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Phone: 773-975-4020

Beth Kraszewski named as Top Best-in-State Woman Wealth Advisor by Forbes

Difference Between Financial Planning for Retirement

What Is The Difference Between Financial Planning Before Retirement and During Retirement?

Financial Planning is really about achieving your financial goals.   Being able to retire one day is almost always one of those goals.

For young clients who are at the beginning of their careers (20s, 30s), retirement is usually not their primary goal.  More often it is buying a house and paying off student loans.  But that doesn’t mean retirement planning should be put on the back burner.  During the early stages of your career, it is crucial to lay the groundwork for a successful retirement plan.

  • Begin contributing to retirement accounts such as a 401(k) or an Individual Retirement Account (IRA).
  • Take advantage of employer matching contributions, if available, to maximize your savings potential.
  • Establish an emergency fund to cover unexpected expenses, aiming for three to six months’ worth of living expenses. This safety net will protect your retirement savings from being depleted in times of financial stress.

As clients get older and more established in their careers, retirement planning becomes their number one financial goal.  These clients should consider:

  • Increasing their contributions to retirement accounts, trying to contribute the maximum amount allowed (for 2023 that is $22,500 annually)
  • At age 50, take advantage of catch-up contributions if you’re over 50 to maximize your savings potential ($7,500 in 2023).
  • Making sure their asset allocation is consistent with their retirement goals, risk tolerance, and time horizon.

As you get closer to retirement, around five years out, having a well-thought-out plan for a successful retirement is crucial.   A few steps to get started are:

  • Estimate your expenses, considering core living expenses, healthcare costs, travel, and potential hobbies. What you are likely to spend in retirement is a key determinant of your retirement readiness.  And it will help identify areas where adjustments can be made if needed. Not knowing what you spend in retirement is the surest way to overspend.
  • Access and review your Social Security Benefits for accuracy.  You can obtain a copy of your Social Security statement online at www.ssa.gov.  With your financial advisor, become familiar with claiming strategies.  
  • With your financial advisor, review your asset allocation and asset location with your advisor.  Asset allocation is, at a high level, the mix of stocks and bonds; whereas asset location is focused on the type of accounts to locate those investments.  Ideally, the least tax-efficient assets are in retirement accounts.
  • Identify potential risks and obstacles and take steps to mitigate those risks.  Risks in retirement include more than market risk.  There is inflation, overspending, rising healthcare costs, long-term care, and longevity risk – to name a few.

As you get a year or two away from retirement, your financial focus shifts to sustaining your lifestyle and making your savings last.  The primary goal is to enjoy retirement without financial worry — so you can enjoy your well-deserved time off to spend with family, traveling, hobbies, or whatever is your dream.  

  • Develop a withdrawal strategy to ensure savings and investments last throughout your retirement. Consult with a financial advisor to develop a personalized strategy aligned with your unique circumstances.
  • Be diligent about tax planning and mindful about how income affects Medicare premiums.
  • Regularly review and reassess your financial plan, keeping an eye on market trends, inflation, and changes in personal circumstances. Adjust your portfolio and spending patterns as needed to maintain financial stability.

Financial planning for retirement is a lifelong journey that demands thoughtful planning and ongoing monitoring and adjustments. The journey does not end upon retirement.  Remember to seek professional advice when needed and stay actively engaged in managing your finances to ensure a secure and fulfilling future. With careful planning and disciplined execution, you can embark on your retirement years with confidence and peace of mind.


Opinions expressed in the attached article are those of the author and are not necessarily those of Raymond James. Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors. Raymond James is not responsible for the content of any website or the collection or use of information regarding any website’s users and/or members. Investing involves risk and you may incur a profit or loss regardless of the strategy selected, including diversification and asset allocation. Before making an investment decision, please consult with your financial advisor about your situation.