Retirement income
Goals-based financial planning for retirees
October 27, 2026
By Jamie Hargrave, Cadence Capital Investments
for retirees
Retirement income
Goals-based financial planning starts with your life goals, not your portfolio. A goals-based advisor defines each goal as a liability with its own timeline, amount, and risk tolerance.
Goals-based financial planning starts with your life goals, not your portfolio. A goals-based advisor defines each goal as a liability with its own timeline, amount, and risk tolerance. The advisor then matches assets and strategies to fund each one. This article explains how the process works for retirees, where it differs from goals-based investing, and what to ask before you choose an advisor.
The structure, stated plainly: investment advisory services at Cadence Capital Investments are offered through Prosperity Financial, a Registered Investment Advisor, which acts in a fiduciary capacity for those advisory services. Securities are offered through Fortune Financial Services, LLC, a Registered Broker/Dealer and member FINRA and SIPC. Insurance and annuity products are offered through licensed affiliates, so the firm is fee-based rather than fee-only: an affiliate may earn commissions on certain products, disclosed before any recommendation.
Goals-based financial planning defines your specific life goals first. Goals-based planning treats each goal as a liability with its own deadline, dollar amount, and tolerance for shortfall.
Each goal is a future cash flow you must fund. A retirement income goal starting at age 65 and lasting 30 years is a liability with a present value, a timeline, and a required certainty level, not a line item in a risk questionnaire. An advisor who thinks in liabilities builds a separate funding strategy for each goal rather than assigning one risk profile to your entire portfolio.
Retirement spending splits into three tiers. Needs are essential expenses to maintain your standard of living: housing, food, utilities, transportation, and predictable healthcare. Wants are lifestyle expenses that improve day-to-day enjoyment but can be adjusted: travel, dining out, entertainment.
Wishes are aspirational and legacy goals funded after needs and wants are secured: supporting family, charity, bequests. Each tier is funded with a different strategy and risk tolerance.
Research published in the Journal of Financial Planning examined how a goals-based framework affects utility-adjusted wealth compared with a strategy focused only on funding retirement. The findings are model-based and not a prediction of any individual result. Utility-adjusted wealth measures outcomes by how well your plan meets your actual life goals, not by whether your portfolio beat a benchmark. A retiree who funds travel, healthcare, and legacy goals with confidence has higher utility-adjusted wealth than one with a larger portfolio but no plan for spending it.
The process starts with discovery and ends with ongoing review. A goals-based advisor maps your full picture first, then builds one integrated strategy across income, investments, tax efficiency, and protection. The plan is dynamic: reviewed at least annually and adjusted as markets, tax law, and your life evolve, not set once and forgotten.
The process follows five steps that keep the plan anchored to your goals rather than to market performance.
Discovery: Define your goals, income sources, accounts, taxes, and timeline.
Strategy: Build one integrated plan.
Implementation: Open or adjust accounts, redirect savings, and structure withdrawals.
Review: Meet at least annually to compare allocation against the plan and adjust.
Adjustment: Update goals, amounts, or strategies when circumstances change.
Each goal carries four attributes that determine how assets are allocated to fund it. Term is when the goal must be met. Amount is the dollar requirement. Priority ranks goals by importance.
Tolerance for shortfall risk sets the bar for how much risk of not achieving a goal is acceptable. That tolerance ranges from Low to High. Low means a small chance of not meeting the goal. Medium means a moderate chance. High means a greater chance.
The funded ratio divides your assets by your goal liabilities. A funded ratio above 100% means you have enough to meet the goal at current assumptions. Below 100% means a shortfall exists and the plan must address it through additional savings, delayed spending, or adjusted goals.
The funded ratio drives decisions about spending, saving, and allocation over time. It gives you a concrete number to track instead of a vague sense of whether you are 'on track.'
Checklist: Five steps to verify at your advisor meeting
Goals-based investing is a subset of goals-based financial planning. It structures investment portfolios to meet specific financial goals using asset-liability matching or bucket strategies. Goals-based financial planning is broader: it coordinates income strategy, tax efficiency, protection, and estate planning, with investment management as one component rather than the whole picture.
| Dimension | Goals-based investing | Goals-based financial planning |
|---|---|---|
| Scope | Portfolio construction only | All financial disciplines coordinated |
| Primary question | How to invest to meet this goal? | How to save, invest, withdraw, and protect to meet all goals? |
| Risk framework | Risk capacity per goal | Risk capacity per goal plus income, tax, and protection strategy |
| Success metric | Goal achievement per sub-portfolio | Funded ratio across all goals |
| Typical output | Sub-portfolios or buckets | Integrated retirement plan |
Investing ends when the portfolio is built. Planning continues through withdrawal sequencing, tax strategy, Social Security optimization, healthcare cost projections, and estate considerations. A retiree needs both: a plan that coordinates all financial disciplines and an investment portfolio structured to fund specific goals within that plan.
