Step #1

A Special Report:

Your Fabulous Retirement... Step #1: 

Planning for retirement can seem like having a second job! And one with an annoying, overbearing boss (tick-tock...) at that.

There’s no denying that creating and executing a plan for the last quarter of your life takes some time and effort but it doesn’t have to be so overwhelming.

By following this step-by-step guide, you can relax, knowing you’re on the right path, headed towards a secure and prosperous retirement.

The Truth About Your Retirement Income Needs

Money Tree

How much income do you want from your retirement funds? 

"A lot" or "as much as possible" aren't going to get you what you need.

Like any goal, the more specific you are, the more likely you are to obtain it.

So, step #1 in planning a successful retirement is: find your NUMBER:

>> The $$$$ you need in your investment account when you start your fabulous 25, 30, even 35 or 40 years of retirement.  

To find your NUMBER, you'll need to know these 3 things:

    • Anticipated expenses during retirement. 
    • Projected income from Social Security** or other government programs. *** 
    • Expected income from pensions and annuities you are vested in.

The difference between: 

A) what your retirement lifestyle will cost, and

B) your projected income from pensions and programs,  =

C) what you'll need from your savings and investment accounts each year of retirement.

** If you're not sure how much you're entitled to from Social Security, check with (open an account) at: 

*** Readers outside the US will need to contact their pension and benefit providers to verify any expected retirement income. 

​We all know making long-term plans includes a fair amount of guesswork but just taking a stab at it puts you in an elite minority of future retirees who know what they want and need.

 As we start to develop a plan, future expenses are the biggest variable. To simplify getting a realistic estimate of retirement income needs, you'll start by comparing your (projected) retirement expenses to your current expenses.

Use one of these three methods to estimate your expenses (and how much income you’ll need) in retirement: 

1. Take a quick quiz (1st Tab below)

2. Or, delve into the nine major expense categories and estimate increases or decreases in retirement (Second Tab)

3. Gather your current data (income, taxes, expenses) and use the retirement ratio formula to find your target (3rd Tab)

  • 1. QUIZ 
  • 3. FORMULA 

Retirement Expenses Quiz

1. Will your mortgage (or rent) payments change?                                                   



My home will be mortgage free.



The mortgage/rent won’t change much. 


I plan to increase my housing costs. 


2. What will you pay for health insurance and treatments?                                         



I expect my payments to decrease. 



My medical costs should be similar. 


My insurance and out-of-pocket will increase. 


​** Unless you have access to a guaranteed, low cost health insurance program (or plan to relocate to a country with universal coverage), most of us can expect a rise of 5% or more per year in medical costs over our lifetimes!

3. How much debt will you carry in retirement?                                                          



​I am (or plan to be) debt-free by retirement. 



​I’ll continue making my regular payments. 


​I plan to borrow more money while retired. 


4. What kind of major purchases do you anticipate making in retirement?             



​Little or none - my home and car are fine. 



​I’ll need to replace cars and appliances. 


​I plan to upgrade after I retire. 


5. How much (and what type) of travel will you want to do during retirement?       



​Not much - I’ll let the world come to me. 



​I enjoy getting out to see folks. 


​I’ll finally have plenty of time to see the world! 


6. What do you plan to spend on hobbies, gifts and other recreational activities?



​Not so much - I’ve got what I need. 



​I plan to maintain my activities and giving. 


​More time means I’ll spend more on recreation. 


7. Will you continue to provide financial assistance to children and/or parents?



​No - they’ll be able to take of themselves. 



​Some - they count on my help. 


More - I’m wealthy and they need help. ​


Retirement Income Quiz Score:  

IRR (Income Replacement Ratio):

Zero - 1


2 - 4 


5 - 8 


9 - 12 




Now, multiply your current income by your IRR.

If your current income is $100,000,

and your IRR is 70%,

That's ($100,000 x .70) = $70,000.

Subtract any pensions and programs income you can count on receiving, and the remainder is the amount of income you'll need from your savings and investment accounts each year.

