Most people heading into retirement feel pretty good about where they stand, right up until they run the actual numbers. The median retirement savings for Americans aged 65 to 74 sits at around $200,000. The figure most people privately believe they need to retire comfortably in 2026 has climbed to $1.46 million. The distance between those two numbers is the distance between what most people have done and what the smartest ones figured out years ago.
Retiring comfortably is the goal for most working Americans. But about 3 in 5 American workers say their savings are behind where they should be, and 37% describe themselves as significantly behind, according to a 2025 survey by Bankrate. That means if you’re in the other two-fifths, you’re already doing something right. The question is: what, exactly? The signs that someone is making genuinely smart retirement money moves aren’t always the flashy ones. Sometimes they’re the un-glamorous things: the choice made five years ago, the thing you didn’t spend money on, the benefit you decided to wait for.
This list isn’t about perfection. It’s about recognizing the specific habits and decisions that separate financially confident retirees from those white-knuckling it on a fixed income. If most of these describe you, you’re in better shape than you probably think.
1. You Know Your Actual Monthly Spending Number
Most retirees have a vague sense of what they spend. The financially sharp ones know it precisely, down to the category. They can tell you what they spent on groceries, utilities, healthcare, and discretionary items last month without having to think about it, because they review it regularly.
When you’re drawing down a portfolio instead of adding to it, spending surprises are the single fastest way to derail a plan. A retiree who thinks they spend $4,500 a month but actually spends $5,400 will exhaust their savings years ahead of schedule, and won’t realize it until the correction is too late to make painlessly.
The practical habit here is a monthly budget review, not at tax time, not quarterly, but monthly. Knowing where the money went last month is the only reliable way to know how long your money will last next decade.
2. You’ve Built at Least One to Three Years of Cash Reserves
Having enough cash on hand in retirement to pay for one to three years of living expenses is broadly recommended, because it lets you ride out market downturns without being forced to sell investments at a loss. Retirees who don’t have this cushion end up doing exactly the wrong thing at the wrong time: liquidating equities during a correction because the electric bill doesn’t pause for the S&P 500.
This cash reserve isn’t the same as your investment portfolio. It lives in a high-yield savings account or a short-term CD ladder, somewhere accessible and stable. The goal isn’t high returns on this money. The goal is that it’s there when the market isn’t cooperating. CD rates have remained reasonably strong even following recent Federal Reserve rate cuts, making a CD ladder a practical way to lock in competitive returns on money you want nearby.
Retirees who skip this step often feel financially secure right up until the first serious market drop. Then the math changes fast.
3. You Understand Exactly How Your Withdrawal Rate Affects Longevity
Morningstar’s 2025 retirement income research put the starting safe withdrawal rate at 3.9% for a retiree with a 30-year horizon and a 90% probability of not running out of funds. Retirees willing to employ flexible spending strategies, pulling back on withdrawals during down markets and spending a little more when portfolios are up, can push that figure higher.
Treating your withdrawal rate as a living number rather than a fixed rule matters for one specific reason: portfolio losses in the first five years of retirement make running out of money over a 30-year horizon significantly more likely, assuming spending patterns stay the same. That risk has a name in financial planning: sequence-of-returns risk. Knowing it exists, and building a spending plan that accounts for it, separates the prepared from the anxious.
If you’ve sat down with your actual numbers and identified the withdrawal rate your portfolio can sustain across different market scenarios, you’re ahead of the majority.
4. You’ve Accounted for Long-Term Care Costs
Most people know long-term care is a risk. Far fewer have actually done anything about it. A 2025 provision now allows savers under 59½ to withdraw up to $2,500 per year from IRAs, 401(k)s, and other retirement plans without penalty to cover premiums for a qualifying long-term care policy. If you haven’t reviewed what this SECURE 2.0 Act change means for your own coverage, that conversation with a financial advisor is worth having this year.
Long-term care costs have a way of arriving as a single large event that overwhelms otherwise solid retirement plans. Retirees who have planned for them, whether through long-term care insurance, a dedicated account, or a Medicaid-conscious estate plan, have removed one of the most financially catastrophic variables from their future. The ones who haven’t tend to discover the oversight at the worst possible moment.
