Do You Plan to Retire within 10 Years? It’s Time for a Financial Checkup

by Mitchell J. Smilowitz, CPA

If you plan to retire within 10 years, this is a good time to review your financial plan to see if you are on track.  Don’t have a financial plan?  Then this is the perfect time to develop one. Answer these five questions and you’ll be well on your way. Even if you are not retiring within 10 years, considering these issues now will start you on the road to a financially secure retirement.

 1.  How do you want to live in retirement?

The more concrete you can be about your retirement lifestyle, the more accurately you can determine the amount of money you will need.  Here are two major lifestyle issues for you and, if you are married, your spouse to consider. 

  • Location – Do you plan to move to a different location?  Closer to your children and grandchildren?  Do you want to purchase a second home?  Where you live has implications for real estate prices, property and income taxes, health insurance costs and the amount you will spend on food.
  • Activities – What do you plan to do on a day-to-day basis in retirement?  Will you continue to work at least part-time?  Spend time on your hobby? Write a book? Exercise? Volunteer? Travel? How you answer these questions will impact your financial needs in retirement.

 2.  What are your projected retirement expenses?

Once you have an idea of how you want to live when you retire, it’s time to estimate what your preferred lifestyle will cost.  Here are some basic expense categories to consider. 

  • Housing costs include not just your mortgage or rent, but also property taxes, home or renters insurance, utilities and other fees. You may also want to establish a budget to address moving and furnishing costs. (Please note: retired clergy can claim a tax-free parsonage allowance on distributions from your Joint Retirement Board account to cover your housing costs.) 
  • Factor grocery and restaurant costs into your food budget.
  • Transportation expenses can involve maintenance, fuel and insurance costs on your vehicles as well as public transportation.
  • Your choice of Medicare supplements will determine your copays and deductibles.  If you also have long-term care insurance, remember to include this cost in your projection as well.
  • Personal expenses include clothing, haircuts, hobbies, gifts and vacation.
  • Consider the taxes you will owe. Income earned working part-time; interest, dividends and capital gains on your after-tax investments; and, withdrawals from any pre-tax retirement accounts continue to be taxable. However, because your gross income likely will be lower than when you were working full-time, your tax rate may also be lower.  In addition, married couples filing joint tax returns whose income exceeds $32,000 may have to pay income taxes on a portion of their Social Security benefits.
  • Create a reserve fund. The fund should be large enough to allow you to meet an unexpected expense – purchase a car, make a major repair on your house or pay for a medical expense not covered by insurance – without undermining the rest of your budget.

Click here for a sample budgeting worksheet that may be helpful.

 3.  What will your retirement income be?  

  • Social Security – If you have not already done so, set up a Social Security account at Once registered, you can view your Social Security statement and estimate your retirement benefit.  The age you retire and your spouse’s eligibility for Social Security also impact your Social Security benefits.
  • Work Income – If you plan to continue working, how much do you expect to earn? How long do you expect to work? Will your spouse continue to work?  If so, how much will your spouse earn? (Self-employed clergy working in a ministerial capacity in retirement can continue to contribute to their Joint Retirement Board account. This can further reduce your tax liability.)
  • Investment Income – How do you plan to withdraw the money from your retirement savings? How many years will you need to rely upon this income?  If you continue to work for a few more years, you may not need to tap your savings right away.  But remember, generally, you must begin to withdraw money from your pre-tax retirement accounts once you reach 70½. 
  • The Joint Retirement Board can prepare a Projection based on your current savings in your JRB account and expected retirement date, to give you an estimate of the level of retirement income you can expect to receive. Please contact us to schedule an account review to obtain the Projection.

Click here for a Retirement Income Calculator that may be helpful.

 4.  Are You on Track? 

Once you estimate your retirement expenses and income, it’s a simple matter of doing the math. 

  • How much have you already saved for retirement?
  • How much do you need to save in order to have the income you need?
  • How many years do you plan to continue working full-time?
  • Divide the amount of income you need in retirement by the number of years you plan to work to determine how much you need to save each year.  There are calculators available online that can crunch these numbers for you incorporating the rate of return you expect to receive on your investments and the rate of inflation.

Click here for a Retirement Planner Calculator that may be helpful.

 5.  What’s Your Plan to Get from Here to There? 

Once your financial goal is clearer, you can refine your financial plan.  There are a number of strategies you can adopt. 

  • Change your asset allocation to better meet your need to increase your investment returns. While implementing a more aggressive investment strategy may increase your rate of return, if often opens you to greater volatility.
  • Decide to work a few additional years  either full-time or part-time.  Waiting a few years before starting to draw on your retirement savings can make a big difference.  For example, each year you postpone starting Social Security results in an 8% increase in your benefit.  Also, if you continue working past 70½, you are not required to take withdrawals from your current employer’s plan. 
  • Consider ways to reduce your expenses.  

There’s no doubt about it.  This is difficult – though necessary – work.  The topic of money is fraught with emotional baggage. The consequences are immense.  

Fortunately, you are not alone.  The Joint Retirement Board can assist you.  The Learning Center on our website includes articles that can improve your understanding of the issues you need to address.  For assistance developing your personal financial strategy, please contact us directly at 888-JRB-FREE or  We look forward to working with you to help you meet your current financial challenges while preparing for your long-term financial security.