If you’re within five years of retirement, the question usually isn’t “Am I doing enough?”
It’s: “Do I actually know if this works?”
And that’s a fair question. You’ve spent decades saving, investing, and making thoughtful financial decisions. But now, as retirement gets closer, clarity matters more than accumulation.
The good news? You don’t need complicated software, endless projections, or guesswork to get there.
You need confidence around three key numbers—and what they mean for your lifestyle.
The 3 Numbers That Determine Retirement Readiness
1. Your Real Retirement Spending Number
This is where many plans start to drift.
Your retirement spending is not the same as your current spending. In fact, it often shifts in ways that surprise people:
- Healthcare expenses typically increase as employer benefits go away
- Travel and lifestyle spending often peak in the early years
- Work-related costs (commuting, clothing, meals) decline
According to the Employee Benefit Research Institute, the average 65-year-old couple may need hundreds of thousands of dollarsfor healthcare expenses alone in retirement—highlighting the importance of planning realistically.
The goal here isn’t perfection. It’s clarity.
You want a monthly, after-tax spending number you feel confident about—not a rough estimate.
2. Your “Guaranteed Income” Foundation
Next, identify income that shows up regardless of market conditions.
This typically includes:
- Social Security benefits
- Pension income (if applicable)
- Other contractual income sources
For many households, this becomes the foundation of retirement income.
Some individuals also choose to allocate a portion of their assets to tools designed to provide predictable, contractual cash flow. This isn’t about chasing higher returns—it’s about reducing reliance on market withdrawals during volatile periods.
Whether that approach makes sense depends entirely on your situation, goals, and risk tolerance.
The key question is simple: How much income is already “covered”?
3. The Income Gap Your Portfolio Must Fill
This is the most overlooked—and most important—number.
Let’s say your lifestyle requires:
- $9,000/month in retirement
And your guaranteed income provides:
- $6,000/month
That leaves a $3,000/month gap your portfolio must reliably generate.
This gap determines:
- How much risk you can reasonably take
- How withdrawals should be structured
- How resilient your plan is in the early years
In plain terms:
It’s not just what you have—it’s how and when you use it.
Why This Matters More Than Total Net Worth
It’s easy to focus on your portfolio balance.
But retirement doesn’t happen in averages or spreadsheets—it happens in real time, month by month.
What matters most is whether your plan holds up when:
- Markets are volatile
- Withdrawals begin
- Confidence matters most
A clear understanding of your income gap allows you to plan around:
- Cash reserves for stability
- Withdrawal sequencing to reduce risk
- Tax coordination across accounts
- Aligning investment risk with actual income needs
This is where structure replaces uncertainty.
A Simple Retirement Readiness
Ask yourself three questions:
- Do I know my realistic retirement spending number?
- Do I know exactly how much guaranteed income I’ll have—and when it starts?
- Do I have a written strategy for how my portfolio fills the gap?
If any answer is: “Not exactly.” That’s normal. And more importantly, it’s fixable.
What to Do Next
If you’re within five years of retirement, this is the window where decisions matter most.
A thoughtful retirement readiness review can help:
- Validate your spending assumptions
- Coordinate income timing (Social Security, withdrawals, etc.)
- Stress-test the early years of retirement
- Align your investment strategy with income needs
Clarity doesn’t come from predictions. It comes from structure.
At Longview Insurance & Investments, we take a coordinated approach to planning—helping you connect each decision into a clear, cohesive strategy built for real life.
If you’d like help understanding your three numbers and how they work together, we invite you to connect with our team to see which approach fits your unique situation—and move into retirement with clarity and confidence.
Sources
- Employee Benefit Research Institute (EBRI) – Retirement healthcare cost estimates: https://www.ebri.org
- Morningstar – Safe withdrawal rates and retirement income research: https://www.morningstar.com