Jeremy Keil walks through three critical questions future retirees can answer before their paycheck stops

Most people spend decades preparing for retirement by focusing on one number:

How much have I saved?

But retirement isn’t really about the size of your portfolio.

It’s about whether you can turn that portfolio into reliable income that supports the life you want.

That transition—from saving money to living on it—is where retirement planning becomes real.

And if you’re retiring within the next 12 months, there are three questions you can answer before your paycheck stops.

Question #1: How Much Monthly Income Do I Actually Need?

Unfortunately, this is where many people start with the wrong approach.

Most retirees try building a budget from scratch. They estimate utilities, groceries, gas, dining out, subscriptions, and dozens of other categories.

The problem?

Those budgets are almost always wrong.

They tend to assume:

Nothing unexpected happens
You never spend impulsively
You never travel more than expected
You never have major one-time expenses

Instead of trying to build a perfect budget from zero, Jeremy recommends a simpler and often more accurate approach:

Look at what already happened.

Specifically:
What actually went into your checking account over the last 12–24 months?

Because in most households, what goes into checking eventually gets spent.

That “take-home pay” becomes a much better starting point for estimating retirement income needs.

But there are a few important adjustments.

Don’t Forget These Costs

Your paycheck today already has several things removed before it hits your checking account:

Taxes
Health insurance
Retirement savings contributions

Once you retire:

You may stop saving for retirement
Your health insurance costs may change
Your tax situation will likely change

That means your gross salary is not the same as your retirement income need.

Many find it valuable to separate out:

Mortgage costs
Annual expenses (property taxes, insurance, vacations)
Large one-time expenses
Pre-65 vs. post-65 healthcare costs

Retirement spending isn’t just monthly bills.

It’s the full picture.

Question #2: When Should I Take Social Security?

Most people already have an answer to this question before they ever run the numbers.

And often, that decision is emotional.

Maybe a parent died young. Maybe a friend claimed at 62. Maybe someone simply wants to “get their money.”

But what if you about Social Security differently?

Not as an investment.

As insurance.

The official name of the program is Old-age, Survivors, and Disability Insurance. That framing matters.

Social Security exists to help:

If you live longer than expected
If one spouse dies earlier than expected
If inflation remains high
If markets struggle during retirement

In other words, Social Security is there to protect against things not going according to plan.

That’s why filing decisions shouldn’t be based only on “break-even” calculators.

The better question is:
What role does Social Security play in protecting your retirement?

Question #3: How Should I Adjust My Investments Before Retirement?

One of the biggest mistakes retirees make is treating retirement like a light switch.

They assume:
Growth before retirement.
Income after retirement.

But markets don’t work on your timeline.

Jeremy shared a powerful example from 2020:
People planning to retire within a year stayed fully invested in stocks because markets had been performing well.

Then COVID hit.

Markets dropped sharply, and many panicked—selling near the bottom because they suddenly realized they needed that money soon.

The issue wasn’t just the market drop.

It was that their investments weren’t aligned with their time horizon.

Your Investments Should Be Ready Early

Get your investments ready to retire three years before retirement.

Why?

Because roughly half of retirees stop working earlier than expected.

If your investments are prepared ahead of time:

Market volatility becomes less stressful
You have short-term money available if needed
You’re less likely to panic during downturns
You gain flexibility if retirement comes sooner than planned

But there’s balance here too.

Retirement doesn’t mean abandoning long-term growth entirely.

If retirement could last 25–30 years, some money still needs long-term growth potential.

The key is having:

Short-term money for near-term needs
Long-term money for future growth

Not all one or all the other.

The Bottom Line

Retirement isn’t just about stopping work.

It’s about replacing a paycheck with a plan.

And before your paycheck disappears, you should know:

What your lifestyle actually costs
What role Social Security plays in your plan
Whether your investments are prepared for retirement realities

Because when those three pieces work together, retirement becomes much more than a date on the calendar.

It becomes sustainable.

Don’t forget to leave a rating for the “Retire Today” podcast if you’ve been enjoying these episodes!

Subscribe to Retire Today to get new episodes every Wednesday.

Apple Podcasts: https://podcasts.apple.com/us/podcast/retire-today/id1488769337

Spotify Podcasts: https://bit.ly/RetireTodaySpotify

About the Author:

Jeremy Keil, CFP^®, CFA is a retirement financial advisor with Keil Financial Partners, author of Retire Today: Create Your Retirement Income Plan in 5 Simple Steps, and host of the Retirement Today blog and podcast, as well as the Mr. Retirement YouTube channel.

Jeremy is a contributor to Kiplinger and is frequently cited in publications like the Wall Street Journal and New York Times.

Additional Links:

Buy Jeremy’s book – Retire Today: Create Your Retirement Master Plan in 5 Simple Steps
“Retiring in the Next 12 Months? Answer These 3 Questions Before Your Paycheck Stops” – by Jeremy Keil, Kiplinger Magazine
5StepRetirementplan.com

Connect With Jeremy Keil:

Media Disclosures:

Disclosures

This media is provided for informational and educational purposes only and does not consider the investment objectives, financial situation, or particular needs of any consumer. Nothing in this program should be construed as investment, legal, or tax advice, nor as a recommendation to buy, sell, or hold any security or to adopt any investment strategy.

The views and opinions expressed are those of the host and any guest, current as of the date of recording, and may change without notice as market, political or economic conditions evolve. All investments involve risk, including the possible loss of principal. Past performance is no guarantee of future results.

Legal & Tax Disclosure

Consumers should consult their own qualified attorney, CPA, or other professional advisor regarding their specific legal and tax situations.

Advisor Disclosures

Alongside, LLC, doing business as Keil Financial Partners, is an SEC-registered investment adviser. Registration does not imply a certain level of skill or expertise. Advisory services a...