Retirement Planning Guide: Build Your Baseline and Timeline

Gather a baseline you can check

Use statements and a year of actual spending to build an initial scenario. Keep account numbers and identifying documents out of any shared example.

1. Record both current ages, work-stop dates and the end of the planning horizon.
2. List balances by owner, tax type, cost basis and access date; keep home equity separate from spendable assets.
3. Build a core, flexible and one-time spending budget, with healthcare separate and income taxes excluded from the app’s spending fields.
4. Use the SSA statement checklist; collect pension and annuity terms, including survivor and inflation treatment.
5. Calculate the annual bridge funding gaps, then choose realistic funding sources.
6. Run five stress scenarios and write a response before setting an annual withdrawal review.

A synthetic household timeline

This example describes a sequence of decisions, not planner output. Ages are illustrative; Medicare changes costs and coverage rather than adding income.

Separate recurring income from dependable coverage

Rent may recur, but vacancy, repairs and financing can interrupt the net cash. Keep it on its own line and test a zero-rent year. Social Security, pension and contractual annuity payments also have program or contract limits; compare their inflation and survivor terms in the income-source table. The app can model entered income streams, but it does not verify their contractual guarantees.

Start with the life, not the portfolio

Retirement planning is often framed as a single question: How much should I save? That question matters, but it arrives too early. Your target depends on the life those savings need to support. A household retiring at 62 with a mortgage and private health insurance faces a different problem from one retiring at 68 with a pension and a paid-off home.

Write down a small set of dates first: each person's planned retirement age, Social Security claiming age, Medicare eligibility, the end of any pension bridge, and the age through which you want the plan to run. These dates divide retirement into phases. The years between paychecks and later income are often the most fragile, even when the long-term picture looks comfortable.

• Core spendingHousing, food, transportation, insurance, property tax, and recurring care that must be funded in most years; keep modeled income tax separate.
• Flexible spendingTravel, gifts, upgrades, and other expenses that could pause or shrink during a difficult market.
• One-time goalsA move, renovation, vehicle, family support, or other large expense that belongs in a specific year.

Planning takeaway

A plan becomes easier to understand when recurring needs and optional goals are modeled separately.

Map the income floor and the bridge

Next, place dependable income on the timeline. Social Security, pensions, and contractual annuity payments may cover part of spending before investments are touched. Keep rental income separate because vacancies and expenses can change it. The amount they cover is your spending floor. It is not the same as total income, because taxes, inflation treatment, survivor changes, and the reliability of each source still matter.

Subtract dependable after-tax income from spending in each year. The remaining amount is the portfolio's job. That gap may be largest before Social Security or Medicare begins, then narrow later. Seeing the gap by phase is more useful than applying one withdrawal percentage to every year of retirement.

• Before retirementSavings contributions and work income usually dominate.
• Bridge yearsPortfolio withdrawals may rise while earned income has stopped and benefits have not fully started.
• Later retirementSocial Security, pensions, RMDs, and changing spending can alter both cash flow and taxes.

Give every account a tax identity

Group assets by how withdrawals are generally taxed: taxable accounts, tax-deferred accounts such as traditional IRAs and 401(k)s, and potentially tax-free Roth accounts. Cash deserves its own line because it can fund near-term needs without market sales, but too much idle cash may lose purchasing power over a long retirement.

The mix matters as much as the total. Two households with the same balance can have different spendable resources and different room to manage taxes. A year-by-year model should estimate taxes, not treat every dollar of account balance as interchangeable. Tax rules are personal and change over time, so use this as planning context and confirm decisions with a qualified tax professional.

Planning takeaway

Account location creates options. It can affect taxes, Medicare premiums, RMDs, and how gracefully the plan handles a down market.

Test the plan, then choose your response

A base projection answers what happens if your assumptions occur. A retirement plan also needs to ask what happens if returns arrive in a worse order, inflation runs hotter, a large expense lands early, or one spouse lives much longer than expected. Monte Carlo modeling can explore many combinations, while targeted scenarios make specific risks easier to interpret.

Do not treat a modeled success score as a grade or guarantee. Use it to compare versions of the same plan under consistent assumptions. Then decide which levers are realistic: work a little longer, claim Social Security later, spend less in rough years, save more, change a one-time goal, or hold a larger near-term reserve. The best plan is not the one with the biggest ending balance. It is the one whose tradeoffs you understand and can live with.

• Review annuallyUpdate balances, spending, income estimates, and major life changes.
• Use guardrailsDefine in advance what would cause spending to pause, not just what markets might earn.
• Keep the model honestSeparate today's dollars from future dollars and document inflation and return assumptions.