Of course, that’s still an estimate - but your answers to these seven questions will help you create the retirement lifestyle you desire. Later, you can spend more time comparing your current expenditures and your post-working life projections and create a detailed budget, for your:

  • early, mid and later retirement phases...

... and end up with a more accurate projection of your investment income needs. So, 

How Much Do You Need in Your Investment Accounts to Fund Your Retirement Lifestyle??  

Money Tree

The Key to a Fabulous Retirement:

Know your “NUMBER”

I teach people to find both their minimum number and a high-end number. Once you reach your minimum, you can consider taking some chances - what if you quit your high-paying, high-stress job early and go work for that non-profit at a drastically reduced salary?

Or maybe... start taking all your vacation days and check a few bucket-list items off before you’re too old to enjoy an elephant ride through the jungle or a hot air balloon ride? 

And, you've still got your big, high-end NUMBER the one that would keep your accounts growing throughout retirement and fund all your dreams: round-the-world trips, grandkids' colleges, charitable endowments - whatever you've got on your list!

>> A Quick, Easy Way to Find Your Number: 

Vanguard offers a free, easy to use calculator

(click on the image below to create one for yourself).

​In this example, for every $11,250 in annual income you want from your investment accounts, you’ll need to start with a quarter million dollars to be 73% sure it will last 30 years. 

​Let's see how this works for a typical MoneyDiva: 

Ruth – a divorced, single, professional & mom of two college students

Ruth has a fairly high expense lifestyle to go along with her executive level salary of $120,000. She pays her mortgage, two car payments (one for her, one for the kids to share when they’re home) and some college fees. 

She plans to pay off her mortgage before retirement, own a paid-off car and have no other debts. She's counting on her kids supporting themselves and her elderly parents passing on before she quits working.

She's entitled to half her ex-husband's pension and got half the 401k after her divorce 8 years ago - but she hasn’t added any more money to her retirement accounts since then. So her beginning 401k balance is $100,000.

Ruth likes her job - it’s physically easy with a minimum of travel, so she’s planning to work until she’s 70 (or they put her out to pasture, as she says). Then, hopefully, a quiet retirement with visits from the grandkids and a modest retirement lifestyle – remaining in her home (renting out a room is an option), flower gardening, quilting and a little travel visiting relatives and friends.

That means her expenses in retirement should be lower - let’s say 70% of her $120,000 income: $84,000.

If she works until age 70, she’ll receive a higher Social Security payment - about $40,000.

(from the easy to use estimator at:

She’s also entitled to ½ her husband’s pension which starts when he turns 60 - about $10,000 a year (that's an extra $100,000 she'll receive before she retires that can add into her savings/investment accounts).

To get to the $84,000 she needs in post-work income, she'll need to withdraw $34,000 a year from her retirement accounts for at least 25 years.

Using a conservative 4% withdrawal and 25/50/25 allocation, her minimum NUMBER is: $850,000 by age 70. 

Starting with $100,000 in her 401k, and with 20 years to save and invest, she should be able to use the power of compounding to easily meet or exceed that goal!

The calculator at says she needs to save only 12% of her gross salary: $1200 per month, if she can earn a 6% return over the next 20 years. The Vanguard Balanced Index Fund (60% stocks, 40% bonds) has earned over 8% since inception in 1992 and 7.5% over the last 10 years. So, Ruth should be able to reach or exceed her NUMBER of $850,000 by saving a relatively modest amount of her current income and investing prudently. 

Get a Big Jump Start on Your Desired Retirement Lifestyle...

By Knowing the Answers these Questions:

How much income will you need from your retirement account(s)?


Your minimum NUMBER (plus, your high-end NUMBER) OR: 

How much will you need in your investment accounts to fund a fabulous retirement?​

I’d love to hear about how this special report helps you find and achieve your retirement income goals. Talking about income and financial information can be a taboo subject so, if you’d prefer to email me privately, with your calculations or any questions send me an email at: Leah(at)

While I can’t offer specific financial advice, I am happy to clarify any points, direct you to more resources and cheer you on!

Live Long and Prosper, Leah the

1 thought on “Step #1”

Comments are closed.