Financial Planning Checklist: 10 Numbers You Need to Know for Retirement

Retirement planning can involve dozens of assumptions, accounts, income sources and financial decisions. But underneath all of that complexity are a handful of numbers that have an outsized impact on whether your retirement plan works.

Knowing these numbers is the starting point for building a meaningful retirement plan. More importantly, they should not be considered independently. Your retirement expenses affect the income you need. Your income affects how much you need to save. Your savings and investments affect how long your money may last. Pensions and government benefits affect how much needs to come from your portfolio. Taxes affect how much income you actually keep.

In other words, retirement planning is not about finding one magic number. It is about understanding how your numbers interact.

This financial planning checklist identifies 10 numbers you should know before making major retirement decisions.

Why These Retirement Numbers Matter

A retirement plan is essentially a financial model of your future. It takes what you know today and combines it with assumptions about what may happen later.

That means the quality of your plan depends heavily on the quality of the information you put into it.

For example, knowing that you have $1 million saved for retirement tells you something, but not nearly enough. Is $1 million enough if you spend $100,000 per year? What if you have a pension providing $40,000 per year? What if you retire at 55 instead of 65? What if your investments grow differently than expected? What if taxes are higher than expected? What if you live to 95?

The number itself is only part of the answer. The context around the number matters just as much.

If you have not already estimated your overall financial freedom target, start with How Much Money Do I Need to Retire? and How to Calculate Your Financial Freedom Number.

The 10 Numbers on Your Retirement Planning Checklist

1. Target retirement income
2. Current and future expenses
3. Total savings
4. Investment balances
5. Pension income
6. Debt and other obligations
7. Target retirement age
8. Real estate and housing value
9. Life expectancy
10. Expected government benefits and other reliable income

Let's look at each one and, more importantly, how it connects to the others.

1. Your Target Retirement Income

The first number to establish is how much income you want to have available during retirement.

This is sometimes expressed as an annual retirement income target, such as $60,000, $80,000 or $120,000 per year.

The important point is that this should be based on the lifestyle you actually want, rather than simply applying a generic percentage of your current salary.

Some people will spend considerably less after retiring because they no longer commute or contribute to retirement accounts. Others may spend more because they have more time for travel, hobbies, entertainment and other activities.

Your target income also may not remain constant. Spending can change throughout retirement. Early retirement may involve more travel and activities, while later retirement may involve less discretionary spending and potentially higher healthcare or support costs.

Your target income is therefore a starting point, not a permanent number.

2. Your Current and Future Expenses

Income is only half of the equation. You also need to understand where your money will go.

Create a realistic estimate of your annual expenses and separate essential expenses from discretionary spending where possible.

Consider housing, food, transportation, insurance, utilities, healthcare, travel, entertainment, property taxes, maintenance and other recurring costs.

You should also think about expenses that may occur only occasionally. A new vehicle, home renovation, major trip or financial gift to a family member can have a significant impact on a retirement plan even if it does not appear in your normal monthly budget.

Your expenses are particularly important because they determine how much income your retirement assets need to produce.

For a broader look at creating your financial plan, see How to Create a Financial Freedom Plan.

3. Your Total Savings

How much have you already accumulated?

This includes money held for retirement as well as other savings that may be available to support your financial goals.

Your savings may include cash, savings accounts, retirement accounts, investment accounts and other financial assets.

But simply adding everything together can sometimes create a misleading picture. Different accounts can have different tax treatment, withdrawal rules and investment characteristics.

Two households with exactly $750,000 in savings may have very different retirement prospects depending on where that money is held and how it is invested.

This is why your total savings number needs to be analyzed alongside your investment balances, expected returns, taxes and retirement income.

4. Your Investment Balances

Your investment portfolio is one of the most important numbers in your retirement plan.

Record the current balance of each significant investment account and understand what type of account it is.

Depending on where you live, this might include accounts such as a 401(k), traditional IRA, Roth IRA, RRSP, TFSA, non-registered investment account or other investment assets.

The investment balance tells you where you are today. It does not tell you exactly where you will be in the future.

Future value depends on contributions, withdrawals, investment returns, inflation and the timing of those transactions.

This is one reason a retirement projection is more useful than looking at your current portfolio balance in isolation.

5. Your Pension Income

If you have a pension, determine how much income it is expected to provide and when that income can begin.

This can include employer-sponsored defined benefit pensions, government pensions and other reliable lifetime income sources.

