Retirement Planning 101: The First Steps You Should Take 

Admin • December 1, 2023

Have you ever been up against a really tough challenge? Not the kind of challenge that’s overly complicated, physically demanding, or seemingly unattainable — the kind that demands a shift in your habits and maybe even the dismantling of mental barriers to progress to the next level.

Your mind may naturally wander to things like maintaining a healthy diet or sticking to a gym routine. However, if you sit with this question, your thoughts may gravitate towards other unquestionably essential things, such as planning for retirement.

Think about it: opening up a retirement account or setting up automatic contributions, the very basics of preparing for retirement, isn’t all that challenging. Yet, many of us find excuses to put it off for another day.

“I’ll start saving when I make more money.”

“Who knows what tomorrow holds? I’m living life on my terms now, and I’ll deal with retirement later.”

“It all feels overwhelming, and I have no clue where to start.”

While those thoughts may hold some validity, they often become excuses to procrastinate on planning for something that will inevitably come. Even if we delay retirement or opt to work part-time during retirement, the fact remains that a time will come when we are no longer physically or mentally fit for employment, and the time to prepare for that day is now .

Steps in Retirement Planning

So, where do you start if the enormity of it all feels too much to handle? Fortunately, taking small steps is not only allowed but encouraged. And if you’re asking, “What are the first steps of retirement planning?” —we’ve got you covered with four steps you can start taking today! 

1. Define What Retirement Means to You

If you’re in the early stages of your career, it’s natural for your retirement goals to shift many times before you retire. However, even if you don’t have all the answers, it’s still important to think about what retirement means to you right now.

For some, retirement might mean achieving a work-optional lifestyle, meaning they have the flexibility to retire by a certain age, even if they intend to continue working because they genuinely love their work. Others may aim for a more definitive retirement age, at which point they focus on a passion project or volunteering their time.

Here are a few questions to help you start thinking about what retirement means to you:

  • What’s your ideal retirement age? ( Hint: It doesn’t have to be the traditional age of 65. You’re allowed to dream while still staying grounded in reality.)
  • Where do you want to live? Do you want to stay put, move to a tax-friendly state, or move abroad for a lower cost of living?
  • Do you have a passion project in mind, like launching a non-profit or turning your hobby into a business that you can hand down to the next generations?

Remember, it’s okay if your goals evolve with you. It’s better to adjust your goals as your circumstances and dreams change rather than do nothing because you have no vision for the future.

2. Estimate Your Anticipated Expenses

This step in retirement planning can feel hazy, given the many variables that can change between now and retirement. However, a practical starting point is assessing your current spending.

Make a list of your current expenses and determine which ones you’ll realistically maintain in retirement and which you won’t, or which might increase or decrease in retirement. Remember to factor in inflation, medical expenses, and some things you aspire to do in retirement.

Here are some questions to inspire your imagination about what you might want and need to budget for in retirement:

  • What are some things you want to experience in retirement? For example, do you plan to travel extensively while you’re still in good health?
  • Is there someone or something you’d like to financially support, such as an organization close to your heart or your grandchildren?
  • Is there anyone who would be able and willing to take you in if there comes a time when living independently becomes challenging, or do you envision a scenario where you might require care in a nursing home?

Depending on where you are in life right now, it might be too soon to have a solid answer to some of these questions. However, they are meant to get you thinking about how you may want and need to manage your finances during retirement. 

3. Assess Your Current Financial Situation

This step may be challenging because we’re shifting the focus from dreaming about what’s possible to facing reality. However hard it may be, you need to clearly understand where you are today to plan for where you want to go.

To gauge your retirement readiness, you can start with these steps:

  • List all your retirement accounts, including their respective balances and ongoing contributions.  

This list should include everything from employer-sponsored plans like a 401(k), self-employed retirement plans such as a Solo 401(k) or SEP IRA, personal retirement accounts like IRAs, and even non-retirement accounts that you’ve earmarked for retirement, like investment or savings accounts.

  • Review your investment portfolio to ensure it aligns with your age, risk tolerance, and goals. 

