A Smart Framework for Determining Your Number
When planning your retirement in the Colorado Springs region—whether you’re living in Briargate, Old Colorado City, Powers Corridor or the surrounding areas, the big question is: how much is enough? There’s no one-size-fits-all answer. It depends on your lifestyle, your goals, your health, your location, and a few key assumptions about how long you’ll live and how you’re going to spend your money.
1. Start with Your Desired Lifestyle
Your “enough” number begins with understanding how you want to live once you stop working. Ask:
- Will you maintain your current home here in Colorado Springs or downsize/move?
- Do you plan to travel Colorado, ski or use mountain recreation regularly?
- Will you expect new expenses for hobbies, volunteering, outdoor activities or grand-kids?
- Will your cost of living change significantly—e.g., moving from city to rural or maintaining the same home?
Estimate your spending now: for example, if you spend $6,000/month today, your target might be $5,000–$6,500/month in retirement (assuming modest changes). Over 25–30 years, that adds up significantly.
2. Consider Longevity—and Plan Accordingly
In the United States and Colorado specifically, people are living longer and healthier lives. That means planning for age 90, 95 or more is realistic. If your retirement might last 30-35 years or more, your “enough” number needs to be larger than traditional models. For instance, if you target $60,000/year for 30 years, you’re looking at $1.8 million (before inflation) in today’s dollars. Then add inflation, investment performance, and risk.
3. Factor in Investment Growth, Withdrawals & Safe Rates
A common guideline is the “4% rule” (withdraw 4% of your portfolio the first year, then adjust for inflation). But given market inflation, longer horizons and Colorado Springs’s rising cost of living, you may want to target a more conservative rate—say 3–3.5%.
Example: If you want $60,000/year, at 3.5% that implies ~$1.7 million portfolio. If your target is $50,000/year, at 3.5% you’d need ~$1.43 million.
Your “enough” number should reflect your growth expectations, portfolio mix and risk tolerance—not just a static target.
4. Location Matters—Colorado Springs Specifics
Living in Colorado Springs brings unique considerations:
- Housing equity: Will you stay in the home you own? Downsize? Relocate? The value and equity of your local property affect your planning.
- Cost of living: Though Colorado Springs is more affordable than Denver, there are still higher housing, property tax, utility and lifestyle costs compared to national averages.
- Outdoor lifestyle: Many residents integrate travel, skiing or mountain recreation—these costs can add up.
- Healthcare & aging: Local medical systems are strong, but healthcare costs are increasing rapidly. That means budgeting for more than the national “average.”
Because of these local dynamics, when you calculate how much is enough, adjust your model to your Colorado Springs “standard of living”, not a generic national figure.
5. Build Your Personalized “Enough” Worksheet
Here’s a quick worksheet:
- Step A: Estimate your target annual retirement spending (e.g., $55,000/year).
- Step B: Decide your retirement horizon (e.g., age 65 to 95 = 30 years).
- Step C: Choose a safe withdrawal rate (e.g., 3.25 or 3.5%).
- Step D: Required portfolio = Target annual spending ÷ Safe withdrawal rate.
- E.g., $55,000 ÷ 0.0325 = ~$1.69 million.
Then layer in other income sources: Social Security, pension, part-time work, rental income. Subtract those from your target to reduce required savings. Then consider your home equity and how it fits in.
- E.g., $55,000 ÷ 0.0325 = ~$1.69 million.
6. Account for Inflation, Lifestyle Adjustments & Tax Efficiency
- Inflation: Even at 2–3% per year, after 20 years the cost of living can double. Plan investments accordingly.
- Portfolio mix: You still need growth to beat inflation—relying solely on bonds may erode purchasing power.
- Withdrawal strategy: Consider dynamic withdrawals (less in down years, more in strong years) to extend longevity of assets.
- Tax planning: How you pull money from tax-deferred, tax-free (Roth) and taxable accounts matters. In Colorado, state tax considerations and local tax laws may affect net spendable income.
7. Review & Adjust Regularly
Your “enough” number isn’t set in stone. Markets change, taxes change, cost of living changes, your health changes. Plan to review your strategy annually and after major life events: retirement of spouse, home sale, major medical event, market correction. Adjust your goals and assumptions accordingly.
8. Don’t Go It Alone—Use Professional Guidance
Bringing together lifestyle goals, investment strategy, tax planning, and income planning can get complex—especially in Colorado Springs with its unique cost, lifestyle and housing factors. An advisor who knows the region can help you translate your “enough” number into a clear plan, track progress, and adjust course as life evolves.
Ready to Define Your “Enough” Number?
At Concerto Financial, we specialize in helping Colorado Springs professionals and families figure out how much is enough to retire with confidence. We’ll walk you through your retirement spending goals, the local cost dynamics, your portfolio strategy, withdrawal decision, and long-term tax and inflation risks. Let’s map a savings and investment plan that aligns with your vision for retirement in Colorado Springs.
Contact us today to schedule a consultation and begin shaping a retirement strategy that fits your lifestyle, goals and unique needs.
Disclosures
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest you discuss your specific situation with a qualified tax or legal advisor.
This material was prepared by NLA Media.