Can You Keep Your Lifestyle in Retirement?

Can You Keep Your Lifestyle in Retirement?

By Aspire Advisors

As a healthcare professional, you are well aware of the costs associated with staying healthy. It is one of the largest chunks of any retirement spending plan, and many people underestimate the cost and level of care they will need. Between supplemental Medicare plans, out-of-pocket costs, and planning for long-term care, it can feel impossible to meet those expenses and maintain your current lifestyle in retirement. It doesn’t have to be that way, though. 

Knowing when you can retire and what type of retirement you can lead is mostly a matter of seeing your money clearly. With proper planning and wise investment decisions, you can minimize the uncertainty around retirement. Here are four factors to keep in mind:

Identify Your Income Sources and Manage Fragmentation

Before assessing what type of lifestyle you can lead in retirement, you must first identify where your retirement funds will be coming from. Common sources include:

  • Qualified retirement accounts such as 401(k)s, 403(b)s, and 457(b)s
  • Traditional or Roth IRAs
  • Health savings accounts (HSAs)
  • Social Security benefits
  • Investment portfolios
  • Life insurance policies
  • Annuities

If you’re like many healthcare professionals, you’ve probably worked at a couple different hospitals throughout your career and you may have multiple retirement accounts that are not consolidated. This is called fragmentation, and it can eat into your income stream by causing larger tax liabilities. 

For instance, all qualified retirement accounts (except Roth IRAs) have required minimum distributions (RMDs) once you reach age 72. This means you are obligated to withdraw and pay taxes on a certain amount each year. If you have three accounts with RMDs, but you can easily survive off of just one distribution, you can end up paying taxes on two income streams that would have been better left undistributed.

Fragmentation can be alleviated by merging your accounts through consolidation. This will allow you to take one RMD instead of three, thereby saving you money on taxes and keeping your funds invested longer. It’s important to note that there are very particular rules surrounding consolidation and the process should be reviewed with a professional whenever possible.

Where Is Your Money Going?

Our clients often come to us with concerns about how soon they will be able to retire, whether they can maintain their desired lifestyle, and how to make sure they won’t run out of money. A crucial part of answering those questions comes from budgeting and tracking expenses.

Without understanding your retirement needs, there is simply no way to assess where you stand. It’s important to record every expense you can realistically estimate, including basic living expenses, mortgage and debt payments, life insurance, health insurance, and long-term care. 

It’s often said that retirees should plan to spend about 80% of their pre-retirement income on their post-retirement lifestyle, but, in practice, that number is very subjective. The amount of income required largely depends on the type of lifestyle you want to lead, which is even more of a reason to plan ahead. 

Assess Your Level of Risk

Once you have a complete picture of your finances, you will be able to determine whether you’re on track for retirement. At this point, you can evaluate the level of risk in your portfolio and make any necessary adjustments. 

If you find that you are not on track for the lifestyle you want to lead, you can consider investing in riskier assets with the hope they will earn a bigger return or you can extend your retirement timeline. 

Conversely, if you find you are on track for retirement, you can consider reducing your overall level of risk and invest in more conservative assets. Either way, your risk tolerance is just one aspect of your full financial situation, and, as such, it must be analyzed as one piece of a much larger puzzle.

Review Your Plan

Lastly, be sure to review your retirement plan annually so that you can make adjustments as needed. Try as we might, we simply cannot plan for everything, and partnering with a trusted advisor can help keep you on track no matter what pops up. 

At Aspire Advisors, we can help you navigate the road to retirement. If you’re ready to review your retirement needs, reach out to us today! Call 877-760-3540 or email to schedule a complimentary consultation.

About Aspire Advisors

Aspire Advisors, LLC is an independent, fee-only financial advisory firm providing financial planning and investment management solutions for clients throughout Westchester County and the broader tri-state area. The Aspire team has a long track record of helping nonprofits, hospitals, physicians, and healthcare executives. As a registered investment advisor, Aspire is a fiduciary and has a legal obligation to act in their clients’ best interests. To learn more about what it’s like to work with Aspire Advisors, visit

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