Some mistakenly believe they’ve covered all the bases by simply contributing to a retirement account, but there’s more to it. While retirement accounts offer tax advantages, if your retirement funds are parked in cash, your returns won’t be much different than leaving your cash in a savings account earning a meager 0.3%.

A more aggressive approach to investing is typically suitable when you’re younger because you have more time to take risks for greater rewards and recover from market setbacks. As you approach retirement age, a conservative approach may be better to preserve your wealth. 

Once you know where you stand, you can take the proper steps to move the needle in the right direction.

4. Determine What Changes Are Needed and Take Action

This step involves some number crunching to determine if you’re on the right track and, if not, how to bridge the gap. While a more in-depth approach may be required, there are many online calculators that allow you to plug in some basic data to get a general idea of your retirement readiness.

In addition to solving for your required contributions and rate of return to meet your goals, you may need to make other changes. For instance, you may need to set up or enroll in a retirement plan.

If you’re employed, start by reviewing your benefits to see what option(s) are available to you; if you’re self-employed, start comparing the various plans available to business owners to determine which best meets your business needs.

Once you’re clear on what needs to be done and you have the means to do it (even if it involves trimming some of your discretionary spending), it’s time to take action. 

Enroll in your employer’s 401(k) plan. Boost your contributions to secure the full employer match. Automate savings to your investment account. There’s no universal guide to retirement, so do what’s necessary and attainable for your circumstances.

Your Retirement Life by Design: Piecing It All Together

While we encourage you to work through these exercises individually, merging all the steps in retirement planning into a comprehensive and well-defined strategy can be challenging.  

The good news is, much like there are specialists for handling your taxes or repairing things around your home, there are retirement planning specialists , too. Retirement planning specialists like the team at Five Pine Wealth can help you develop a clear roadmap with steps in retirement planning to help you achieve your vision.

If the idea of planning for retirement feels daunting, we’d love to chat with you to see if we’re a good fit. Give us a call at 877.333.1015 or send us an email at info@fivepinewealth.com .

At this time, we’re welcoming clients in Spokane and across the nation through our virtual retirement planning services .  Remember, whether you do this independently or opt to team up with a trusted advisor , taking even small steps is far more valuable than taking no action at all.

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You've Maxed Your 401(k). Now What? A Strategic Guide for High Earners

