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What is retirement planning?

Retirement planning works out how much you need to stop working, saves it in the accounts that tax it least, and turns those savings into income that lasts.

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How much do you need to retire?

It comes down to three numbers. Start with spending, not a percentage of salary.

01

What you will spend each year

Estimate what you will spend each year in retirement, including taxes and healthcare.

02

What guaranteed income you will have

Subtract income you can count on, such as Social Security and any pension.

03

How much your savings must cover

Your savings cover the rest. A common rule of thumb, from research on 30-year retirements, is to withdraw about 4% of the portfolio in the first year and raise that amount with inflation after. It is a starting point, not a guarantee. On that rule, a household spending $120,000 a year with $45,000 of Social Security needs $75,000 a year from savings, or about $1.875 million.

Which retirement accounts should you use?

The account decides when you pay tax. Traditional 401(k) and IRA contributions cut taxes now and are taxed as income when withdrawn. Roth contributions are taxed now, and qualified withdrawals are tax-free. A Roth usually wins when your rate today is lower than the rate you expect in retirement; traditional usually wins in your highest-earning years.

Account 2026 limit Notes
401(k), 403(b), and most 457 plans $24,500 Plus $8,000 at 50 or older, or $11,250 at 60 to 63
Traditional or Roth IRA $7,500 Plus $1,100 at 50 or older; one limit across both
Roth IRA income phase-out, single $153,000 to $168,000 Above it, consider a backdoor Roth
Roth IRA income phase-out, joint $242,000 to $252,000 Measured on modified AGI
HSA $4,400 self-only, $8,750 family Tax-free for medical costs at any age

How do you turn savings into income?

The order you draw from accounts changes your lifetime tax bill.

01

Fill low brackets on purpose

A common default is taxable accounts first, then tax-deferred, then Roth. A better plan fills low brackets on purpose: the years between retiring and starting Social Security or required distributions are often the cheapest time to convert traditional savings to Roth.

02

Plan for required distributions

Required minimum distributions start at 73 for traditional IRAs and most workplace plans. Each one is taxed as income, and a large traditional balance can push them into a higher bracket than you had while working. The RMD calculator estimates yours.

03

Time Social Security

Social Security is the other big lever. Each year you delay past full retirement age, up to 70, raises your benefit by 8%.

What can go wrong in a retirement plan?

Five risks to test any retirement plan against.

  1. 01

    A bad market early

    Early losses hurt most. A cash reserve avoids selling low.

  2. 02

    Inflation

    At 3% a year, costs double in about 24 years.

  3. 03

    Living longer than planned

    Plan to 95, not to average life expectancy.

  4. 04

    Healthcare before Medicare

    Retire before 65 and you pay for coverage yourself.

  5. 05

    Taxes

    Traditional withdrawals are income and can raise Medicare premiums.

How Nino helps with retirement planning

Retirement planning asks how your savings and future income could cover your spending once you stop working. The answer changes with your retirement date, taxes, inflation, and investment returns. Explore those assumptions in Nino’s AI software, or work with your CPA and CFP team to build and maintain your retirement plan.

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  • Find your retirement target

    Start with the life you want to fund: housing, everyday spending, travel, and healthcare. Then compare that spending with your savings and years left to contribute. Nino lets you explore how saving more, spending less, or retiring later changes the projection.

  • Map where income will come from

    Put expected Social Security, pensions, rental income, and investment withdrawals on a timeline. The start dates matter as much as the amounts. Retiring before another income source begins can leave a gap that your savings need to cover.

  • Plan withdrawals around taxes

    The account you draw from affects how much you keep. Traditional retirement-account withdrawals can be taxable, while qualified Roth withdrawals are tax-free. Your CPA and CFP can coordinate withdrawals and evaluate conversions alongside your other income rather than choosing an account in isolation.

  • Test the difficult years

    A projection needs more than one set of assumptions. Try lower investment returns, higher living costs, or a longer retirement, and see how much room remains. Use those comparisons to discuss changes you could make; a projected outcome is not a promise.

Guides and calculators

Go deeper on retirement planning with Nino’s guides and free calculators.

Frequently asked questions

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