It would be convenient if there were a single best retirement strategy that would work for everyone. There isn't, though. Each of us approaches retirement from a different place, and in a different financial condition, and each of us has a different vision of what our ideal retirement will look like.

There are a lot of factors to consider for a great retirement strategy -- such as your expected healthcare costs, living expenses in retirement, life expectancy, savings, investments, and retirement accounts such as a Roth IRA. The list of questions below can help you approach them all, as you aim for maximum retirement income.

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What's your life expectancy?

How long you're likely to live is a good place to start, because it has a lot to do with your retirement planning. Some informed estimates can help you get an idea: The Social Security Administration (SSA), for example, has stated that "About one out of every three 65-year-olds today will live past age 90, and about one out of seven will live past age 95." There were recently more than 70,000 centenarians (people in their 100s) in the U.S., too -- making clear that it's not out of the question for some of us to live beyond age 100.

Your life expectancy will likely depend partly on chance, but also on your health and your genes. If many in your family have lived to 95, you may well do so, too. If you're 60 and in poor health, with a number of relatives who have died in their 70s, then your odds of hitting age 95 are not as good. It all matters because the longer you live, the longer your retirement nest egg will have to support you. If you retire at age 65 and live to 95, that's 30 years -- a rather long period.

What do you expect your living expenses to be in retirement?

Another factor in your retirement plan is what your retirement living expenses are likely to be. Some of these expenses, such as electricity and property taxes, will be easy to predict, while others will fluctuate a lot over time. Your overall expenses will likely fluctuate, too. Many retirees spend a bunch in their early retirement years because they're still relatively healthy and active, traveling, eating out, shopping, and so on. As they age, they may stay home more and spend less. And as they age further, they may start having more serious health issues, causing overall healthcare spending to rise.

Give some thought as to what your expenses are likely to be. Consider your hobbies, such as golf or gardening, and what they cost. Consider your travel plans, gifting habits, and other standard parts of a household budget.

What do you expect your healthcare costs will be in retirement?

Speaking of healthcare, there's a good chance that it will cost you more than you think in retirement. Much more. According to one estimate, from Fidelity, the average 65-year-old couple will spend $285,000 out of pocket on healthcare in retirement, and that doesn't include Medicare or long-term-care costs. Another estimate, from HealthView Services, suggests that the average healthy 65-year-old couple retiring this year will spend nearly $364,000 on healthcare in retirement, on Medicare, supplemental insurance policies, and other out-of-pocket costs.

You can aim to shrink your healthcare costs by getting and staying healthy, such as by eating nutritious meals, exercising frequently, and seeing your doctor regularly.

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How much do you have in savings?

How much you have already saved for retirement can make a big difference in how comfortable it will be. Unfortunately for many people, their savings are negligible. About 21% of Americans have absolutely no retirement savings at all, according to a 2018 study by Northwestern Mutual, and about a third have less than $5,000. Yikes.

Here's why it matters: If you're 45 and hope to retire at 65 and have $100,000 socked away for retirement, invested effectively, it might grow at an annual average of 8% and eventually amount to more than $450,000. Having $50,000 could net you more than $225,000 in retirement.

What retirement accounts do you have -- traditional or Roth IRAs or 401(k)s?

A good place to be accumulating much of your retirement funds is in a tax-advantaged retirement account, such as one or more IRAs and/or 401(k)s, of the traditional or Roth variety. For 2019 and 2020, you can contribute up to $6,000 per year in all your IRAs combined, plus an additional $1,000 if you're 50 or older. Those limits are even more generous for 401(k)s (and their cousins -- 403(b)s and 457 plans: For 2019, the limits are $19,000 plus $6,000 for those 50 or older, and for 2020, they rise to $19,500 and $6,500.

The traditional IRA or 401(k) will take your contributions on a pre-tax basis, meaning that you can shrink your taxable income by the amount of your contribution, shrinking your taxes for the year of the contribution. That money will eventually be taxed upon withdrawal, probably in retirement. Roth IRAs or 401(k)s take your money on a post-tax basis, meaning that you get no upfront tax benefit. But if you follow the rules, your withdrawals will be tax-free.

What investments do you have -- and should you have?

Your investing-for-retirement plan should also feature smart investments that are likely to have your money growing at a reasonable clip. It's usually best to avoid your 401(k)'s default investments, as they'll likely be too conservative. Long-term investments will probably grow fastest in stocks, but that doesn't mean chasing speculative high-flyers or loading up on penny stocks. Instead, consider a simple, low-fee, broad-market index fund, such as one that tracks the performance of the S&P 500.

Dividend-paying stocks, or funds that are loaded with them, are also smart for retirees or pre-retirees, as they will generate income regularly, without your having to sell shares. Better still, healthy and growing companies will tend to increase their payouts over time, helping you to keep up with inflation. In retirement, if you have, say, $300,000 spread across some solid dividend payers with an average yield of 4%, you'll be collecting $12,000 in dividend income annually -- or $1,000 per month.

What real estate do you own?

Give some thought to any real estate you own, too. It's a good goal to try to enter retirement with your mortgage paid off, in order to have less overhead in your fixed-income years. (You can speed that process along by making extra payments toward your principal every year.)