January 26, 2026
Key Takeaways High earners maxing out 401(k)s at $24,500 are only saving about 8% of a $300,000 income in their primary retirement account. The mega backdoor Roth strategy can increase total 401(k) contributions to $72,000 annually with tax-free growth. A comprehensive approach can create nearly $3 million in additional retirement wealth over 20 years. It's 2026. You're checking all the boxes. You're earning upwards of $300,000 annually, and you're maxing out your 401(k) every year. You've reached the $24,500 contribution limit and feel confident about securing your financial future. Then you realize $24,500 represents less than 8% of your income. Over 20 years, this gap adds up to millions in lost opportunity. Thankfully, you're not stuck with the basic 401(k) playbook. There are sophisticated strategies beyond your contribution limit. 5 Strategic Moves for High Earners with Maxed-Out 401(k)s Here are five sophisticated strategies that can help you build wealth beyond your basic 401(k) contributions. All projections assume a 7% average annual return and are estimates for illustrative purposes. 1. Mega Backdoor Roth Contributions If your employer's 401(k) plan allows after-tax contributions, this could be your biggest opportunity. With employee contributions, employer match, and after-tax contributions, the combined 401(k) limit for 2026 is $72,000 ($80,000 if you're 50 or older). The mega backdoor Roth works because you immediately convert those after-tax contributions into a Roth account, where they grow tax-free forever. The catch: Not all employers offer this option. You need a plan that permits after-tax contributions and in-service Roth conversions. The impact: The available space for after-tax contributions depends on your employer match. With a typical employer match of 3-6% (roughly $10,000-$21,000 on a $350,000 salary), you could contribute approximately $26,500-$37,000 annually. At 7% average returns over 20 years, this creates approximately $1.1-$1.5 million in additional tax-free retirement savings. 2. Donor-Advised Funds for Charitable Giving If you're charitably inclined, donor-advised funds (DAFs) offer a way to bunch several years of charitable contributions into one tax year, maximizing your itemized deductions while still spreading your giving over time. You get an immediate tax deduction for the full contribution, but you can recommend grants to charities over many years. The funds grow tax-free in the meantime. The catch: Once you contribute to a DAF, the money is irrevocably committed to charity. You can't get it back for personal use. The impact: Contributing $50,000 to a DAF in a high-income year (versus giving $10,000 annually) can create immediate federal tax savings of $15,000-$18,500 while still allowing you to support the same charities over five years. 3. Taxable Brokerage Accounts with Tax-Loss Harvesting Once you've maximized tax-advantaged accounts, strategic taxable investing becomes your next move. The key is working with a financial advisor who implements systematic tax-loss harvesting throughout the year. Tax-loss harvesting involves selling investments at a loss to offset capital gains elsewhere. Done strategically, this can save thousands in taxes annually. The catch: Long-term capital gain rates (0%, 15%, or 20%) are lower than ordinary income tax rates, but you're still paying taxes on gains. It's less tax-efficient than retirement accounts, but far better than ignoring tax optimization. The impact: For high earners in the 35-37% ordinary income brackets, the difference between long-term capital gains (20%) and ordinary rates is significant. Effective tax-loss harvesting on $50,000 in annual gains over 20 years could save $150,000+ in taxes. 