Retirement income
Retirement readiness assessment
September 13, 2026
By Jamie Hargrave, Cadence Capital Investments
Retirement readiness assessment
Retirement income
Learn a methodical process for your retirement readiness assessment. This guide helps you evaluate income, expenses, and resources for a well-timed transition.
Most people approaching retirement can tell you what they have saved. Far fewer can tell you what it will actually produce each month, which is the number that matters once the paycheck stops.
A retirement readiness assessment is a structured review of expected income against projected expenses, run far enough ahead that there is still time to change the answer. This article covers what goes into one, how to run it, and which decisions inside it cannot be undone.
• Readiness is measured in monthly cash flow, not portfolio balance.
• Separating essential from discretionary spending establishes the floor the plan must clear.
• Inflation, healthcare, and longevity are the variables that move the answer most.
• Several elections in the transition are permanent, which is why the review belongs five to ten years out.
A readiness assessment compares what your resources will produce against what your life will cost, across a period that may run thirty years. It is a framework for identifying gaps while they are still fixable, not a guarantee of any outcome.
The inputs are your savings and account balances, your Social Security projections, any pension, and any income from insurance products. Where an annuity is part of the picture, note that it is an insurance contract rather than an investment, and any guarantees are subject to the claims-paying ability of the issuing company.
All investing involves risk, including the possible loss of principal. Past performance is not indicative of future results.
The useful window generally opens five to ten years before a target retirement date. That is enough lead time to adjust savings, model different claiming ages, evaluate conversion windows, and reduce a concentrated position across several tax years rather than one.
Closer in, the assessment is still worth running. It simply narrows the set of available options, because several of the decisions involved are one-time.
Separate spending into two categories, because they behave differently under stress.
Essential expenses are housing, utilities, groceries, insurance, and healthcare. These define the floor the plan has to clear every month.
Discretionary expenses are travel, hobbies, and dining out. These flex, which makes them the release valve in a difficult year.
Knowing which is which tells you how much of the plan is rigid and how much can absorb a shock.
List every source: Social Security, any employer pension, personal savings, and taxable accounts. Each carries different withdrawal rules and different tax treatment, which is why they get reviewed as one picture rather than separately.
Social Security is the base for most households. Beneficiaries received a 2.8 percent cost-of-living adjustment for 2026, per SSA.gov. Full retirement age is 67 for those born in 1960 or later. Pull your own figures from SSA.gov rather than estimating.
Healthcare is the expense most likely to be underestimated. Medicare premiums and deductibles are set annually and published at Medicare.gov; the standard Part B premium for 2026 is $202.90, and higher-income households may also pay income-related monthly adjustment amounts on top of it. Original Medicare does not cover everything, and out-of-pocket costs for prescriptions, dental, vision, and hearing land outside the premium.
These figures change annually. Confirm current amounts at Medicare.gov.
Gather the documents. Bank and investment statements, employer benefit summaries, any pension projection, and your Social Security statement.
Define the lifestyle. Consider whether you stay in the East Bay, relocate, or travel more. Housing and property taxes move the number most locally.
Project the income. Build the monthly figure from all sources, with the timing of each.
Identify the gap. Compare projected income against estimated costs and see what the portfolio has to supply.
Then review it with someone who can tell you what the numbers mean rather than only what they are.
List every account, including employer plans and IRAs. For 2026, the 401(k) elective deferral limit is $24,500 for those under 50, with an $8,000 catch-up at 50 and over, or $11,250 for those reaching ages 60 through 63 during the year. These figures are indexed annually; IRS.gov publishes current amounts.
Some decisions in this process are permanent, and those deserve the most preparation.
Pension elections are generally final once payment begins.
Social Security timing permanently sets the monthly amount. A withdrawal of application is available within twelve months of first entitlement, requires repaying benefits received, and can be used once in a lifetime.
Net Unrealized Appreciation elections on employer stock are generally irreversible and require a lump sum distribution of the entire vested balance within one tax year.
This is not tax or legal advice. Consult your CPA or attorney.
Inflation raises the cost of maintaining the same standard of living. A payment that does not adjust covers less each year, and healthcare costs have historically risen faster than general prices.
Sequence of returns risk is the effect of poor returns arriving in the early withdrawal years. Selling into a decline liquidates more shares for the same cash. Holding near-term spending in stable assets reduces the need to do that; it does not remove market risk.
A longer retirement needs the income to last longer. Life expectancy at 65 is meaningfully higher than at birth, and a substantial share of 65-year-olds live well into their nineties. SSA.gov publishes current life expectancy tables and a calculator; use those rather than a general figure, since the numbers are updated periodically.
Plans are generally built to a horizon extending well into the nineties for that reason.
Portfolios supporting withdrawals are built around what the money has to fund and when, balancing stability for near-term spending against growth for the long horizon. All investing involves risk, including the possible loss of principal.
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. The firm is fee-based rather than fee-only, because an affiliate may earn commissions on certain products, which is disclosed before any recommendation.
We work with households across the East Bay, including employees and retirees of large local employers whose benefit structures require coordination with personal assets. We work alongside your CPA and attorney; we do not provide tax or legal advice.
We meet quarterly to review the plan against what is actually happening rather than what was projected.
The gap. Everything else is inputs. Once you know what your dependable sources cover and what your life costs, you know what the portfolio has to supply, and that number drives every other decision.
Generally five to ten years before your target date. That leaves room to adjust savings, model claiming ages, evaluate conversion windows, and reduce concentrated positions gradually. Starting closer in is still worth doing; it narrows the options available.
It reviews how tax treatment affects the income picture, but it is not tax advice and does not replace your CPA. Tax rules and IRS figures change. Consult a qualified CPA or tax attorney about your situation.
Annually, or after any significant change in health, family circumstances, or financial position. Benefit and tax figures adjust each year, so even a stable plan needs its inputs refreshed.
Yes, and the underlying data is public at SSA.gov, IRS.gov, and Medicare.gov. The difficulty is usually coordination: benefit elections, withdrawal order, and tax timing interact, and several are one-time. That is where an outside read is worth most.
Bank and investment statements, employer benefit summaries, any pension projection, your Social Security statement, and details of any insurance already in force. Gathering those changes the conversation more than any framework does.
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