Pension income can dramatically change the amount of investment savings you need.

For example, someone expecting $50,000 of reliable annual pension income may need significantly less portfolio income than someone with the same expenses but no pension.

You should also understand whether pension income increases with inflation, whether there are survivor benefits and how the amount changes depending on when you begin receiving it.

Pension decisions are therefore not simply about the monthly amount. Timing and structure matter too.

6. Your Debt and Other Financial Obligations

Debt is one of the most important numbers that can be overlooked in retirement planning.

Record your mortgage balance, credit lines, loans, vehicle financing and other significant debts.

Then consider the interest rate, monthly payment and expected payoff date.

A household with $1 million in investments and a $400,000 mortgage is in a different financial position from a household with $1 million in investments and no debt.

Debt also affects cash flow. A retirement plan may look comfortable once a mortgage is paid off but much tighter if the mortgage continues for another decade.

Your financial planning checklist should therefore include both assets and obligations.

7. Your Target Retirement Age

When you retire can be almost as important as how much you have saved.

Retiring at 55 rather than 65 can mean ten additional years without employment income and ten additional years during which your retirement assets may need to support you.

On the other hand, working longer may provide additional contributions, additional investment growth and more time to qualify for or increase certain retirement benefits.

Retirement age can also affect pensions and government benefits.

That means retirement age should never be evaluated separately from your savings and income.

If you are trying to determine how much you need before stopping work, the retirement age assumption is a critical part of the calculation.

8. Your Real Estate and Housing Value

Your home can be one of your largest assets, but its role in retirement planning is often misunderstood.

Start with the current value of your home and subtract any mortgage or other debt secured against it.

Then consider what you actually plan to do with the property.

Will you remain in the home throughout retirement? Downsize? Move to a less expensive area? Sell the property and rent? Keep another property as a rental?

A home can provide financial security without necessarily generating retirement income. Alternatively, a downsizing decision can potentially release a significant amount of capital.

Housing costs should therefore be included in your retirement projection rather than treating your home simply as a net worth number.

9. Your Life Expectancy

Nobody knows exactly how long they will live. That uncertainty is one of the fundamental challenges of retirement planning.

Nevertheless, your plan needs an assumed planning horizon.

If you retire at 60 and plan only to age 80, you are planning for approximately 20 years of retirement. If you plan to age 95, you are planning for 35 years.

That difference can materially change the amount of money you need.

A good retirement plan should also allow you to test longer lifespans rather than assuming that your expected lifespan is a certainty.

Longevity is one of the reasons retirement planning should focus on sustainability rather than simply asking whether you have enough money on your retirement date.

10. Your Expected Government Benefits and Other Reliable Income

Your final number is the amount of income you expect from government programs and other reliable sources.

Depending on your country and circumstances, this may include Social Security in the United States or programs such as CPP and OAS in Canada.

The amount and timing of these benefits can affect how much income must come from your investments.

The timing decision can also matter. Starting a benefit earlier may provide income sooner, while delaying certain benefits can increase the amount received later.

These benefits should therefore be included as part of the overall retirement-income picture rather than treated as an afterthought.

The Numbers Are More Valuable Together

The biggest mistake you can make with a retirement planning checklist is to treat each number as an isolated fact.

Consider a simple example.

Suppose someone has:

• $1 million in investments
• $60,000 in annual retirement expenses
• $30,000 in pension income
• $20,000 in expected government benefits
• $200,000 remaining on a mortgage
• A planned retirement age of 60

Looking only at the $1 million investment balance does not tell you whether retirement is affordable.

Once the numbers are combined, however, a much clearer picture emerges.

The $50,000 of expected pension and government income reduces the amount that must come from investments. The $60,000 expense target determines the size of the income gap. The mortgage affects expenses and cash flow. The retirement age determines how long the portfolio must potentially support the household.

Change any one of those assumptions and the answer can change.

Why Retirement Calculators Need More Than One Number

This is why a meaningful retirement calculator needs more than a single savings balance and a withdrawal rate.

A useful retirement projection considers the relationships between income, spending, assets, taxes, housing, pensions, government benefits, investment growth, inflation, retirement timing and longevity.

For example, a $1 million portfolio could produce very different results depending on whether it is supporting $40,000 or $100,000 of annual spending.

Similarly, retiring at 55 rather than 70 can significantly change the result even if the portfolio balance is identical.

This is why you should be cautious about any retirement calculation that asks for only a few inputs and presents a highly precise answer.

