How to translate lifestyle goals into a practical spending plan
Retirement planning isn’t only about account balances; it’s also about aligning your resources with the life you hope to lead. Many retirees envision travel, hobbies, family experiences, or personal development. Turning those ideas into a workable plan requires thoughtful budgeting, realistic cost assumptions, and coordination with your broader retirement strategy.
At Concentric Wealth Management, we help clients evaluate these choices and build plans tailored to their goals, risk tolerance, and tax situation.
1. Clarify Your Priorities
Start by identifying the experiences that matter most to you.
- Travel: Annual international trips, periodic road travel, or family gatherings.
- Lifestyle: Right-sizing your home, considering a second property, or investing time and resources in activities such as boating or golf.
- Personal Growth: Courses, volunteer work, or starting a small business.
Putting these items in order helps allocate resources intentionally.
2. Estimate Realistic Costs
Create ballpark figures so your spending plan reflects how you’ll actually live. Costs vary widely by location, timing, and preferences, and they change over time.
- Travel (illustrative only): A two-person European trip might total $8,000–$12,000, while a domestic road-trip budget could average $3,000 for the year.
- Hobbies: Memberships, equipment, lessons, and ongoing fees can add up over time.
- Big-ticket items: An RV or vacation condo involves upfront costs plus maintenance, taxes, insurance, and utilities.
Planning tip: Incorporate inflation. Travel, leisure, and healthcare can rise faster than broad inflation. Revisit assumptions regularly to keep your plan current.
3. Coordinate with Your Retirement Income Plan
Lifestyle spending should be balanced against essential expenses (housing, healthcare, insurance, taxes, and daily living). Map bucket-list outlays to your income sources:
- Social Security benefits (see calculators at SSA.gov)
- Pensions or annuity payments (if applicable)
- 401(k), IRA, and Roth accounts
- Taxable investment accounts and other savings
A resilient plan typically blends predictable income sources with flexible withdrawals. (Annuity guarantees are subject to the claims-paying ability of the issuing insurer and may include fees and restrictions.)
4. Be Intentional with Withdrawals
How you draw from accounts can materially affect taxes and portfolio longevity. The right approach depends on your situation.
- Tax-aware withdrawals: Coordinate taxable, tax-deferred, and tax-free accounts to manage brackets, capital gains, Net Investment Income Tax, and potential Medicare IRMAA impacts.
- RMDs: Know your Required Minimum Distribution rules and timing to avoid penalties while meeting cash-flow needs.
- Sequencing: Decide which accounts to use—and when—for discretionary items so core spending stays on track.
Visual idea: A simple flow graphic showing example withdrawal ordering (taxable to tax-deferred to Roth) with a note that actual sequencing varies by goals, markets, and taxes.
5. Plan for the Unexpected
Build flexibility so surprises don’t derail long-term goals.
- Liquidity: Maintain an emergency reserve appropriate for healthcare, home, or family needs.
- Risk transfer: Evaluate travel insurance and other coverages where appropriate.
- Contingency line: Set aside a modest annual amount for spontaneous opportunities or cost overruns.
6. Keep It Integrated and Updated
Your bucket-list plan should sit within a broader financial framework. Our team at Concentric Wealth Management helps clients:
- Prioritize and cost out goal-based experiences.
- Align savings, investments, and withdrawal rules with lifestyle objectives.
- Incorporate tax-aware strategies and legacy/charitable considerations.
- Review and adjust over time as markets, expenses, and priorities evolve.
Final Thoughts & Call to Action
Retirement lifestyle planning works best when it’s intentional, realistic, and adaptable.
If you’d like help evaluating your existing financial plan, connect with a Concentric Wealth Management advisor.