By Basant El-Faramawy
Many Americans approaching retirement have not accumulated a seven-figure nest egg, but financial advisers say a secure retirement is still achievable with disciplined planning. A new guide outlines eight key strategies for savers with six-figure balances.
1. Know Your Retirement Number
Focus on the income you will need in retirement rather than the total you have saved. Recognize that spending often declines with age. Treat Social Security as an inflation-protected lifetime income stream, alongside any pension. Avoid relying solely on interest and dividends for cash flow, as that limits returns and removes inflation protection. Instead, invest in a diversified mix of stocks and bonds, draw some distributions from capital gains, and keep a buffer for inflation. If savings fall short of the gap between Social Security and income needs, consider downsizing, a reverse mortgage, or part-time work. Those still employed full time should boost retirement contributions. Consult a qualified financial adviser to calculate a probability of success.
2. Build a Safety Net
Protect against catastrophic events with health insurance (if not yet eligible for Medicare), long-term-care insurance, and umbrella liability coverage. Update estate documents with an attorney. Do not retire without an emergency fund covering at least three to six months of living expenses.
3. Claim Social Security Strategically
Claiming benefits while continuing to work can reduce payments. For those younger than full retirement age in 2026, benefits are cut by $1 for every $2 earned above $24,480. Waiting past age 67 increases benefits by 8% annually up to 124% of the standard amount. Decide based on life expectancy, immediate cash needs, and the impact on Roth conversion opportunities.
4. Manage Taxes Before and During Retirement
Roth conversions between retirement and required minimum distributions (RMDs) are a critical tool. An accountant or adviser can determine how much to convert each year to avoid jumping tax brackets, equalize pre- and post-RMD tax rates, and prevent Medicare premium surcharges triggered by income-related monthly adjustment amounts. Over-converting can raise total taxes and accelerate payments.
5. Monitor RMDs and Medicare Premiums
Higher taxable income raises Medicare Part B premiums. In 2026, a single filer with modified adjusted gross income of $109,000 pays the standard $202.90 monthly premium; just one dollar more jumps the premium to $284.10. Careful income planning can avoid these cliffs.
6. Eliminate High-Cost Debt
Credit card debt carries high nondeductible interest and should be paid in full each month. Analyze the interest rates and opportunity cost of other debts such as car loans, mortgages, or home equity lines, as their structure can significantly affect retirement security.
7. Stress-Test and Update Your Plan
Run retirement projections under various scenarios: a 30% stock market drop, persistent inflation, early death of a spouse, long-term care needs, delayed Social Security, major home repairs, and longevity into the 90s. Revisit the plan after life events such as a spouse's death, relocation, tax law changes, or an inheritance.
8. Avoid Assuming Six Figures Is Enough — or Not Enough
Financial security depends more on purchasing power than portfolio balance. Inflation drives up costs for healthcare, groceries, entertainment, and rent, while fixed mortgage payments stay constant. Required portfolio withdrawals will rise annually even with unchanged lifestyle. Structure investments and withdrawals for tax efficiency, and adopt a flexible spending strategy that cuts discretionary outlays during high inflation or poor market returns.