How Retirementize Brings Your Retirement Numbers Together

Retirementize is designed around the idea that retirement planning works best when the important numbers are considered together.

Instead of looking at your savings balance in isolation, you can build a broader retirement plan that includes your income, spending, investment accounts, pensions, government benefits, housing and other important financial information.

You can use Retirementize to examine how your financial picture changes over time and see how different assumptions affect the projected outcome.

For example, you can consider:

• When you want to retire
• How much you want to spend
• How your investments may grow
• When pensions begin
• When government benefits begin
• How taxes affect retirement income
• How your home fits into the plan
• How changing assumptions affects your projected results

Retirementize can also help you move beyond a static retirement calculation by allowing you to test different decisions and scenarios.

That matters because the goal of retirement planning is not to predict exactly what will happen decades from now. The goal is to understand what could happen under different reasonable assumptions and identify decisions that may improve your position.

Use the Checklist to Build Your Retirement Plan

Once you have collected the 10 numbers, the next step is to put them into a complete financial plan.

Start with your current situation. Then make reasonable assumptions about future investment growth, inflation, spending and income.

Next, see whether your projected income is sufficient to support your spending throughout retirement.

If the result is not what you want, you have several potential levers to consider.

• Save more
• Retire later
• Reduce spending
• Change investment assumptions or strategy
• Adjust the timing of retirement income
• Consider housing changes
• Explore different withdrawal strategies
• Review your tax situation

This is where retirement planning becomes useful. Instead of simply discovering that your plan may not work, you can investigate what changes might improve it.

Do Not Forget Taxes

One of the most important numbers in retirement planning is often not a single number at all: taxes.

The amount of income you receive is not necessarily the amount you have available to spend.

Tax treatment can differ significantly between different types of retirement and investment accounts. The same gross income can produce different after-tax results depending on where it comes from and when it is withdrawn.

This is particularly important when deciding how to draw income from multiple accounts.

For more information, read How Taxes Affect Your Retirement Plan.

Do Not Rely on the 4% Rule Alone

The 4% rule can be a useful starting point for understanding portfolio withdrawals, but it should not replace a complete retirement plan.

Your actual situation may include pensions, government benefits, taxes, changing spending, different investment accounts, housing decisions and other factors that a simple percentage cannot capture.

The 4% Rule for Retirement can help explain the concept, but your own retirement plan should go beyond a single withdrawal percentage.

Your Retirement Plan Should Be Tested

Once your numbers are entered, do not simply accept the first projection you see.

Test it.

What happens if you retire five years earlier? What happens if investment returns are lower? What if inflation remains elevated? What if you live longer than expected? What if you spend more during the first decade of retirement? What if you downsize your home?

These questions can reveal weaknesses in a plan that looks perfectly reasonable under a single set of assumptions.

Our article How Do I Know If My Retirement Plan Is on Track? explores this idea in more detail.

PLAN. IMPROVE. TEST. CONFIRM. REPEAT.

Retirement planning is not something you do once and forget about.

A better approach is:

1. PLAN. Gather your numbers and build a realistic retirement plan.
2. IMPROVE. Look for opportunities to strengthen your income, savings, taxes and spending strategy.
3. TEST. Explore different retirement ages, spending levels, investment returns and other scenarios.
4. CONFIRM. Determine whether the plan appears capable of supporting the lifestyle you want.
5. REPEAT. Update the plan as your circumstances and assumptions change.

This process is much more useful than searching for one perfect retirement number.

Your Retirement Planning Checklist

Before making a major retirement decision, make sure you have considered these 10 numbers:

1. Target retirement income
2. Current and future expenses
3. Total savings
4. Investment balances
5. Pension income
6. Debt and financial obligations
7. Target retirement age
8. Real estate and housing value
9. Life expectancy
10. Government benefits and other reliable income

But do not stop at collecting the numbers. The real value comes from putting them together and seeing how they interact.

If you want to explore the mechanics of retirement income and portfolio requirements, read How Much Money Do I Need to Retire?.

Fun Facts About Retirement Planning

Continue the Financial Freedom Series

This article is part of Retirementize's financial freedom and retirement planning series.

If you are building your retirement plan from the beginning, continue with the 4% rule for retirement and explore how taxes can affect your results with How Taxes Affect Your Retirement Plan.

You can also explore How to Monitor Your Retirement Plan as you move from creating your plan to maintaining it over time.

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