There are five steps to achieve a successful and secure retirement. It’s like climbing a mountain up to its peak – which is that retirement date – and there are five base camps to get to in order to reach that final peak. I know that’s a bit corny, but we don’t want to skip any of these. You may actually already be in between a couple of these, but you don’t want to skip any because each one is important.

Step One: Monthly Expenses

We’re starting at the bottom – you’re starting to think more about retirement and hopefully you’re feeling excited about your future. If you’re not, you should be. After helping a lot of people get to this point or get to retirement, we’ve seen that this could be the most fulfilling and life-giving part of your life.

Step one is to guess at your monthly expenses. What amount of money do you want coming into the bank after you’re done working? What about expenses? You don’t have to even look at or any of the other budgeting things, just take a guess.

Let’s pretend that the number is $10,000 a month coming into the bank for spending money. You might be thinking, “Who in the world needs $10,000 a month?” Or if you’re like some of our clients, you might be thinking, “I’m going to need more than that.” Don’t dwell on the amount – you’re different from everyone else, and comparison is the enemy of contentment.

Step Two: The 4% Rule

Step two on the mountain is the simple 4% rule. If you’ve seen other videos I’ve done, then you know that I don’t love that rule because if you only base your plan on that and don’t consider anything else, it could really put your plan or your retirement in danger. However, this is step two, so it’s just a quick pit stop. Let’s take that $10,000 a month x 12 months a year – that’s 120K a year. I’m not factoring in things like inflation. Then let’s take other income like social security, and this gives you the amount you’ll have to start taking from your investments. Divide it by 0.04 and that’s the 4% rule.

In this hypothetical, you’ll need about $2 million bucks just according to the 4% rule. Again, using your own numbers that’s how much you want multiplied by 12, minus your social security in the future or other income, divided by 0.04.

Step Three: Online Retirement Planner

The third step is where things get more interesting and secure. If one of your goals is to increase peace of mind around retirement, a great way to do that is to have a more specific plan and to look at a few what-if scenarios. I’d recommend finding an online retirement planner that allows you to explore these various what-if scenarios.

One piece of advice as you’re putting in numbers and looking at the result in the online planner is to write down the questions that are coming to mind or the things you don’t yet understand. This is very important, and you’ll see why in the next step.

Step Four: Meet With Specialists

Onto step four: take that plan that you got from the online retirement planner and then meet with two CFP professionals who specialize in retirement planning. You don’t need to hire that person to become your ongoing financial planner, but getting a second pair of eyes to get some validation for what you already found out could be a really good idea. Specialization is important when deciding with whom to seek counsel. If you had a really important surgery, would you go to the doctor who’s done eight of those surgeries before, or the doctor who’s done 3,000 of the exact surgery that you need?

Have them create a plan for you and then compare your findings with them. This is where you can ask those questions that were coming to mind as you were creating your own plan in step three.

At the end of those meetings with the retirement planners, you should have a pretty good game plan to follow that gets you to that successful and secure retirement you’re looking for. And hopefully they can help you think about the next steps you should be taking. If anything needs to be improved or changed, that’s when you hopefully get that good advice.

Step 5: Retirement Is Not an Event

Now, there’s one more step as we’re looking at this mountain, and it’s a really important one. If you continue to run your retirement plan by yourself, it’s important to recognize something. Retirement is a big thing you need to plan and prepare for, but when you get here with that level 10 confidence, remember that this is not an event, it’s a process. The practice of having regular monthly or quarterly check-ins is important.

What you wouldn’t want to have happen is to create the plan, you’re feeling good, and then you get into retirement and stop checking to make sure you’re still on course. I think it was Dwight Eisenhower who said, “Plans are worthless, but planning is essential.” To that, I would say, “Plans are actually good, but the continual process of planning is even better.”

Disclaimer: Since we don’t know your specific situation, none of this information should be construed as tax, legal, financial, insurance, financial advice, or other advice and may be outdated or inaccurate. It is your responsibility to verify all information yourself. This content is prepared for entertainment purposes only. If you need advice, please contact a qualified CPA, attorney, insurance agent, financial advisor, or the appropriate professional for the subject you would like help with. Streamline Financial Services, LLC or its members cannot be held liable for any use or misuse of this content.

Affiliate Disclaimer: This post may include affiliate links where we may earn a payment when you click on the links at no additional cost to you. 

Disclosures: Securities offered through LaSalle St. Securities LLC (LSS), member FINRA/SIPC. Advisory services offered through LaSalle St. Investment Advisors LLC (LSIA), a Registered Investment Advisor. Streamline Financial Services is not affiliated with LSS or LSIA. LSS is affiliated with LSIA.