If you’re planning to retire within the next decade, you’ve likely asked yourself: “Am I okay?” Or “Do I have enough?”
The truth is, the “magic number” for retirement isn’t what it used to be. The world has changed—rising inflation, fluctuating interest rates, and market volatility mean that what worked a few years ago may not work in 2025 or beyond.
In 2021, we wrote a blog post about how retirees can determine the assets they need to sustain their income in retirement: Calculating Your Magic Retirement Number – Tall Oak Capital Advisors. We want to revisit this topic and share updated insights four years later. While the core principles of retirement planning remain the same, evolving economic conditions—such as rising inflation, fluctuating interest rates, and shifting market trends—have reinforced the need for a more flexible and personalized approach.
At Tall Oak Capital Advisors, we believe retirement planning shouldn’t be a one-time calculation. Your retirement needs are dynamic, and the strategy that secures your financial future should evolve with you.
So, let’s get to the real question: Are you still on track?
Key Factors in Calculating Your Retirement Needs
To determine how much you’ll need to retire comfortably, consider these five essential questions:
1. How long will your income need to last?
Most people use life expectancy as a benchmark, but relying on averages can be risky. Many individuals live well beyond the projected lifespan, so your retirement plan should prepare for a longer-than-expected timeframe. Instead of planning based on an “average” retirement length, it is sensible to focus on building a financial cushion that accounts for longevity.
2. What income will you need?
The traditional rule of thumb suggests that retirees need 70% of their pre-retirement income, assuming lower taxes and fewer expenses. However, real-life retirement often looks different. Travel, supporting family members, healthcare costs, and lifestyle choices can all drive expenses higher than expected. A better approach is personalizing your retirement income estimate based on your goals, expected costs, and potential future needs.
3. What investment growth should you expect?
Many retirees follow the “100 minus your age” rule, which suggests that a 70-year-old should hold 30% stocks and 70% bonds. While this may have worked in past decades, today’s economic environment demands a more nuanced approach. With interest rates fluctuating and retirees living longer, a balanced portfolio that includes growth assets and fixed-income alternatives can be essential to maintaining purchasing power and generating sustainable income.
4. How will inflation impact your retirement?
Since our original post in 2021, inflation has become a significant concern. The assumed 2% annual inflation rate no longer feels sufficient, as recent years have seen inflationary spikes well above that threshold. A well-structured retirement plan must account forvarious inflation scenarios, particularly in essential categories such as healthcare, housing, and everyday expenses.
5. What will your tax rate be in retirement?
It’s easy to assume that tax rates will remain steady, but government policies and personal circumstances can change over time. For example, income-splitting strategies that benefit couples may no longer apply if one spouse passes away, potentially increasing the surviving partner’s tax burden. A forward-looking tax strategy should factor in potential shifts in tax brackets, withdrawal strategies, and estate planning considerations.
Why Online Retirement Calculators Fall Short
While online calculators provide quick estimates, they fail to capture the full picture of retirement planning. Many use outdated assumptions and ignore:
- Market fluctuations and investment performance
- Personalized inflation scenarios
- Tax planning and withdrawal strategies
- Unexpected life events and financial needs
At Tall Oak Capital Advisors, we take a more advanced approach.
The Retirement VIEW Strategy: A Smarter Way to Plan
Instead of giving you a single “magic number,” our Retirement VIEW Strategy runs 10,000 different scenarios to stress-test your financial future.
- We adjust for real-life factors, like inflation, taxes, and healthcare costs.
- We model essential, discretionary, and luxury expenses, so you understand different spending levels.
- We update and refine your strategy over time, ensuring you remain financially secure at every stage of retirement.
This isn’t just for those approaching retirement—it’s an ongoing process that continues throughout retirement, providing financial stability and peace of mind.
Beyond the Magic Number: Building a Dynamic Plan
Rather than fixating on a single number, the best retirement plans are adaptive, designed to evolve as your life and economic conditions change.
Life is unpredictable, but your financial security doesn’t have to be. With the right planning approach, you can confidently navigate retirement—no matter what happens next.
At Tall Oak Capital Advisors, our goal is simple: to reduce financial stress and answer the most important question every retiree asks—”Am I okay?”
📅 Schedule a complimentary discovery meeting today. Let’s build a tailored retirement strategy that reflects your goals.
The views expressed in this commentary are those of Tall Oak Capital Advisors as at the date of publication and are subject to change without notice. This commentary is presented only as a general source of information and is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax or legal advice. Statistics, factual data and other information are from sources Tall Oak believes to be reliable but their accuracy cannot be guaranteed. This commentary is intended for distribution only in those jurisdictions where Tall Oak Capital Advisors are registered. Securities-related products and services are offered through Raymond James Correspondent Services Ltd., member Canadian Investor Protection Fund. Insurance products and services are offered through Gryphin Advantage Inc., which is not a member-Canadian Investor Protection Fund. This commentary may provide links to other Internet sites for the convenience of users. Tall Oak Capital Advisors is not responsible for the availability or content of these external sites, nor does Tall Oak Capital Advisors endorse, warrant or guarantee the products, services or information described or offered at these other Internet sites. Users cannot assume that the external sites will abide by the same Privacy Policy which Tall Oak Capital Advisors adheres to.
