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Retirement today is much different than past decades, and recent trends impacting soon-to-be retirees have many people rethinking their retirement planning strategies. As you plan for your next chapter, it’s important to understand how a dynamic retirement landscape could impact your financial confidence. Let’s consider a few recent trends and practical steps you can take to strengthen your retirement plan.

Longer life expectancies

In recent studies, the top financial fear of retirees is the possibility of running out of money part-way through retirement.¹ This fear is exacerbated by the fact that the average American life expectancy has increased from 68.1 years in 1950 to 79.4 years in 2025, which means that retirees must ensure they have enough savings to last for an extra 11 years compared to past generations.² Fortunately, there are several steps you can take to help ensure you don’t outlive your assets.

Implement a “bucket strategy” for allocating your investments. Allocating your investments to different buckets based on when you will need to access them allows you to work toward growing your portfolio for the long-term, while also ensuring you have enough liquid reserves to cover your short-term living expenses.

• Short-term bucket – Consider maintaining adequate funds in cash or very conservative investments to cover the next one to two years’ worth of living expenses. This allows you to pay for your daily lifestyle needs without being forced to sell out of stocks in a downturn.
• – Medium-term bucket – Assets invested in the medium-term bucket can be used to replenish your short-term bucket at opportune times. These assets are typically invested in balanced funds and bonds.
• – Long-term bucket – Your long-term bucket should be focused on growth, taking into account your risk tolerance and investment timeline. Remember that you could end up living in retirement for 20 to 30 years, which means that it remains important to keep up with inflation and continue growing your assets.

Carefully consider the timing of your Social Security benefits. Full retirement age (FRA) is the age at which you are eligible to receive 100% of your earned Social Security benefit. For those born after 1960, FRA is 67. Claiming benefits at a younger age permanently reduces your monthly benefit by about 30%, while waiting until age 70 can increase your monthly benefit by up to 24%.

This range of monthly benefits can have a big impact on your net retirement income, which is why it’s important to carefully consider the timing of Social Security. Your wealth manager can help you run various scenarios and help you determine the right approach for your particular situation.

Establish a strategic withdrawal strategy. Having a strategic withdrawal strategy in place can help ensure you maintain enough assets to fund your lifestyle needs throughout retirement. Ideally, you will have saved in a variety of accounts with different tax treatments, as this helps optimize your tax savings opportunities.

There are three main approaches you may wish to consider.

1. Systematic withdrawals – This involves taking regular withdrawals at a particular rate. For example, you may decide to withdraw 4% of your retirement savings in the first year of retirement and adjust that amount for inflation in each subsequent year.
2. Tax-driven withdrawals – Another approach is to withdraw from one account at a time based on each account’s tax exposure. For example, it may make sense to withdraw from your taxable accounts first, followed by your tax-deferred accounts and your tax exempt accounts last.
3. Proportional withdrawals – This approach involves withdrawing from each account based on the proportion of retirement savings in each account type and can help ensure a more stable tax bill from year to year.

Phased retirements

The average retirement age has steadily risen in recent years as a greater percentage of Americans continue working throughout their 60s, 70s and beyond. Between 2002 and 2007, 41% of individuals aged 60-64 and 70% of those between the ages of 65-69 were retired. However, between 2016-2022, just 32% of those aged 60-64 and 70% of those aged 65-69 were retired.³

Instead of fully retiring on a set date, more workers are choosing a phased approach. This often includes gradually reducing their hours, shifting to part-time work, taking on roles in the gig economy or switching industries completely. The benefit to a phased retirement is that it provides additional time to save, invest, and remain active and engaged.

Rising healthcare costs

Healthcare is one of the largest expenses faced by many retirees, and the costs keep rising, which is why it’s important to have a plan in place to pay for medical expenses in retirement. If you’re eligible to contribute to a health savings account (HSA), it may be wise to maximize your contributions throughout your working years. This can be a great way to pay for your retiree medical expenses with tax- advantaged funds.

You may also consider purchasing a Medicare supplement plan and/or long-term care insurance to help cover unexpected expenses. Your wealth manager can help you evaluate your options and establish a healthcare savings plan that makes sense for you.

Could you use some help navigating the challenges of planning for a successful retirement? North Oaks Wealth Management is here to help. We support clients in building strong financial futures, one brick at a time. Schedule a call to learn more.