Retirement Planning

There is no single percentage that fits everyone; it depends on when you retire, how much guaranteed income you have, and how much volatility your portfolio can absorb. We start with your annual spending, subtract Social Security, rent and other fixed income, and only the remaining gap has to come from investments; we then test that withdrawal against a range of market outcomes into your nineties. If the numbers fall short, the levers are retirement date, Social Security claiming age and spending in the early years of retirement.

For 2026 the employee deferral limit is $24,500, with an extra $8,000 catch-up at 50 and older, and a higher $11,250 catch-up for ages 60 through 63. Traditional contributions go in pre-tax and are taxed on withdrawal; Roth contributions go in after tax and come out tax-free if the rules are met. If your tax rate today is clearly higher than you expect in retirement, traditional usually wins; if your income is modest now, or your pre-tax balances are likely to force large withdrawals later, it makes sense to lean more toward Roth.

Required minimum distributions (RMDs) are the amounts the IRS requires you to withdraw each year from pre-tax accounts such as traditional IRAs and 401(k)s once you reach a set age. Under SECURE 2.0, that age is 73 for people born 1951 through 1959 and 75 for those born in 1960 or later; Roth IRAs have no RMDs during the owner’s lifetime. Large pre-tax balances can push RMDs plus Social Security into a higher bracket and raise Medicare premiums two years later, so the years between retirement and the first RMD are often a window for Roth conversions, moving money from traditional to Roth accounts and paying the tax now.

For anyone born in 1960 or later, full retirement age is 67; claiming at 62 permanently reduces the monthly benefit by about 30%, and each year you wait past 67 adds 8% until age 70. On benefit size alone, later is larger, but whether to wait depends on your health and whether other assets can cover spending in the meantime. For married couples, delaying the higher earner’s benefit also raises the survivor benefit, which often matters more than the break-even age.

Yes, and it matters which country each asset is in, what currency it is held in and where you plan to spend it. As a U.S. tax resident, rent, interest and gains on foreign assets must be reported to the IRS, and if you plan to spend retirement mostly abroad, both your tax residency and your health coverage will change. We include each asset at the after-tax amount and on the timeline you can actually use it, rather than simply adding up account balances.