4. Health Savings Account (HSA) Triple Tax Advantage HSAs offer a unique triple tax benefit: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. With 2026 contribution limits of $4,400 for individuals and $8,750 for families, this adds another powerful layer to your strategy. You can invest HSA funds just like an IRA and let them grow for decades. After age 65, you can withdraw the funds for any purpose, medical or otherwise. The catch: You must have a high-deductible health plan to qualify for an HSA. After age 65, non-medical withdrawals are taxed as ordinary income (like traditional IRA distributions), but you still benefit from the upfront deduction and decades of tax-free growth. The impact: Contributing the family maximum ($8,750) annually for 20 years at a 7% average annual return creates approximately $355,000-$360,000 in tax-advantaged savings. 5. Backdoor Roth IRA Contributions Not to be confused with mega backdoor Roth contributions! Even if your income exceeds the Roth IRA contribution limits, you can still fund a Roth through the backdoor method: make a non-deductible contribution to a traditional IRA, then immediately convert it to a Roth IRA. The catch: If you have existing traditional IRA balances, the pro-rata rule complicates things. You may want to consider rolling those funds into your 401(k) first if your plan allows. The impact: Contributing $7,000 annually through the backdoor Roth for 20 years at 7% average annual return creates approximately $285,000-$290,000 in tax-free retirement savings. What Compounding These Strategies Looks Like Over 20 Years Let’s look at approximate outcomes based on a 7% average annual return. 401(k) Only: Annual contribution: $24,500 Total after 20 years: ~$1M 401(k) + Mega Backdoor Roth: Annual contribution: $72,000 Total after 20 years: ~$3M Note: Mega backdoor Roth space varies based on your employer's match. These calculations assume you're maximizing the total annual limit. Comprehensive Approach (under age 50): Mega Backdoor Roth: ~$3.0M HSA: ~$350K-$360K Backdoor Roth IRA: ~$285K-$290K Strategic taxable investing with tax-loss harvesting Total retirement savings: ~$3.6M+, plus taxable investments Comprehensive Approach (ages 50-59): With higher contribution limits and catch-up contributions, total retirement savings can reach ~$4M+ over 20 years. Comprehensive Approach (ages 60–63 with enhanced catch-up contributions) Higher contribution limits during peak earning years allow for meaningful acceleration of retirement savings. The exact impact depends on timing, contribution duration, and existing balances. The Bottom Line The difference between stopping at your basic 401(k) and implementing a comprehensive strategy can approach $3 million or more in additional retirement wealth over time. Why Strategic Coordination Matters These aren't either/or decisions. The most effective approach coordinates multiple strategies while ensuring everything works together. At Five Pine Wealth Management , we help high-earning clients build comprehensive plans that go beyond the 401(k). We coordinate your employer benefits, tax strategies, and investment accounts to create a cohesive approach that maximizes your wealth-building potential. This requires working across several areas: Analyzing your employer's 401(k) plan for mega backdoor Roth opportunities Implementing systematic tax-loss harvesting in taxable accounts Coordinating Roth conversions and backdoor contributions Optimizing your HSA as a long-term retirement vehicle Ensuring charitable giving strategies align with your tax situation Maximizing catch-up contributions when you reach milestone ages As fiduciary advisors, we're legally obligated to act in your best interest. That means we're focused on strategies that serve your goals, not products that generate commissions. Ready to see what's possible beyond your 401(k)? Email us at info@fivepinewealth.com or call 877.333.1015 to schedule a conversation about your specific situation. Frequently Asked Questions (FAQs) Q: Does my employer's 401(k) plan automatically allow mega backdoor Roth contributions? A: No. You need a plan that permits after-tax contributions and in-service conversions to Roth. Check with your HR department. Q: How do I prioritize which investment strategies to use? A: Generally, maximize employer match first (it's free money), then fully fund your 401(k), explore Mega Backdoor Roth if available, max out your HSA, consider backdoor Roth IRA contributions, and then move to taxable accounts with tax-loss harvesting. We can help determine the right sequence for your circumstances.

