Retirement Planning Considerations Part 1: Cash Flows

Ken Weingarten |

Planning for retirement is a complex process. There are various factors to consider to confidently answer the simple question, “Do I have enough to retire?”. The factors that go into answering this question will be different from person to person, however there are some overarching factors that everyone will need to consider. Over the course of the next 4-part blog series, we will provide guidelines of four major planning areas for you to consider when thinking about retirement.

Cash Flow Considerations

  • Current vs Future Expenses: It is likely that you will see some significant changes in your expenses once retired (e.g. reduced transportation costs, increased travel, home improvement projects). It is highly recommended that you develop an estimate budget of what retirement expenses will look like.
  • Pension & Other Retirement Income:
    • Do you have a pension? Understanding what type of payout estimate options (i.e. Single Life Annuity, Joint & Survivor, Lump Sum) your pension offers can help with coordinating your other sources of income to fund retirement.
    • Will you work part-time? Some retirees may want to continue working, albeit at a reduced level. Estimating how much you anticipate to earn can help with cash flow planning.
  • Social Security: Scenario planning in this area should be carefully analyzed as filing for Social Security is a permanent, irreversible decision.
    • If you are married, there are Social Security filing strategies to consider (i.e. which spouse files early and which spouse delays filing for a greater benefit).
    • If you are retiring early, does filing for Social Security early make sense as you will receive reduced benefits?
    • If you are working and receiving Social Security benefits, your benefits may be reduced based on how much you make.
    • If you are divorced from a marriage that lasted over 10 year AND have not remarried, you may be eligible for benefits under your ex-spouse’s earnings record.
  • Retiring Early: If you have a 401(k), leaving it where it is may make sense instead of rolling it over into an IRA. 401(k)s allow individual to take penalty-free distribution at age 55+ (and must separate from service entirely), whereas IRAs allow for penalty-free distributions after age 59 ½. Drawing down from this account, if needed, can possibly fund your retirement until you begin Social Security, pensions, IRA distributions, etc.

Everything considered, there are other unique aspects to consider for each individual. Longevity and health history may affect some planning decisions.

In Part 2, we will go over guidelines to consider for Health Insurance expenses.


Weingarten Associates is an independent, fee-only Registered Investment Advisor in Lawrenceville, New Jersey serving Princeton, NJ as well as the Greater Mercer County/Bucks County region. We make a difference in the lives of our clients by providing them with exceptional financial planning, investment management, and tax advice.