You might want to do some buying and/or selling of real estate, too, related to your retirement. For example, if you live in a high-tax state, you might want to move, in order to live out your retirement in a low-tax state. You might also consider owning some rental property for the income, though research that possibly deeply, as it's not always as easy or lucrative as it may seem.

You might also consider getting a reverse mortgage in retirement, if you're in need of more income. Read up on the pros and cons of reverse mortgages first, though, because they're not for everyone.

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What will your Social Security benefits be in retirement?

Social Security is likely to be a major source of income in your retirement -- though it may also offer less than you expected. Fully 45% of single older Social Security beneficiaries get 90% (or more!) of their retirement income from it, while about 21% of married ones do so. Social Security provides about a third of retirement income, on average, for retirees.

To find out just what you can expect to collect, open a "my Social Security" account at the Social Security Administration (SSA) website. You'll be able to see the SSA's record of your earnings over the years as well as its estimates of your future benefits. For context, know that the average monthly Social Security retirement benefit was recently $1,475 -- about $17,700 per year. Know, too, that there are some ways that you can increase your Social Security benefits.

When should you retire -- age 62? 65? 67? 70?

When you should retire is a big puzzle to solve. Obviously, delaying as long as you can will give you a chance to bolster your financial condition -- socking away more money, letting it grow for a longer period, and leaving you with fewer years in which you'll have to support yourself. But many people end up retiring not when they planned, but when they or a loved one get sick, or when they lose their job.

Lots of folks plan to retire at 70, but end up retiring in their early 60s -- and that's an excellent reason to not put off saving and investing for retirement. Keep in mind that when you start collecting Social Security benefits will affect how much you receive. Those who can delay until the maximum age of age 70 will get the biggest checks possible, while those who start at the earliest regular retirement age of 62 will get much smaller ones. Remember, though, that if you start early, you'll collect far more checks, and vice versa.

How much retirement income will you need or want?

So, how much retirement income do you need? Well, the answer will be different for different people. Use your estimated living expenses in retirement to help come up with an idea of needed income. Try to be conservative about it, and don't forget those possibly substantial healthcare costs. One rule of thumb is to aim for about 70% to 80% of your pre-retirement income, but much depends on your expected lifestyle and health. If you plan to do a lot of traveling or playing golf on pricey courses, you'll need more money than if you just plan to volunteer, read, and do a lot of walking. Some may get by on just 60% of their pre-retirement income.

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How much money do you need to retire with?

Another key question as you plan for your retirement and your retirement savings is just how much money to aim for -- how big a nest egg will be needed to support you throughout retirement? A rough short-cut to answering this question is to take your needed annual retirement income (from the step above) and multiply it by 25. Remove Social Security and any other income that doesn't come from your savings (such as pension income) first, though.

So if you expect to need $60,000 in retirement and you expect $20,000 in Social Security income, that leave you with $40,000 per year that you'll have to generate on your own. Take that and multiply it by 25, and you'll get $1 million. (Why 25? Because it's the inverse of 4%, from the famous, though imperfect, 4% rule. The rule suggests that if you withdraw 4% of your nest egg in your first year of retirement and adjust for inflation in subsequent years, your nest egg should last for 30 years.)

How will you amass the money that you need?

Once you know how much you need to amass, you'll need to figure out how much to save every year (or month or week). The following table can give you an idea of what can be accomplished with various sums over various periods:

Growing at 8% for

$10,000 invested annually

$15,000 invested annually

$20,000 invested annually

5 years




10 years




15 years




20 years




25 years


$1.2 million

$1.6 million

30 years

$1.2 million

$1.8 million

$2.4 million

Source: Calculations by author.

If $15,000 per year seems like what you need to be socking away, that will be around $1,250 per month, or close to $300 per week. It may be easier to think in terms of weeks or months than years. Getting to your goal can involve cutting back on spending and/or saving more.

What strategies or part-time jobs could get you extra money?

If you're starting to freak out a little, perhaps because it looks like you'll need to save much more than you think you can save, take heart. A little exploration and creative thinking can help you identify lots of ways to save money. A few adjustments to your retirement plan can make a big difference, too. For example:

  • Can you work longer and save more?
  • Can you get by with less income by tweaking your spending habits?
  • Would downsizing your home or relocating to a lower-cost-of-living region help?
  • How about if you rented out your basement?
  • Should you consider a reverse mortgage?
  • Might you look into cashing out a life insurance policy?

Putting it all together -- into the best retirement plan for you

Once you've thought through all the issues and questions above, you'll be ready to put together the best retirement plan for yourself. It should answer the following questions, that were discussed above:

  • What's your life expectancy?
  • What do you expect your living expenses to be in retirement?
  • What do you expect your healthcare costs will be in retirement?
  • How much do you have in savings?
  • What retirement accounts do you have -- traditional or Roth IRAs or 401(k)s?
  • What investments do you have -- and should you have?
  • What real estate do you own?
  • What will your Social Security benefits be in retirement?
  • When should you retire?
  • How much retirement income will you need or want?
  • How much money do you need to retire with?
  • How will you amass the money that you need?
  • What strategies or part-time jobs could get you extra money?

Armed with a plan, and with the determination to stay focused as you execute it over the years, you can build yourself a more financially secure future and a more enjoyable retirement.