes (retirement date shift, home move, inheritance, divorce or marriage, sale of a business) or tax laws update. We monitor progress to our clients’ ASN over the year and adjust within guardrails to balance as needed rather than react to headlines.
Disclaimer:
All investing involves risk, including the potential loss of principal. There is no guarantee that any investment plan or strategy will be successful. Advisory services provided by Hendershott Wealth Management, LLC (“HWM”), an investment advisor registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training.
All written content in this article is for information purposes only and does not constitute an offer, or solicitation of an offer, or any advice, or recommendation to purchase any securities or other financial instruments–and may not be construed as such. Opinions expressed herein are solely those of HWM, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.