5. You Haven’t Claimed Social Security at 62
Claiming Social Security the moment you’re eligible at 62 is the most common costly mistake retirees make, and the most irreversible. Every year you delay beyond your full retirement age adds roughly 8% to your monthly benefit, up to age 70. A retiree who waits from 62 to 70 can receive a benefit that’s more than 75% larger every single month for the rest of their life.
AARP reports that Social Security recipients received a 2.8% cost-of-living adjustment in January 2026, with the average monthly retirement payment increasing by an estimated $56, from $2,015 to $2,071. That COLA is calculated on your existing benefit, which means the higher your base benefit, the more that 2.8% is actually worth in dollar terms. Delaying to maximize your base payment also maximizes every future COLA.
The retirement money moves that work here tend to bridge the gap between retirement and age 70 using portfolio withdrawals or part-time income, then switch on a maximized Social Security check as a permanent foundation.
6. You’re Not Ignoring the Medicare Premium Increase
Medicare Part B premiums rose 9.7% in 2026, from $185 to $202.90 a month, and since most enrollees have their premiums deducted directly from Social Security, this increase effectively reduces the COLA for most retirees. The 2.8% Social Security raise looks a lot less useful when $17.90 of it is immediately handed back in healthcare premiums.
Premiums are higher for retirees with incomes above $109,000 individually or $218,000 for couples filing jointly in 2026, and the annual Part B deductible also increased from $257 in 2025 to $283. Retirees who watch their income carefully, including retirement account withdrawals that could push them into a higher IRMAA (income-related Medicare surcharge) bracket, are making smarter decisions about when and how much to withdraw each year.
If you’ve never heard of IRMAA before and you’re drawing from a traditional IRA or 401(k), it’s worth understanding how it’s calculated. Your Medicare premiums two years from now are based on your reported income today.
7. You Have Income From More Than One Source
Retirees who depend entirely on Social Security are structurally vulnerable in a way that even modest diversification can fix. The ones doing well financially in 2026 typically draw from at least two or three streams: Social Security, a pension or annuity, portfolio withdrawals, and sometimes part-time income or rental income.
Over half of American households, 54%, report having no dedicated retirement savings, according to the Federal Reserve’s Survey of Consumer Finances. For those households, Social Security isn’t supplemental, it’s the whole plan. Retirees who deliberately built a second and third income stream before leaving work have a margin for error that one-source retirees simply don’t have. When one stream dips, the others absorb the impact.
Building multi-source income doesn’t require complicated investing. A small rental property, dividends from a taxable brokerage account, or even a few hours a week of consulting work can meaningfully change how long your savings last. Locking that redundancy in before you retire, not after, is what financially prepared retirees consistently get right.
8. You’re Using Tax-Advantaged Accounts Strategically
The total 401(k) savings rate remained steady at 14.2% in Q4 2025, holding at a record high for a third consecutive quarter, though the gap between non-savers and savers continues to grow. Smart retirees aren’t just saving, they’re thinking carefully about which account type holds what, and in what order they draw it down.
A traditional IRA or 401(k) grows tax-deferred but every dollar you withdraw is taxed as ordinary income. A Roth IRA grows tax-free, and qualified withdrawals are entirely tax-free in retirement. People making genuinely good retirement money moves are sequencing their withdrawals to minimize taxes across a 20 or 30-year retirement, not just next April. In 2026, you can contribute $7,500 to an IRA if you’re under 50 and $8,600 if you’re over 50, and up to $24,500 to a 401(k) if you’re under 50, with the super catch-up contribution limit for ages 60 to 63 set at $35,750.
If you haven’t thought about whether a Roth conversion makes sense before your required minimum distributions begin at 73, it’s a conversation worth having while tax rates and your income situation are both visible.
9. You’ve Reviewed Your Estate Documents Recently
Beneficiary designations override wills. Most people don’t know that, or they know it abstractly and still haven’t updated their IRA or 401(k) paperwork since a marriage, divorce, or the birth of a grandchild. A retiree who wrote their estate plan in 2010 and hasn’t touched it since may be unintentionally leaving money to an ex-spouse, a minor, or someone who predeceased them.
The smart money move here isn’t hiring an attorney every five years. It’s reviewing the actual documents, the will, the trust if there is one, the beneficiary forms on every account, once a year. It takes an afternoon. Retirees who do this aren’t thinking about it as a morbid exercise. They’re thinking about it as making sure years of savings actually reach the people they intend. Outdated estate documents are one of the most common and easily preventable financial mistakes retirees make.
