Retiring with confidence is a goal for many—but how can you be sure you’re on the right track? Pure’s Senior Financial Advisor, Sumit Mehta, CFP®, AIF®, offers practical strategies to strengthen your retirement plan—no matter your stage of life. Start making informed choices today to help secure the financial future you envision for tomorrow.
He discusses:
- 3 pillars of retirement planning
- Optimizing your savings rate
- Retirement reality gap
Transcript
Imagine waking up on your first Monday of retirement. The alarm doesn’t ring because you didn’t set it. The day is full of possibilities, not deadlines. Are you smiling with excitement or lying awake with financial anxiety?
This isn’t a hypothetical question—it is a reality and over half of Americans fear running out of money more than they fear death1. Today, we will talk about things you can do to help ensure you’re steering toward the first scenario: retirement with confidence.
The average American spends roughly 25 years in retirement. That’s two and a half decades of life that need financial support without a paycheck. Yet studies show that 1 in 4 Americans have no retirement savings at all and of those who are saving, most are saving far less than is needed:
The good news? No matter where you are today, you can take steps to improve your tomorrow.
The 3 pillars of retirement planning are to:
- Know your number
- Optimize your savings rate
- Choose the right places for these savings.
Let’s start with the first—knowing your number. All retirement planning starts with a target. This target depends on what you plan to spend in retirement, which depends on how you like to spend your time. Reading in the park doesn’t cost that much, while sailing in the Mediterranean – a different story. You have to decide your monthly spend number for yourself and multiply that number by 25. That’s a conservative estimate of what you’ll need to save. For example, if you plan to spend $10,000/month or 120,000/year, that savings number is $3 million.
Intimidating? Perhaps. Impossible? Certainly not—especially when you understand the power of compound interest.
Once you have this number, move to the second leg—optimizing your savings rate. How much and how early you save is the single most powerful factor in retirement success, more important than market returns or investment selection.
Start by capturing your employer match on your 401k —that’s free money. Visit your budget to see if you can save 15-20% of your income for retirement. Work to increase your savings rate by 1% a year until you reach your target. Automatically put raises and bonuses toward your retirement before lifestyle inflation sets in.
A 35-year-old who saves just $900/year could accumulate over $1 million by age 65, assuming 7% average returns. This is the power of compounding, which Einstein called the 8th wonder of the world. Once your savings is in order, you now need to know where to put this money.
Where you save matters almost as much as how much you save. Your options include:
Tax-advantaged accounts: 401(k)s & IRAs, which give your money breathing room to grow. Within these, you have choices between Roth and Traditional versions: You will want to consider based on whether you expect higher or lower tax rates in retirement. Health Savings Accounts (HSAs) are the only accounts that offer triple tax advantages when used for healthcare in retirement. You also have taxable accounts for additional savings beyond retirement account limits.
Most of us face a retirement reality gap—the difference between our current trajectory and our needs. Closing this gap requires either: saving more, working longer, spending less in retirement, some combination of all three.
Time is your best friend for saving – the longer you wait, the higher the percentage of your income you will need to save to achieve the same result.
No matter what your age or situation is, there are specific steps you can take right now:
- Calculate your retirement number
- Review your current savings rate
- Examine your accounts for proper allocation across tax buckets and asset classes
- Consider speaking with a financial advisor for professional and personalized guidance
- Automate your savings so you never see the money in your checking account
If you feel as though you are late to the game, think about this—the best time to plant a tree was 20 years ago. The second-best time is today. The same applies to retirement planning. Whether you’re behind, ahead, or just getting started, the actions you take today will shape your future.
So, I ask you to do this following exercise. Take just 30 minutes to calculate your personal retirement number and current savings rate. Then make one change—even a small one—to help close your retirement reality gap.
Because that Monday morning I described earlier? It’s coming for all of us. The only question is whether you’ll greet it with confidence or concern. The choice—and the power to decide—is yours today. If you would like to see if you’re on track to reach you retirement goals, contact Pure for a free financial assessment.
1 Allianz, Americans are More Worried About Running out of Money than Death, April 2025.
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IMPORTANT DISCLOSURES:
• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC, a Registered Investment Advisor.
• Pure Financial Advisors LLC does not offer tax or legal advice. Consult with your tax advisor or attorney regarding specific situations.
• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.
• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
CFP® – The CERTIFIED FINANCIAL PLANNER® certification is by the CFP Board of Standards, Inc. To attain the right to use the CFP® mark, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. 30 hours of continuing education is required every 2 years to maintain the certification.
AIF® – Accredited Investment Fiduciary designation is administered by the Center for Fiduciary Studies fi360. To receive the AIF Designation, an individual must meet prerequisite criteria, complete a training program, and pass a comprehensive examination. Six hours of continuing education is required annually to maintain the designation.
