Written by Diane di Costanzo
Published Jun 16 | 12 minute read
When it comes to planning for an entirely new phase of life—ahem, retirement—many people lack confidence about what they’ll do, what they’ll need and whether their finances will support the life they envision.
Add in several unknowable factors like market volatility and the cost of healthcare, and it’s no wonder those heading for retirement can feel overwhelmed.
I was one of those less-than-confident people. Along with my financial concerns, I also worried that I’d lose my identity, having been a writer and editor for nearly 45 years. Who would I be without my title and credentials? What would I do with my time? And most troubling of all: Did I save enough to retire?
That was two years ago. The best advice I received during that time was to devise a strategy that aligned with my goals, my concerns and my finances. I’ll add this: It’s not about striving for perfection—just the confidence that can come from thoughtful planning and periodic check-ins.
Here is a practical, step-by-step guide to help you get started.
First, give yourself permission to dream a little. That means defining the lifestyle you want in retirement.
When do you want to retire? Do you want to stay in your current home or move elsewhere? What do you want to do with your time?
Answering these questions helps clarify what “retirement ready” actually looks like—not just financially, but personally. From there, you can assess how close you are to that vision and what steps you may need to take to get there.
Another helpful strategy is to sort your priorities into “must-haves” versus “nice-to-haves.” This becomes especially useful when you begin mapping your financial plan to your lifestyle goals.
“Figuring out what you want to retire ‘to’ as well as what you want to retire ‘from’ is critically important to make your retirement the best it can be,” says Richard Eisenberg, co-host of the Friends Talk Money podcast. “And keep in mind that the answer will likely change both as retirement nears and in retirement.”
Indeed, the 20- to 30-some years of a classic retirement are sometimes sorted into the go-go, slow-go and no-go years, each one marked by different motivations, needs and costs.
In other words, don’t sweat the finer points of the more-distant phases—just enjoy the journey.
If you don’t have one already, draft a baseline monthly budget, including housing, food, utilities and transportation.
Consider how your post-career life might shift your spending. For instance, I spent about $300 each month commuting, which became a savings in retirement. But my monthly utilities increased by about $50 because I was home more often.
Beyond the basics, be sure to account for commonly overlooked expenses that can significantly affect your budget.
Healthcare is one of the most commonly underestimated retirement expenses.
Even with Medicare, you’ll need to budget for premiums, out-of-pocket costs and services not fully covered—like dental, vision and hearing care. A good rule of thumb is to build in a buffer for rising healthcare costs over time.
If you’re approaching age 65, it’s also important to understand how Medicare works. Coverage is divided into different parts—hospital (Part A), medical (Part B) and prescription drugs (Part D)—along with additional options like Medicare Advantage plans (Part C) and Medigap supplemental coverage.
Timing matters, too. Your initial enrollment window typically begins three months before your 65th birthday and extends three months after. Missing deadlines can result in higher premiums later.
Because plan options, coverage and costs can vary widely, review your choices carefully—even if you’re still a few years away from enrolling.
One cost-related detail that often surprises new retirees: Medicare premiums are based on your income from two years prior. That means your first-year costs may be higher than expected, though you may be able to appeal if your income has significantly changed.
Owning a home in retirement means planning for ongoing maintenance—and occasional large expenses such as roof replacements, HVAC systems, appliances or surprise repairs.
Synchrony’s recent Lifetime of Home Care study found that homeowners can expect to spend more than $339,000 on home maintenance over their lifetimes, or more than $7,000 annually. Emergency repairs alone can quickly drain a budget. About 40% of homeowners surveyed said they had to cover an unexpected incident costing more than $3,000.
Car care can also be underestimated. According to Synchrony’s Cost of Car Ownership survey, car owners estimate spending just under $3,000 annually, while actual costs are more than $7,000. Gas and insurance are the largest expenses, followed by service and repairs.
I learned all this the hard way. In my first year of retirement, I had to replace a refrigerator ($1,200) and my car’s transmission ($7,000)—expenses that felt very different without a steady paycheck.
Many retirees plan to support children, grandchildren or charitable causes. Whether through gifts, tuition assistance or donations, these expenses should be intentionally built into your plan.
Be sure to include the things that make life enjoyable: travel, hobbies, dining, entertainment and time with family. Retirement isn’t only about covering essentials—it’s about supporting the life you want to live.
An emergency fund covering three to six months of essential expenses is critical without employment income to rely on.
You’ll also want to pressure-test your budget against inflation. Even modest inflation (around 2%–3% annually) can significantly impact your purchasing power over a long retirement.
READ MORE: How Much You Should Save for Retirement at Every Age
With the expense side of your plan outlined, the next step is to map out your income sources.
Start by reviewing your estimated benefits through the Social Security Administration (SSA). When you choose to claim benefits has a lasting impact:
Delaying benefits can significantly increase your monthly income—especially valuable if you expect to live a longer retirement.
READ MORE: How to Open Your Social Security Account in 5 Steps
Include income from tax-advantaged accounts such as:
Keep in mind:
READ MORE: What Are Required Minimum Distributions?
You may also have income from:
Note that withdrawals from taxable accounts may trigger capital gains taxes, depending on your profits.
Understanding how these income streams work together—and how they’re taxed—can help you identify gaps or confirm you have a solid foundation to build on.
Your reward for starting this process before you retire? You’ve bought yourself the gift of time, which you can use to help bridge any gaps between your estimated expenses and your estimated income in retirement.