Power of attorney and healthcare proxy documents matter just as much. If something happens and these aren’t in place, family members face a legal process that’s expensive, slow, and often distressing.
10. You’ve Done the Math on Your Withdrawal Sequence
The order in which you tap your accounts matters nearly as much as how much you have in them. Drawing taxable brokerage accounts first, then tax-deferred accounts, then Roth accounts last is often the most efficient sequence, though the right approach depends on your tax situation, expected income changes, and when RMDs kick in.
Required minimum distributions from traditional retirement accounts begin at age 73 (or 75 for people born in 1960 or later), and failing to take them on time can trigger a steep penalty. Retirees who’ve mapped out a withdrawal sequence in advance, account by account and year by year, tend to pay dramatically less in taxes over a 20-year retirement than those who simply take money from wherever it’s easiest. The difference in tax burden between a planned and unplanned withdrawal strategy can run into the tens of thousands of dollars.
If you’re still several years from needing RMDs, this is also the window in which Roth conversions can reduce the eventual size of those forced distributions, keeping taxable income lower later in retirement when Social Security benefits are also in the mix.
11. You’ve Stress-Tested Your Plan Against Healthcare Costs
Healthcare in early retirement, before Medicare kicks in at 65, is one of the biggest budget shocks retirees face. ACA marketplace coverage for people aged 62 to 65 averaged between $800 and $1,200 a month in 2025, while COBRA coverage for the same age group ran between $700 and $1,500 a month. For a retiree pulling $35,000 a year from a $1 million portfolio, that’s a third of the annual withdrawal gone before food, housing, or anything else.
The retirees handling this well planned for the healthcare gap years before they reached them. Some stayed in jobs specifically for healthcare coverage until 65. Others used HSA (health savings account) contributions during working years to build a tax-free healthcare fund. The ones who walked into early retirement without a clear healthcare plan found it to be the most expensive oversight of their financial lives.
Post-65, the equation shifts but doesn’t simplify. Medigap policies, Part D drug coverage, and potential long-term care costs still require ongoing attention. A 30-year retirement can accumulate healthcare costs that dwarf everything else on the spending ledger.
12. You Review Your Finances More Than Once a Year
The single biggest behavioral difference between retirees who feel financially confident and those who feel perpetually anxious is not their account balances. It’s how often they look at their plan. Retirees who check in on their finances at least quarterly, adjusting for actual spending, market changes, and any life events, are in a position to make small corrections before they become large problems.
According to Kiplinger, Americans now believe they need $1.46 million to retire comfortably in 2026, up $200,000 from the $1.26 million figure from 2025, yet the median savings for those near or at retirement age remain far below that target. The people who close that gap aren’t necessarily the highest earners. They’re the ones who stayed engaged with the numbers consistently over time, made adjustments when something shifted, and didn’t assume that setting up a 401(k) in their forties meant the work was done.
An annual review isn’t enough in retirement. Markets move. Medicare premiums change. Tax laws are rewritten. A retiree who reviews their situation once a year is always reacting; one who reviews it quarterly is usually adjusting. That difference compounds, slowly and then all at once.
Read More: 14 Things You Should Always Do 2 Years Before You Retire
What None of This Requires
What’s notable about this list is what’s not on it. There’s no mention of picking the perfect stock, timing the market, or finding an obscure investment strategy that outperforms. The retirees who are genuinely ahead aren’t there because of luck or extraordinary returns. They got there by doing the unsexy things consistently: knowing their spending, building reserves, understanding how their accounts interact with taxes, and staying informed about how the rules change year to year.
The gap between financially stressed retirees and financially secure ones is rarely a gap in intelligence. It’s mostly a gap in attention and planning. The $200,000 shortfall in how much people think they need versus how much they’ve actually saved is mostly made up not in one brilliant move, but in dozens of small decisions made well over a long period of time. The people who took Social Security at 62 because they could, who never reviewed their Medicare coverage, who assumed their estate documents were fine, who kept all their savings in a single account type and never thought about sequencing – those habits compound into real vulnerability. The opposite habits compound into something that actually lasts.
AI Disclaimer: This article was created with the assistance of AI tools and reviewed by a human editor.