“What’s Your Retirement Number?” May Not Be the Right Question

We’ve all heard the advertising. “What’s your retirement number?” This question is based on asset accumulation. If we knew exactly how long we were going to live, that calculation might be valuable. But since we don’t know that timeframe, the better question to ask is, “How much sustainable income will I need during the different phases of my retirement?”

Asset accumulation is normally the goal, pre-retirement. When planning for retirement, the focus shifts to developing sustainable income.

Sustainable Income

The primary purpose of sustainable income is to create a predictable amount to cover expenses throughout the phases of your retirement. These expenses may include mortgage, rent, property taxes, food, utilities, etc.

Retirement Phases

Phase 1 is the active retirement phase when we are able to pursue our interests with abandon. This phase is similar to pre-retirement, except there may be more time to travel and enjoy our hobbies. Many retirees in this phase actually find themselves more active than they were in pre-retirement. There are many costs associated with having the free time to pursue all your interests.


Phase 2, which takes place between age 70 and 82, finds us spending lots of time with family and friends, but we’re also devoting more time to doctor visits. By this time we’ve developed retirement patterns and life seems more stable and predictable.

Phase 3 means time and age play a role in slowing down activities and abilities for some, but many still enjoy travel and leisure activities. Discretionary spending may be reduced in this phase.

Spending Through the Phases


Understanding the three phases of retirement can have a very significant impact on planning. In terms of spending, it makes sense that we typically have less discretionary spending as we age.

The good news is we are all living and staying active longer and can expect 20, 30, even 40 years of retirement.

Planning ahead is critical. Contact us for your free consultation to make sure you are on track!