Will Your Nest Egg Last? Assess Your Retirement Savings Target

By Jeff Gilbert

The ability to reach your retirement dreams often depends on having a solid “nest egg.” But the real question is, how long can that nest egg last? Even sizable retirement savings can quickly deplete due to unexpected costs, lifestyle shifts, and market volatility.

To determine whether your retirement savings target is on track, it’s essential to go beyond basic formulas. A deeper dive into your desired retirement lifestyle, current savings, expected expenses, and potential income sources is key.

Let’s explore the essential steps to accurately assess whether your retirement savings can support you all throughout your retirement years.

When Do You Want to Retire?

The first thing to consider when deciding how much money you need to save is your age, both now and in retirement. If you wish to retire early, you have fewer years to save for a longer retirement. Additionally, if you begin receiving Social Security payments prior to reaching full retirement age, you’ll have to account for a lower monthly payout. 

The state of the stock market can also influence how much money is required and how long it lasts. Of course, you can’t actually predict the state of the stock market when you retire, but it’s still a wise idea to plan for the possibility of retiring in a bear market.

What Type of Lifestyle Do You Envision for Yourself?

Have you given any thought to the kind of retirement lifestyle you want to live? If you’re certain you want to travel, play golf, or spend time with your grandchildren, consider what that entails and the associated expenses.

For example, if you intend to travel, ask yourself the following questions:

• Do I want to travel abroad or domestically?
• How frequently would I like to travel?
• How would I prefer to travel? (e.g., car, airplane, or RV) 
• Where would I like to stay? (e.g. a five-star hotel, an Airbnb, or with family members)
• Do I want my family to join me on the trip? Do I plan to cover their expenses too?
• Can I continue to live at my primary home? If so, who can watch my house and maintain it while I’m traveling?

Even if your dream is simply to spend time with your grandchildren, you should still think through the associated costs. To some, spending time with grandkids means babysitting a few times a week. For others, it means footing the bill for various trips for the entire family. 

Either way, plan out the specifics of your vision so you can see how much money is needed to make that dream a reality.

What Is Your Current Debt Level?

Let’s talk about another retirement-income influencer: debt. 

There are two significant drawbacks of taking on debt in retirement:

1. It reduces your cash flow for non-essential items like housing, travel, and hobbies.
2. It can deplete your retirement funds more quickly, meaning you might eventually run out of money or have to change your lifestyle.

If you carry debt, a smart move is to carefully examine your debt and determine how much cash flow you need in retirement to pay for anticipated expenses. 

Before they retire, some people prefer to pay off any high-interest consumer debt. Some even go so far as to pay off their auto loans and mortgage.

Are You Planning to Work in Retirement?

One of the better ways to stay active, keep your mind sharp, and feel purposeful after retirement is to work.

Some retirees decide to pursue consulting as a second career. Others choose to take a part-time, low-stress job and work at a retail store or family office. 

Whatever you decide, you won’t need to save as much to live comfortably if you plan to work after retirement.

Schedule a Retirement Planning Consultation

Analyzing your retirement savings target starts with understanding your full financial picture, including your lifestyle needs, debt obligations, and long-term goals.

At Balboa Wealth Partners, helping you define and build your unique retirement savings target is our priority. When you entrust us with your financial journey, you gain peace and clarity knowing your future is being handled with experience, care, and integrity. To schedule a consultation, give me a call at 949-445-1465 or email me at [email protected].

Scottsdale office: 480-801-5010, [email protected]

About Jeff

Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With over three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Scottsdale, Jeff and Balboa work with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email [email protected]. 

Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.