April is Financial Literacy Month, which means it’s a great time to revisit the basics and take a closer look at your long-term financial plan. The earlier you build a strong foundation, the better equipped you are to make informed decisions, protect what you earn, and grow your savings over time. Whether retirement is close by or still a long way off, here are 10 important things to know about retirement.
- Retirement is a process, not a single date
A happy and fulfilling retirement means different things to different people. Likewise, the journey there is just as unique. Many people transition gradually, working part-time or adjusting their timeline, whether due to financial necessity or lifestyle choice. The Bureau of Labor Statistics notes that more Americans are including work as part of their retirement plans. If you claim Social Security before full retirement age, benefits may be reduced if your earnings are above certain limits. Understanding how claiming age, income, and Social Security rules interact can help you plan smarter and avoid surprises.
- How much you’ll need for retirement
The amount you need depends on your lifestyle, health, expected retirement age, and income sources. Focus on what you actually expect to spend, not just your current income. Some costs, like commuting, may drop, while others, like healthcare, may rise. Consider how long your retirement may last, the effects of inflation over time, and any other income sources such as Social Security, pensions, or investments, which can help reduce how much you need to save but should be evaluated within your overall plan. A financial professional can help you make these calculations and adjustments.
- Your retirement could be very long
Many dream of a long retirement, but few realize just how long it could last. Since 1980, the number of Americans aged 90 and older has nearly tripled. Women tend to outlive men, and a 65-year-old today can expect almost two more decades of life on average. If you retire at 62 and live to 95, your retirement could last 33 years, far longer than many people’s working careers.
- Retirement is a bit different for women than for men
Retirement can be more challenging for women for several reasons. Women generally live longer than men, which can mean higher healthcare and long-term care costs. Additionally, women are more likely to take career breaks (caregiving for children or elderly relatives) and earn less over their lifetimes, leading to smaller Social Security benefits and retirement savings. As a result, women often face larger income drops and greater retirement security gaps than men.
- Healthcare costs can add up
Planning for medical expenses, including Medicare coverage, is essential. According to Fidelity’s 2025 Retirement Health Care Cost Estimate, a 65-year-old couple retiring today may need about $315,000 to cover healthcare costs in retirement, not including long-term care. A single retiree might need roughly $150,000. Being covered by Medicare can make a big difference, so it’s important to understand your options and make informed decisions to avoid costly mistakes.
Staying healthy may not be at the top of your retirement to-do list, but it should be. Better health can reduce healthcare costs and help your savings last longer. This means preparing healthier meals, staying active, and routinely seeing your healthcare providers for checkups.
- Taxes don’t go away in retirement
Many retirees assume their income will be tax-free, but that’s not the case. Withdrawals from traditional accounts like 401(k)s and IRAs, as well as portions of Social Security, may be taxed, while Roth accounts can offer tax-free withdrawals if certain conditions are met. Additionally, you’ll still face sales taxes on things you buy and property taxes on property you own. If you don’t plan for taxes, you could end up withdrawing more than expected, which can reduce how long your nest egg lasts.
- Senior discounts are one of the major retirement perks
Senior discounts are widely available across retail, groceries, entertainment, dining, travel, and healthcare. While Medicare eligibility begins at 65, many discounts start as early as age 55, with others beginning at 60. Some offers may require an AARP membership or proof of eligibility, such as SSI. Remember that there is no legal requirement to offer discounts to seniors, so it pays to ask before purchasing.
- You still need an emergency fund
Few of us head into retirement expecting the worst, but sometimes it happens. Financial emergencies happen in all phases of our lives, and it’s vital to be able to take care of them without raiding retirement coffers or other important accounts. Your car might suddenly need a $2,000 repair, for example, or your roof might develop a leak.
- Understand your retirement accounts and RMDs
Different retirement accounts are taxed in different ways, and understanding these rules can have a significant impact on your savings. Your choice between traditional and Roth accounts should consider your current tax bracket, expected future income, and overall financial goals. Additionally, health savings accounts (HSAs) can offer unique tax benefits when used for qualified medical expenses in retirement.
At age 73, you’re required to take annual RMDs from all traditional (non-Roth) retirement accounts, including IRAs, 401(k)s, and similar plans. RMDs aren’t automatic, so you must proactively take them, generally by December 31, except for your first RMD, which can be delayed until April 1 of the year after you turn 73. Missing the deadline can result in income taxes plus a 25% penalty.
- Your retirement plan should evolve over time
Retirement planning isn’t static. Life circumstances, tax laws, market conditions, and personal goals change over time, so your plan needs to adapt accordingly. Working with a professional provides informed guidance to help you adjust strategies, optimize investments, manage risks, and seize opportunities you might otherwise miss.
Contact us today to get the guidance you need for a secure retirement.
Sources:
- https://insights.smartasset.com/7-of-the-biggest-rmd-mistakes-people-make
- https://home.treasury.gov/news/featured-stories/spotlighting-womens-retirement-security
- https://www.retirementliving.com/aging-in-place/life-expectancy-statistics
- https://legalclarity.org/how-many-years-does-the-average-person-collect-social-security/
- https://www.aarp.org/money/retirement/steps-to-take-before-you-retire/?msockid=38e0a92211f36c2300d0bfa510206d73
- https://www.investopedia.com/terms/r/retirement-planning.asp
- https://newsroom.fidelity.com/pressreleases/fidelity-investments–releases-2025-retiree-health-care-cost-estimate–a-timely-reminder-for-all-gen/s/3c62e988-12e2-4dc8-afb4-f44b06c6d52e
- https://www.seniorliving.org/finance/senior-discounts/
- https://www.thoughtco.com/living-past-90-in-america-3321510
- https://www.fidelity.com/learning-center/wealth-management-insights/cut-retirement-income-taxes
Investment Advisory Services offered through Trek Financial LLC, an investment adviser registered with the Securities Exchange Commission. Information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed, and past performance is no guarantee of future results. For specific tax advice on any strategy, consult with a qualified tax professional before implementing any strategy discussed herein. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability, or usefulness of any information. Consult your financial professional before making any investment decision. Trek 26-93
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