Averages can’t tell you what your retirement should cost. A personal spending framework can.
By Shane A. Carrier, CFP®, Uhler Vertich White Advisors
Many retirees are financially ready to spend long before they feel emotionally ready to.
You spent an entire career in accumulation mode: For decades, every raise, every bonus, and every tax refund got funneled somewhere productive, and that discipline is the reason you’re in the position you’re in today.
But that all changes in retirement. The money isn’t supposed to just sit there anymore; it’s supposed to go toward the trip, the renovation, the family gathering, and the life you worked all those years to afford.
If spending still gives you that uneasy feeling, it doesn’t mean you’re doing anything “wrong.” That’s thirty-plus years of good habits talking—but now it’s time to let the plan take over.
Because true retirement confidence comes from knowing what your own resources are designed to support.
Why “Average” Retirement Spending Numbers Miss the Point
Every few months, a new study comes out with a number for what retirees “should” be spending. The problem is that those numbers are built from averages. They can’t account for whether your mortgage is paid off, whether you’re supporting a parent, or whether your idea of retirement involves a garden and a library or a boat and a passport.
We know firsthand that spending in retirement varies dramatically from person to person:
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- Someone with a successful career and a modest lifestyle may need far less income in retirement than they earned while working.
- Some people downsize or relocate from a major city to somewhere more affordable.
- Others plan to travel heavily in the first few years, then settle into a quieter routine later.
When clients ask me whether they’ll need the same income in retirement, my honest answer is: it depends entirely on you. There is no golden rule, because there is no average retirement.
That’s why we never start with a benchmark here at Uhler Vertich White. We start with a conversation, then build a personal spending framework around the life you actually want to live.
Related: Explore our Financial Planning Services
Your Financial Independence Date vs. Your Retirement Date
This is a distinction I think about constantly, and I believe it’s one of the most important ideas in retirement planning:
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- Financial independence means your resources can now support a lifestyle you’re comfortable with.
- Retirement is the moment when your resources can support a lifestyle that feels more compelling than continuing work.
Those are two very different milestones, and the gap between them looks different for everyone. Just because you’re financially independent doesn’t necessarily mean retirement is what you want at this point in time.
My job is to help you see both clearly (what you want and what the numbers support) and customize your personal spending framework accordingly.
Related: Your Retirement Has a Golden Window
What Does a Personal Spending Framework Actually Do?
Once we know what your life actually requires, we turn that plan into a practical system for spending with confidence in two distinct layers:
1. The first is your monthly income.
We set a specific amount, based on your plan, that gets deposited into your checking account every month from your portfolio. It functions like a paycheck: consistent, predictable, and sized to your actual life.
You don’t have to think about where it’s coming from or whether it’s the right number, because we’ve already done that math. You also don’t need to save any of it or budget those funds, because we’ve already built in a second layer to your framework to cover life’s bigger expenses.
2. The second is what we call your planned spending pool.
This is a separate reserve for the bigger, predictable expenses that might come up throughout the year, like property taxes, insurance premiums, or a car repair. When one of those bills lands, you call the office and we send what you need from the pool.
Between those moments, that money isn’t sitting idle; it’s positioned in a money market fund designed to earn more than it would in a checking account.
Many people come to us carrying anxiety about retirement, even when the numbers are more than sufficient. What a personal spending framework often gives them is relief. Instead of wondering whether every withdrawal is a mistake, they understand what their resources are built to support.
Your personal spending framework handles the tracking. Your job is to live your life and let us know when something comes up.
Making Sure the Plan Holds Up When Life Doesn’t Go as Expected
A spending framework only works if it can absorb what you don’t see coming. That’s why our planning goes well beyond monthly income and predictable bills.
It starts with how your portfolio is invested.
If a portfolio is positioned properly, you can generally withdraw about 5% of its value on an annual basis. The key phrase there is “positioned properly.”
We want you to know that the greatest risk isn’t a dip in the market. It’s not having enough money to live your life as you wish. That means we’re investing with the goals of earning that 5%, plus enough to account for inflation, so your purchasing power doesn’t erode year after year.
For many of our clients who have been with our practice for years, the numbers tell a clear story: we believe that withdrawing less than what your portfolio earns, is a key to a successful retirement. That means even while living off their investments, their wealth has continued to grow. It’s one of the most powerful illustrations of what a well-built plan can do over time.
With that foundation in place, we plan for the things most people hope they’ll never need to think about, like health scares or losing a spouse.
On the healthcare side, our approach depends on where you are in life. If you’re still working, we focus on understanding your maximum out-of-pocket exposure, evaluating the strength of your coverage, and helping to ensure your financial plan can absorb those costs if they arise. For clients on Medicare, we help make sure you’re in a strong Medicare supplement so you can choose the care you receive when you need it most. We also review your Part D coverage during the annual open enrollment period to help ensure your plan remains well suited to your needs in the coming year.
And then there’s the conversation nobody wants to have, but everyone deserves to have had: If one spouse passes first, will the surviving partner be okay?
We don’t wait for that moment to find out. Social Security survivor benefits are already factored in, insurance is positioned, and assets are structured so that the transition doesn’t become a financial crisis on top of a personal one.
Key Takeaways:
- Why does spending in retirement feel uncomfortable even when I have a plan? Decades of saving habits don’t just switch off. That hesitation is incredibly common, and it doesn’t mean something is wrong with your plan.
- Do I need to track my retirement spending? We specifically design your planned spending pool and monthly income to remove that burden. If a big bill shows up, you call us. That’s it.
- How do I know I’m not going to run out of money in retirement? Your spending framework is intentionally designed to align your resources with the life you want to live, in a way that’s sustainable over your lifetime. That means we’re balancing current income needs, future purchasing power, and the flexibility to adapt as life changes, while helping preserve the financial strength needed to support you and the next generation.
You’re Not Average, and Neither is Your Financial Plan
The real goal of retirement planning is to build a system that supports your life, adapts when life changes, and gives you confidence that someone is paying attention to the details.
That’s how we think about our role: we serve as your family CFO, coordinating with your CPA, attorney, insurance professionals, and family where needed so every recommendation supports helping you live well. Whether that means potentially minimizing unnecessary taxes, reviewing insurance coverage, or planning for a surviving spouse, we’re here to help plan for every part of your financial life.
If you have any questions about your own retirement spending framework or simply want to talk through some of the “what ifs” on your mind, we’d always love to hear from you—reach out anytime.
Not yet working with our team? Tired of navigating the big questions alone? If you’re looking for a retirement plan built around your life, not a rule of thumb, we’d be glad to start that conversation.
The opinions expressed and the information provided in this publication are those of the author and Uhler Vertich White Advisors, LLC, an affiliated branch office of Raymond James Financial Services, Inc., and are not necessarily the opinions or recommendations of Raymond James Financial Services, Inc.
There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions.
Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.