The most common question Scott Caskey hears from people approaching retirement is some version of the same thing: do I have enough? It's a reasonable place to start, but it may not be the most useful one. A more actionable question, and the one that tends to give people a clearer picture, is whether their withdrawal rate is sustainable.

Withdrawal rate is the percentage of your portfolio you need to draw each year to cover your expenses. The calculation is straightforward: if you need $40,000 per year from your portfolio and you have $1 million in assets, your withdrawal rate is 4%. What that number tells you about the long-term viability of your retirement plan depends heavily on how accurate the expense figure is. People are all over the board when it comes to tracking spending. Some hand over years of detailed spreadsheets. Others have a rough sense of what they spend each month. The point isn't to achieve perfect precision before you can move forward. The point is that underestimating expenses means underestimating your actual draw rate, which can lead to a plan that looks solid on paper but creates real pressure later.

For 30-plus years, most people operated with a clear objective: contribute to the 401(k), let it grow, stay the course. Shifting to distributions reverses much of that logic. Now there are decisions that didn't exist before, including which accounts to draw from first, how each distribution is taxed, how those distributions interact with Social Security income, and whether the investments being sold to fund that income are positioned appropriately for the timing. None of these questions has a one-size-fits-all answer, and that's why a true retirement income plan is different from an investment portfolio.

Financial readiness and emotional readiness don't always arrive at the same time, and a retirement plan that only addresses the numbers is incomplete. Many people have spent 30 or 40 years building their days around work, and the structure, purpose, and social connection that came with it don't automatically transfer to retirement. One of the most practical things someone can do before retiring is use vacation time to simulate a retirement week. Fill the time with the activities you plan to pursue, then reflect on what that actually felt like. Clients who go through a trial period like this often come back with a different picture of what they actually want. That's useful information to have before making a permanent change.

The first year of retirement tends to look different than projected regardless of how carefully someone has planned. Spending patterns shift in ways that are hard to predict in advance. Clients who set a regular monthly draw from the start tend to have a much cleaner sense of where they stand than those who take distributions as needed and try to reconstruct the pattern at the end of the year. Market volatility also feels different when you're drawing from a portfolio rather than adding to it, and that psychological shift is something even experienced planners describe as a surprise when they make the transition themselves.

Retirement also unfolds in phases, and a flat spending assumption across all of them tends to miss the mark in both directions. Early retirement is often the most active and expensive period. The middle years tend to bring lower discretionary spending. Later years can carry significantly higher healthcare costs. A plan that accounts for the actual shape of retirement spending, rather than a single steady number across 20 or 30 years, is far more likely to hold up.

Tax planning runs through all of it. Every distribution has a tax consequence, and those consequences interact with each other in ways that aren't always obvious. When a client calls for a draw, a tax map of the current year's income helps ensure the distribution doesn't create an unintended tax bill or push income past a threshold that affects Medicare premiums or deductions. For longer-term planning, modeling lifetime tax impact across different Roth conversion strategies gives clients a full picture of what they owe not just this year, but across the entire arc of retirement.

If you're within five years of retirement and you haven't built a retirement income plan, this episode is a useful starting point. A complimentary introductory conversation with the Summit team can help translate these concepts into a picture that's specific to your situation.