You’ve saved for decades. You’ve done most of the right things. And now that retirement is here – or getting close – the question isn’t really whether you have enough. It’s something more specific and more uncomfortable: how much can we actually spend?

For a lot of people, the honest answer is “I’m not sure.” They have a balance. They have a rough sense that they’re in okay shape. But they don’t have a number they trust – which means every significant purchase comes with that nagging trepidation, even when the money is clearly there.

That trepidation is worth paying attention to, because it’s usually telling you something. It’s telling you that a portfolio balance isn’t the same thing as a spending plan.

The Rules of Thumb Have a Real Problem

The 4% rule is the starting point most people land on. Withdraw 4% of your portfolio in year one, adjust for inflation each year, and historically you’ve had a high probability of not running out over a 30-year retirement. That’s a meaningful finding, and it’s a pretty good starting point when you’re getting yourself oriented. In many historical scenarios, retirees who followed it could have spent more than they did – which means it tends to err on the side of caution.

This isn’t necessarily a flaw – it’s a lot better to be able to leave something to charity or your kids than it is to run out of money.

But it’s also not a plan.

As you dig deeper, you’ll find no shortage of alternatives – the modified RMD approach, the endowment method, guardrail strategies, dynamic ratcheting and spending rules. They vary in their mechanics and their sophistication.

But they all share the same core limitation: they produce a number based on a formula, not based on your life. And that’s a problem no formula can solve.

Your spending in retirement is almost certainly not going to be flat. It’s not going to follow a smooth inflation-adjusted line from age 62 to age 90 (and probably beyond).

Retirement Spending Has a Shape

Real retirement spending has a shape – and most people recognize it when they see it. It moves through three fairly predictable stages.

In the early years of retirement, most people spend more. The trips that got deferred for thirty years are finally happening. The projects, the experiences, the freedom to say yes – early retirement tends to be active and, for a lot of people, genuinely expensive in the best way. That’s not a problem to be managed. It’s the point.

Then spending typically moderates. The pace of activity shifts. Big travel gives way to different priorities. Day-to-day life finds its rhythm, and the spending reflects that.

Later, costs can rise again – often driven by healthcare and the kinds of support that become more relevant with age.

No rule of thumb accounts for that arc. The 4% rule doesn’t know that you want to spend significantly more in your first decade and are comfortable spending less in your second. It can’t reflect the fact that your plan needs to fund a very different life at 65 than at 80. It just produces a number and holds it.

A financial plan can model that shape.

It can reflect what you want your life to look like in stages – not as a theoretical exercise, but as a real input that drives the math.

Start With What You Want

Before any of the numbers matter, there’s a more fundamental question: what are you actually building toward?

This isn’t a soft question. It’s the first input. What does the first chapter of retirement look like for you? Is there a trip that’s been on the list for years? A way you want to spend time with your family – your children, your grandchildren – that your schedule never allowed? Work you want to do because you choose to, not because you have to? Causes you’ve always wanted to support more intentionally?

Those answers aren’t just motivational. They’re the raw material of a retirement income plan. They tell you what the early years need to fund, what the middle years might look like, and what matters enough to protect across all of it.

Once you have a real picture of the life you’re designing, the financial inputs – Social Security timing, portfolio structure, tax strategy, withdrawal sequencing – exist to help you get there. They’re the mechanics.

Your life comes first.

If you’re not sure where to start with that conversation, our Life Beyond the Numbers guide walks through the questions worth asking before any of the math begins.

And when it comes to translating that life into spending estimates: work at the level of thousands of dollars, not specific amounts. “We want to spend $9,000 a month in the first few years” is a useful planning number. Poring over your grocery store receipts and averaging things out to the penny is not.

Trying to account for every specific dollar in advance isn’t just unnecessary – it can make the whole exercise feel more daunting than it needs to be, and it creates a false sense of precision that usually doesn’t survive the first year of retirement anyway.

What a Plan Can Do That a Formula Can’t

A retirement income plan built around your specific situation is a different thing entirely from a rule of thumb – and the difference shows up in the details. It accounts for the income you have that isn’t coming from your portfolio – Social Security, any pension, any work you plan to do – which changes what you need to draw and when. It reflects the tax character of your accounts and builds a withdrawal strategy around that. It models the life you’ve described in stages, not as a flat line.

Most importantly, it answers a different question than the one the formulas answer. The formulas answer: what can I technically take out? A plan answers: what can we spend with confidence, given how we actually want to live?

Those are not the same question. The ceiling isn’t the goal. Spending that’s sustainable, structured, and connected to what matters to you – that’s the goal.

If your current answer to “how much can we spend” is somewhere in the range of “I think we’re probably fine” – a plan built around your specific situation is how you move from uncertainty to clarity. That conversation starts with understanding what you actually want retirement to look like.

Schedule a 20 Minute Call with an advisor and we’ll start there.