What's the Best Asset Allocation for Someone 10 Years Away from Retirement?

December 22, 2025
Key Takeaways Your guaranteed income sources (pensions, Social Security) matter more than your age when deciding allocation. Retiring at 65 doesn't mean your timeline ends. You likely have 20-30 years of investing ahead. Think in time buckets: near-term stability, mid-term balance, long-term growth. You're 55 years old with over a million dollars saved for retirement. Your 401(k) statements arrive each month, and you find yourself questioning whether your current allocation still makes sense. Should you be moving everything to bonds? Keeping it all in stocks? Something in between? There's no single "correct" asset allocation for everyone in this position. What works for you depends on factors unique to your situation: your retirement income sources, spending needs, and risk tolerance. Let's look at what matters most as you approach this major life transition. Why Asset Allocation Changes as Retirement Approaches When you’re 30 or 40, your investment timeline stretches decades into the future. When you’re 55 and looking to retire at 65, that equation changes because you’re no longer just building wealth: you’re preparing to start spending it. You need enough growth to keep pace with inflation and fund decades of retirement, but you also need stability to avoid the need to sell investments during market downturns. At this point, asset allocation 10 years before retirement is more nuanced than a simple “more conservative” approach. Understanding Your Actual Time Horizon Hitting retirement age doesn't make your investment timeline shrink to zero. If you retire at 65 and live to 90, that's a 25-year investment horizon. Think about your money in buckets based on when you'll need it: Time Horizon Investment Approach Example Needs Short-Term (Years 1-5 of Retirement) Stable & accessible funds Monthly living expenses, healthcare costs, and early travel plans Medium-Term (Years 6-15) Moderate risk; balanced growth Home repairs, care and income replacement, and helping grandchildren with college Long-Term (Years 16+) Growth-oriented with a Long-term care expenses, decades-long timeline legacy planning, and extended longevity needs This bucket approach helps you think beyond simple stock-versus-bond percentages. Asset Allocation 10 Years Before Retirement: Starting Points While there's no one-size-fits-all answer, here are some reasonable starting frameworks: Conservative Approach (60% stocks / 40% bonds) : Makes sense if you have minimal guaranteed income or plan to begin drawing heavily from your portfolio upon retirement. Moderate Approach (70% stocks / 30% bonds) : Works well for those with some guaranteed income sources, moderate risk tolerance, and a flexible withdrawal strategy. Growth-Oriented Approach (80% stocks / 20% bonds) : Can be appropriate if you have substantial guaranteed income covering basic expenses and the flexibility to reduce spending temporarily as needed. Remember, these are starting points for discussion, not recommendations. 3 Steps to Evaluate Your Current Allocation Ready to see if your current allocation still makes sense? Here's how to start: Step 1: Calculate your current stock/bond split. Pull your recent statements and add up everything in stocks (including mutual funds and ETFs) versus bonds. Divide each by your total portfolio to get percentages. Step 2: List your guaranteed retirement income. Write down income sources that aren't portfolio-dependent: Social Security (estimate at ssa.gov), pensions, annuities, rental income, or planned part-time work. Total the monthly amount. Step 3: Calculate your coverage gap. Estimate monthly retirement expenses, then subtract your guaranteed income. If guaranteed income covers 70-80%+ of expenses, you can be more growth-oriented. Under 50% coverage means you'll need a more balanced approach. When to Adjust Your Allocation Here are specific triggers that signal it's time to review and potentially adjust: Your allocation has drifted more than 5% from target. If you started at 70/30 stocks to bonds and market movements have pushed you to 77/23, it's time to rebalance back to your target. Your retirement timeline changes significantly. Planning to retire at 60 instead of 65? That's a trigger. Every two years of timeline shift warrants a fresh look at your allocation. Major health changes occur. A serious diagnosis that changes your life expectancy or healthcare costs should prompt an allocation review. You gain or lose a guaranteed income source. Inheriting a pension through remarriage, losing expected Social Security benefits through divorce, or discovering your pension is underfunded. Market volatility affects your sleep. If you're checking your portfolio daily and feeling genuine anxiety about normal market movements, your allocation might be too aggressive for your comfort, and that's a valid reason to adjust. Beyond Stocks and Bonds Modern retirement planning involves more than just deciding your stock-to-bond ratio. Consider international diversification (20-30% of your stock allocation), real estate exposure through REITs, cash reserves covering 1-2 years of spending, and income-producing investments such as dividend-paying stocks. The Biggest Mistake: Becoming Too Conservative Too Soon Moving everything to bonds at 55 might feel safer, but it creates two significant problems. First, you're almost guaranteeing that inflation will outpace your returns over a 30-year retirement. Second, you're missing a decade of potential growth during your peak earning and saving years. The difference between 60% and 80% stock allocation over 10 years can mean hundreds of thousands of dollars in portfolio value. Being too conservative can be just as risky as being too aggressive, just in different ways. Questions to Ask Yourself As you think about your asset allocation for the next 10 years: What percentage of my retirement spending will be covered by Social Security, pensions, or other guaranteed income? How flexible is my retirement budget? Could I reduce spending by 10-20% during a market downturn? What's my emotional reaction to seeing my portfolio drop 20% or more? Do I plan to leave money to heirs, or is my goal to spend most of it during retirement? Your honest answers to these questions matter more than your age or any generic allocation rule. Work With Professionals Who Understand Your Complete Picture At Five Pine Wealth Management, we help clients work through these decisions by looking at their complete financial picture. We stress-test different allocation strategies against various market scenarios, coordinate withdrawal strategies with tax planning, and help clients understand the trade-offs between different approaches. If you're within 10 years of retirement and wondering whether your current allocation still makes sense, let's talk. Email us at info@fivepinewealth.com or call 877.333.1015 to schedule a conversation. Frequently Asked Questions (FAQs) Q: What is the rule of thumb for asset allocation by age? A: Traditional rules like "subtract your age from 100" are oversimplified. Your allocation should be based on your guaranteed income sources, spending flexibility, and risk tolerance; not just your age. Q: Should I move my 401(k) to bonds before retirement? A: Not entirely. You still need growth to outpace inflation. Gradually shift toward a balanced allocation (60-80% stocks, depending on your situation) and keep 1-2 years of expenses in stable investments. Q: What's the difference between stocks and bonds in a retirement portfolio?  A: Stocks provide growth potential to keep pace with inflation but come with volatility. Bonds offer stability and income but typically don't grow as much.