Five of the 10 largest wealth managers globally have adopted goals-based investing as core to their value proposition, according to Datos Insights. Yet most portfolios remain disconnected from the financial plan. Portfolio construction often still relies on mean-variance optimization based on volatility tolerance rather than true asset-liability matching. A goals-based financial plan closes that gap by tying every investment decision back to a specific goal.
Applying goals-based planning to retirement means coordinating four areas that most people manage separately: income, taxes, investments, and protection. Each area must be tied to a specific goal with a timeline and a dollar amount.
Income gap analysis starts by listing every income source and every expense, separated into discretionary and nondiscretionary categories. The gap between stable income and essential expenses is the amount your portfolio must replace. This number drives every other decision in the plan.
Managing Required Minimum Distributions, Roth conversions, and the sequencing of taxable, tax-deferred, and tax-free accounts reduces the tax drag on retirement income. The order in which you withdraw from each account type matters as much as the amount. A goals-based plan models the tax impact of each withdrawal sequence and adjusts the strategy as tax law changes.
Healthcare costs in retirement include Medicare premiums, out-of-pocket costs, and potential long-term care needs. These costs rise with age and can derail a plan that ignores them. A goals-based plan projects these costs against your timeline and funds them with the appropriate strategy and risk tolerance. The Financial Advisor & Planning service integrates these areas into one coordinated strategy, built around your goals and reviewed as the terrain changes.
Test whether your plan is goals-based. List your top three retirement goals on paper, then next to each write the annual dollar amount it will require and the year it starts. If you cannot fill in both columns for all three, your plan is not yet goals-based.
Five misconceptions often prevent retirees from getting the full value of a goals-based approach.
The gap between claimed and actual integrated planning is wide. An advisor who only reviews your portfolio allocation without revisiting the underlying goals is doing investment management, not goals-based financial planning.
Before you hire an advisor, ask questions that reveal whether their process is genuinely goals-based. Cadence Capital Investments' Bay Area retirement guide covers what to ask and what answers to look for.
| Question | Answer to look for | Red flag |
|---|---|---|
| Which services are provided in a fiduciary capacity? | A clear, written answer for each service | Unclear which standard applies to which service |
| How do you charge? | Every fee and any commission disclosed in writing | Vague, or unwilling to put it in writing |
| How do you measure success? | Against your specific goals | Against market benchmarks |
| How often do you review the plan? | At least annually and on life changes | 'We review your portfolio quarterly' |
| What planning software do you use? | Dedicated planning software with Monte Carlo | Generic risk questionnaire only |
If you are within sight of retirement, the first step is mapping where you stand before you look for an advisor.
Start by listing your income sources, accounts, taxes, timeline, and what a good retirement actually looks like to you. You cannot evaluate an advisor's plan until you know what you want the plan to achieve.
Cadence Capital Investments is an independent firm with no proprietary products or sales quotas. Advisory services are offered through Prosperity Financial, a Registered Investment Advisor, which acts in a fiduciary capacity for those services. The firm offers a complimentary, no-obligation conversation to walk you through the route before you commit to anything. There is no cost and no obligation to begin the conversation.
For Orinda households, goals-based planning often means coordinating several things at once: when to retire, how pensions and workplace savings fit together, and what the family wants retirement to fund. Cadence Capital Investments works as a financial advisor for Orinda and the wider Lamorinda area from its San Ramon office, with phone and video meetings available. A financial planner can help put a dollar amount and a start date beside each goal, then build the income, investment, and protection plan around them. Schedule a complimentary conversation with Jamie Hargrave or call (925) 314-8513.
Retirement is a climb you only make once. The plan should be paced so you reach the top with energy to spare. The first step is a conversation, not a commitment. Schedule a complimentary review with Cadence Capital Investments or call (925) 314-8513. Cadence Capital Investments will listen and map where you stand before you commit to anything.
How is goals-based financial planning different from traditional retirement planning?
Goals-based planning gives each goal its own timeline and risk tolerance instead of managing one portfolio against a single benchmark. A goals-based advisor measures success by whether each goal stays funded, not by whether the portfolio beat its index.
What questions should I ask a goals-based financial advisor?
Ask whether the advisor is a fiduciary on all advisory accounts. Ask how they charge, whether fee-only or fee-based. Ask how they measure success against your goals, and how often they review the plan. Ask what planning software they use and whether your portfolio is actually structured around your goals or built on a generic risk questionnaire.
Do I need a goals-based plan if I already have a 401(k) and Social Security?
Many people benefit from one, because a 401(k) and Social Security are resources that still need coordinating against your spending needs, tax situation, and timeline. Without a plan, you may withdraw too much too soon, miss tax opportunities like Roth conversions, or lack a strategy for healthcare and long-term care costs.
How often should a goals-based retirement plan be reviewed?
A goals-based plan should be reviewed at least annually and whenever life changes occur: retirement, relocation, inheritance, or a health event. Markets, tax law, and your goals shift over time.
What software do goals-based financial advisors use?
According to the T3/Inside Information 2025 survey, 83.79% of planning firms use financial planning software. Financial planning software helps advisors model goals, run Monte Carlo simulations, and track the funded ratio for each goal.
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