Here are key strategies to consider:
If you’re still working, one of the most effective ways to close a gap is to increase how much you’re saving.
Even small increases can make a meaningful difference over time. If you’re concerned about reducing your take-home pay, try gradually increasing contributions by 1% at a time, for example, to see what feels manageable.
Once you turn 50, you may be eligible to contribute more to certain retirement accounts.
These higher limits can help accelerate your savings in the years leading up to retirement.
If your employer offers a 401(k) match, make sure you’re contributing enough to receive the full amount. Otherwise, you’re effectively leaving part of your compensation on the table.
An HSA is a related option to consider. It’s available to those with qualifying health insurance plans. Pre-tax contributions are deducted from your paycheck, lowering your taxable income, and any withdrawals from the account are tax-free—provided they’re used to pay for qualifying medical expenses.
You don’t have to use all of your funds in the account each year, and you can choose to invest the funds you contribute, potentially growing the account over the years—tax-free.
Once you’ve set your savings goal, automate your savings—increasing your savings target every year, if possible. Even a modest bump each year is a step toward helping your future self. (Curious about how your retirement savings track against those of the average American at various ages? Learn more here.)
You might also consider taking on some kind of paid work after you retire. If you do, you wouldn’t be alone: According to Transamerica Institute’s Annual Retirement Survey, more than half (54%) of today’s workers plan to continue working in retirement, essentially redefining what it means to retire.
“Starting a new chapter in retirement can bring continued income while exploring new possibilities,” says Catherine Collinson, CEO and president of the nonprofit Transamerica Institute and its Transamerica Center for Retirement Studies. “And there are people who retire and then unretire, so while retiring is a big decision, there are still opportunities to jump back in.”
Finally, use your pre-retirement period to whittle down debt, taking care to prioritize the highest-interest debt first.
Here’s why: Lower-interest debt costs you less over the lifetime of the loan. For more tips on living debt free, review this checklist.
Earlier in your career, you may have taken a “set it and forget it” approach to retirement savings. That mindset can help cushion the shocks of the economy’s inevitable ups and downs over time.
But as retirement approaches, it’s worth revisiting your strategy.
Typically, investors shift toward a more conservative approach in the years leading up to retirement as their risk tolerance—the amount of money they’re willing to risk in pursuit of bigger gains—declines.
This may include diversifying your portfolio and allocating more funds to lower-risk options, such as high yield savings accounts and certificates of deposit (CDs).
For those prioritizing stability, certain retirement-focused products may offer more predictable returns.
“Many consumers have an IRA—the responsible thing for them to do is to consider the return on that money,” says Pierre Habis, general manager and head of Synchrony Bank. “IRA CDs provide tax-advantaged growth secured by FDIC insurance. If that fits someone’s goals, they may be worth considering.”
One helpful construct is what’s called the retirement “bucket” approach, calibrated to your specific risk tolerance. Those buckets include:
READ MORE: How to Use the Retirement Bucket Strategy to Manage Income
How will you pay yourself in retirement?
A withdrawal strategy helps answer that question—and is essentially a sustainable and tax-efficient way to provide you with an income from your assets for as long as your retirement should last.
A standard rule of thumb has been an annual withdrawal that does not exceed 4% of your total savings at the time of your retirement. But like most financial “rules,” a more personal and flexible strategy will probably serve you better.
Start with your monthly budget and consider setting up a “paycheck” system with regular transfers into your checking account to manage spending.
When deciding where to withdraw from, keep these key considerations in mind:
This step is about preparing for the unexpected—reviewing key legal, health and financial considerations that could impact your retirement.
This complicated topic is at the top of the list because it has both financial and emotional impacts.
The big-picture issue is where and how you want to live if you—and your partner if you have one—can’t live without support.
Options include:
READ MORE: Is Long-Term Care Insurance Worth it?
Think of this as a gift to the people you love who will remain when you’re gone—your spouse, partner, family and friends. Making your preferences and wishes known means you spare them some of the hassle and heartache at the time of your incapacitation or passing.
Equally important: Make sure they have, or will have, access to the documents that capture your decisions, including:
Also review and update beneficiary designations across all accounts.
In America, an estimated $12.5 billion was lost to scammers in 2024. And according to the Federal Trade Commission (FTC), seniors reported losing the most money—sometimes their entire life savings.
Simply knowing fraudsters’ increasingly sophisticated ploys will help you avoid these traps. The FTC offers useful advice, as well information about how to report scams.
READ MORE: How to Protect Yourself From AI Fraud and Scams in Banking
This is a lot to manage—but you don’t have to do it all at once.
A retirement dashboard can help you stay organized. Think of it as a living document where you track your progress across these steps.
You should review it quarterly—or at least annually—to monitor:
Even creating your dashboard is a meaningful first step. From there, tackling just a few action items each month can help you stay on track and build confidence over time.
Retirement planning doesn’t happen all at once. And it doesn’t have to. By defining your goals, understanding your spending, mapping your income and building a strategy around saving withdrawals, you can create a plan that supports both your needs and your future.
Looking for ways to strengthen your retirement plan? Explore Synchrony products like IRA CDs and other savings tools that can help support long-term growth.
READ MORE: What is an IRA CD?
Diane di Costanzo has written about personal finance, real estate, travel, tennis and health for The Wall Street Journal, Vogue, Health, Connecticut Cottages & Gardens and the United States Tennis Association. She teaches a graduate-level media course at New York University and was formerly a chief content officer at People Inc.