What's Your Number?
As you approach retirement, the number that matters most is the dollar amount of investments you’ll need to live your desired lifestyle, after your working days are over, without worrying about running out of money.
Here’s a simple, back-of-the-envelope formula to calculate your number:
![(Annual Household Expenses ÷ (1 - Estimated [All-in] Income Tax Rate) ÷ (Estimated Rate of Total Return – Estimated Inflation Rate)](https://www.sandenestrategies.com/wp-content/uploads/2026/02/Sandene-Q4-Social-Posts-29.png "Sandene Q4 Social Posts (29)")
The Less-Than-Practical Approach
The assets required to fund a retirement calculated by this formula are quite high. That’s because this simple method tries to replicate spending only part of each year’s income and capital gains, allowing the principal value of your investments to grow at an estimated rate of inflation.
As a result, this method approximates never depleting the principal of your investment assets and giving your household an annual cost-of-living increase on your expenses. When you die, your heirs and beneficiaries receive your assets.
The Down-to-the-Wire Approach
At the other end of the retirement calculation spectrum is dying with your ‘last two nickels covering your closed eyes’, leaving your heirs and beneficiaries nothing. The obvious risk with this method is you don’t know the date of your death.
A Practical Approach
The more useful and practical approach for retirement planning is a cash flow-based plan that satisfies your lifestyle and personal fulfillment needs while giving consideration to your legacy and charitable desires.
Sandene Strategies'
Let's Get to Work
At Sandene Strategies, our proprietary process for creating your customized financial plan is Your 360° Future™ Blueprint, a cash flow-based, comprehensive analysis of your entire financial and life scenarios.