How to Set and Achieve Retirement Goals for the Future

Summary: Clear retirement goals can turn uncertainty into confidence. This guide covers practical steps to set, refine, and help you achieve your retirement goals, enabling you to retire on your own terms.

Many people worry about saving enough for retirement — but fewer take the time to define what they’re saving for. Without a clear vision and a plan to support it, even diligent savers can fall short.

Your retirement goals should be more than just hitting a savings target or checking a financial box. They’re about defining the life you want in the next chapter and creating a strategy to make that life sustainable.

Define what a fulfilling retirement looks like

Start by answering a few big-picture questions. What do you actually want your retirement to include? What does a fulfilling day or week look like when work is no longer part of the equation?

Some people dream of extensive travel, while others want to stay close to home, spend more time with family, or finally focus on hobbies they’ve neglected. There are those who want to keep working after retirement. For others, the primary goal is financial independence and comfortably aging at home. The best retirement plans address all the things that are important to you.

Many Americans legitimately fear outliving their retirement funds; however, the aim is more than simply preventing financial ruin. The focus should be on setting realistic retirement goals that fit your finances and lifestyle. It’s important to define what a meaningful retirement looks like to you. Your goals will shape your spending needs, your timeline, and the strategies you’ll need to support them.

Be specific about your goals: Do you want to own a second home? Relocate? Start a small business or fund a child’s graduate school? The more clarity you have about what you want, the more accurate your plan will be.

Estimate your retirement expenses realistically

One of the biggest mistakes people make when planning for retirement is underestimating just how much it will cost. It’s a myth that you’ll need drastically less money once you stop working. While some expenses may go down, like commuting or dry cleaning, others often go up, particularly in areas like healthcare and leisure. To give you an idea, the most recent U.S. Bureau of Labor Statistics (BLS) data suggests that the average retiree spends around $60,000 per year, so around $5,000 per month.¹

You’ll also have more time to spend money. Think about things that you might want to do more of when you retire, like dining out, traveling with family or to see grandchildren, increased holiday budgets, home upgrades, classes or entertainment.

Other factors to consider are:

• Basic living expenses like housing, food, and transportation
• Health care costs, including premiums, out-of-pocket expenses, and long-term care
• Travel, hobbies, and other discretionary spending
• Inflation and cost-of-living increases over time

Don’t forget to account for your mortgage and any future relocation costs in your estimates. Your retirement budget should cover needs and wants, and account for changing spending habits.

Understand your income sources

Once you have a sense of how much you’ll need, the next step in planning for retirement is mapping out where the money will come from and when.

For most people, retirement income comes from a combination of sources. Social Security is one piece of the puzzle, but it’s unlikely to cover everything. You may have a pension, personal savings, investments, rental income, or annuities. Some people plan to earn money in retirement through part-time work or consulting.

Importantly, not all income begins at the same time. You might retire before claiming Social Security. Your 401(k) withdrawals may begin at 59.5 or even 55 in some cases. The age for starting required minimum distributions (RMDs) may be 73. Knowing your income schedule prevents money problems and helps with withdrawal planning.

Work with projected figures and realistic assumptions, especially for market returns. Keep your plans flexible to allow for unexpected events and adjustments. Creating an income plan in retirement is much different and more dynamic than a savings plan. A financial professional can help you identify and organize all your income sources and then create a strategy to help map out withdrawal sources and timing to create your retirement “paycheck.”

Identify any gaps in your plan

When you compare your estimated expenses to your projected income, you might discover a gap. That’s not uncommon even in the best retirement plans, and it’s not a sign of failure. It’s simply the point where strategy becomes necessary. Now sure how to close the gap? A financial professional can help you explore your options.

You have options, like boosting savings in the years before retirement, or even delaying retirement by a few years. You could also downsize or move to lower your living expenses. And if you’re open to working part time, even modest income can help close the gap.

The key is not to ignore the problem. Shortfalls are much easier to fix when you still have time and flexibility. Waiting until retirement is near or already underway limits your ability to adjust.

Keep your retirement plan flexible

Retirement planning isn’t something you do once and forget. It’s a living strategy that should evolve with your life, your family, your health, and the broader economy.

Unexpected medical bills (prescriptions, dental, vision, long-term care) can be substantial. You may also find that Medicare doesn’t cover everything, or that your investments might not perform as well as you expected in the early years. There are so many potential variables, and that’s why your plan needs room to breathe.

Prioritize liquidity where possible by maintaining cash reserves or short-term assets that can be tapped without disrupting your long-term strategy. Be realistic about what you can cut from your budget during a downturn and how long your assets need to last. If you’re planning as a couple, it’s wise to consider how things might change if one partner passes away first—such as shifts in household income or expenses—so you can be prepared for whatever the future holds.

Consider taxes and withdrawal sequencing

How you withdraw money in retirement can be just as important as how much you’ve saved. Taking funds from the wrong accounts in the wrong order can trigger avoidable taxes and cause your savings to run out faster than anticipated.

A withdrawal strategy that coordinates income from your tax-deferred, Roth, and taxable accounts can help you manage taxes and help your money last longer. A financial advisor can help you determine if savvy moves, like converting traditional IRA assets to Roth accounts before required minimum distributions kick in, are a suitable strategy based on your situation.

Also, factor in how your income affects things like Medicare premiums, tax on Social Security benefits, and estate implications. These things can all add up, and if you’re unsure where to start, this is an area where a financial professional can offer real value.

How to retire comfortably

Plan your future, budget for it, and make smart financial decisions. Don’t just focus on one savings number; create a flexible plan that works with your lifestyle, manages risk, and evolves.

Planning for retirement can feel more manageable when approached in stages: define your ideal retirement, estimate your future expenses, build an income strategy, and adjust along the way.

At Mutual of Omaha, we want to help you enjoy the future you deserve as you transition into a new life stage. Speak to a financial professional who can help you create a holistic retirement plan.

FAQs

Q1: What is a SMART goal for retirement?

A SMART goal for retirement is one that is Specific, Measurable, Achievable, Relevant, and Time-bound. Instead of saying, “I want to retire comfortably,” a SMART goal might be, “I want to save $1.5 million by age 65 to cover living expenses and healthcare for 25 years.” This approach helps you set clear targets and track progress.

Q2: What is the FIRE movement in retirement?

FIRE stands for Financial Independence, Retire Early. It’s a movement focused on aggressive saving, frugal living, and investing with the goal of retiring early. Followers of FIRE aim to build enough wealth to live off passive income without relying on traditional retirement timelines.

Q3: What is the best retirement strategy?

The best retirement strategy depends on you, but usually involves saving steadily, investing wisely, and planning for taxes. It’s also important to account for healthcare, inflation, and potential long-term care needs.

Source:

1. Federal Reserve Bank of St. Louis, Expenditures: Total Average Annual Expenditures by Age: Age 65 or over, September 2024

Disclosures:

Registered Representatives offer securities through Mutual of Omaha Investor Services, Inc., Member FINRA/SIPC. Investment Advisor Representatives offer advisory services through Mutual of Omaha Investor Services, Inc.  Mutual of Omaha Advisors is a division of Mutual of Omaha Insurance Company.

All investing involves risk, including the possible loss of principal, and there can be no assurance that any investment strategy will be successful.

Mutual of Omaha and its representatives do not provide tax and/or legal advice, and the information provided herein is general in nature and should not be considered tax and/or legal advice.

Not all Mutual of Omaha agents are registered representatives or financial advisors.

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