What Is The First Step In Retirement Planning?
Your How To Guide In Planning for Retirement
You’ve had enough of the worry and the wondering about being able to retire. Those long, tiresome weeks of work have finally caught up to you, and you’re done. You start thinking, what if I could retire in 10 years? You’ve been saving consistently. You feel like you make decent money. But now you’re ready to connect the dots and actually make this happen.
If that sounds like you and what you experience at the end of each week, this post is for you. And I want you to know something before we dive in: there is a level of participation in this retirement journey that most people never tap into. You don’t have to sit on the sidelines watching your retirement balance slowly creep upward and hoping the market does the heavy lifting. You can actively change what you believe is the outcome right now.
Let’s talk about where to begin.
The Mistake Almost Everyone Makes
When people finally get serious about retirement, they usually do the same thing: they start asking around. They talk to coworkers. They call a friend who seems to have their act together. They ask a family member what they did. Or they head right to a financial planner without any information.
And while that’s not a bad instinct, all of those situations skip the one question that actually needs to be answered first.
That question is: how much do I need to retire?
Not how much should I be saving. Not what percentage should go into my 401(k). Not what does my coworker do. The first question is what is my retirement number? The actual savings number you need to retire comfortably. Everything else builds from there.
How to Calculate Your Retirement Number
Here’s where most people go wrong: they plug their information into a generic online retirement calculator, get a number, and move on. The problem is that generic calculators are built on averages, and your retirement is not average. It’s yours.
Instead, use your own numbers. Here’s the formula:
Start with how much you need each month in retirement. If you’re 10 to 15 years out, this may not be crystal clear yet, so use your current monthly expenses as your baseline.
Be sure to include annual expenses that don’t come every month (car registration, vacations, holiday spending, etc.). Add those in and divide by 12 to get your true monthly number.
Then use the Rule of 25: (Monthly expenses × 12) × 25 = your retirement number.
This gives you a real, personalized target. Not a guess. Not an average. Your number.
Then Find Your Gap
Once you have your retirement number, the next step is to find out how much your current retirement savings will actually be worth by the time you retire. For this, head to investor.gov and use the compound interest calculator. Plug in your current balance, your regular contributions, an estimated rate of return, and the number of years until you retire.
Take that estimated future balance and subtract it from your retirement number. What’s left is your gap. The amount you still need to “save” in some form before you can retire.
Now, I want you to look at that gap number without panic. Because here’s what most people don’t realize: saving more isn’t the only way to close it.
The Three Progress Levers That Actually Close the Gap
One of the biggest myths in retirement planning is that saving more is the only path forward. That belief leaves most people on a passive road, watching their balance grow and hoping it’s enough. But there are actually three elements embedded in the retirement formula that each represent an area where you can take action:
Savings. Yes, this matters. Contributing consistently is key. But it’s one lever, not the only one.
Debt. If you can enter retirement debt-free, or close to it, you dramatically reduce how much money you need each month. That shrinks your retirement number and closes the gap.
Expenses. This isn’t about cutting everything you love. It’s about getting clear. Has the monthly number you used actually been verified over several months, or did you estimate? You may have estimated high or low. It’s also worth asking: what expenses will I not have in retirement? What will drop significantly? We hear a lot about the expenses that go up in retirement, but there are absolutely expenses that will disappear or shrink. I found this on my own journey, and it changed how I thought about the whole picture.
What I love about this framework is that it gives you an active role. Instead of just watching a number and hoping, you can focus on one area at a time and make real progress.
What My 13 Year Retirement Journey Taught Me
I’ve spent 13 years on a focused retirement journey for 13 years, something I’ve shared in a couple of podcast episodes, and I want to tell you what I wish someone had told me at the very beginning.
I was saving. I felt like I was doing the right things. But at some point, I started asking myself: what else can I do? That’s when I started seeing these three levers clearly, even if I didn’t have that exact language for them yet.
I began working on one focus area at a time. I spent time reviewing my expenses for accuracy, clarity, and understanding. I asked myself: Do I like this expense? Could I do it another way, maybe cheaper? Does this expense support my goal of retiring?
I spent time really dialing into each expense and aiming to pay off debt. Both helped me see that I could lower the demand on my money, which in turn lowered my need for how much money I needed in retirement.
But the biggest thing I wish I had known earlier? How much my relationship with my money and knowing exactly where my dollars were going would have the biggest influence and create a smooth transition into retirement. Getting to know my numbers intimately helped me see retirement from a personal finance side. It made everything more real, more specific, and more achievable.
Your First Step (Today, Not Someday)
If you are serious and ready to do the work, here is where you start: get clear on where your money is going every month, very clear. Then use that monthly expense amount to define your retirement number. That is your best and clearest starting point. Not a calculator that doesn’t know you. Not advice from a coworker. Your numbers, your life, your plan.
From there, find your gap. Then look at the three levers and start working on one focus area at a time.
You don’t have to have it all figured out today. But you can absolutely start today. That starting point is knowing your number, understanding your gap, and seeing how to affect progress using the programs, and that changes this from something that’s happening to you into something you’re building on purpose.
If you want help with your first step, book a Retirement Accelerator call today.
Give me 30 minutes, and I’ll help you:
✓ Know how much you need to save for retirement, and if you’re on track
✓ Identify which retirement progress lever has the greatest opportunity to accelerate your results
✓ Learn how to save up to $11,000 in the next 90 days for retirement
✓ How to retire without giving up your lifestyle
Most people aren’t falling behind because they aren’t doing enough. They’re falling behind because they don’t know where to focus.
It’s time to stop guessing and start making intentional progress toward retirement.
