Feeling off track financially for retirement?
You’re not alone.
According to global management consulting firm McKinsey & Company, more than 80% of US pre-retiree households are financially unprepared for a secure retirement.1
Truthfully, traditional retirement tools weren’t built to address today’s financial challenges, increasing the likelihood that retirement plans fall behind.
Today, let’s walk through how you can regain control and get back on track.
Understanding Your Portfolio Income Needs (PIN)
Every retirement planning action and decision revolves around your Portfolio Income Needs (PIN).
Imagine planning a road trip without knowing the destination.
If you don’t know where you’re headed, how can you map out the best route?
Your PIN is your destination, and once you have it, you can determine the right path—whether that means saving more, working longer or adjusting your spending—to get there successfully.
[Resource] Use our Portfolio Income Needs calculator to determine your initial PIN.
After using the calculator, you can receive a free, personalized video from a Rubino & Liang advisor outlining steps for your retirement. Your video is confidential and will be delivered to your email within 3-4 business days.
Once you know your PIN, you can improve your retirement outlook with one of our three approaches: Shortfall, Strengthen or Sharpen.
This article addresses the income Shortfall Framework.
4 Actions To Overcome Retirement Income Shortfalls
Feeling uncertain about having enough money for retirement is stressful.
Fortunately, there are several ways to get your retirement plan back on track. Some are simple adjustments, while others involve more strategic planning.
Take these four actions to close income gaps:
#1—Work Longer
We get it—no one wants to be told to work longer.
Nevertheless, when you do, the benefits are SIGNIFICANT.
Working a few more years allows more time for saving, reduces the number of retirement years to fund, and increases potential Social Security benefits.
Plus, if you have a 401(k) with company matching—that’s FREE MONEY for another few years.
Alternatively, during retirement, you could work part time, turn a hobby into income, or have adult children at home chip in (Why should you pay for everything?!). Just keep in mind that earning taxable income while collecting social security may trigger additional taxes on social security and/or medicare expenses.
Here is an example of how working longer can help if you are in the shortfall framework:
Let’s say Paul, currently age 63, wanted to retire in two years at age 65, but only had $420,000 in retirement savings. When he calculates his Portfolio Income Needs, and realizes he would actually need close to $462,000 in his portfolio to be able to live the lifestyle he wants, he has a few choices to make.
In this example, if he delays retirement by 3 years, his PIN reduces by over $46,000, which sets a better foundation for a successful retirement:
#2—Save More
To save more money for retirement, take these three steps:
Step 1—Boost Retirement Contributions
Maximizing employer-matching retirement plan contributions can SIGNIFICANTLY BOOST your savings and provide meaningful tax advantages.
According to Fidelity Investments, a common employer match formula is a dollar-for-dollar match on the first 3% of an employee’s salary, followed by a 50% match on the next 2%.2
Let’s put this into action…
Using the above percentages, if you earn $150,000 per year and contribute 5% of your salary ($7,500) to your 401(k) plan, you’ll receive an employer contribution of 4% ($6,000), aka Free Money.
This results in a total annual contribution of $13,500.
Since 401(k) contributions are made pre-tax, your taxable income is reduced by your $7,500 contribution. Assuming a 24% federal income tax rate, this translates to $1,800 in tax savings, effectively lowering the net cost of your $7,500 contribution to $5,700.
Let’s break this down into a simple chart. The RED is essentially free money.
| Boost Retirement Contributions | |
| Your Contribution (5%): $150,000 Salary × 5% = | $7,500 |
| Employer Match (100% of first 3%): $150,000 × 3% = | $4,500 |
| Employer Match (50% of next 2%): ($150,000 × 2%) × 50% = | $1,500 |
| Total Employer Contribution: $4,500 + $1,500 = | $6,000 |
| Total Contribution (You + Employer): $7,500 + $6,000 = | $13,500 |
| Tax Savings (24% on Your Contribution): $7,500 × 24% = | $1,800 |
| Net Cost After Tax Savings: $7,500 – $1,800 = | $5,700 |
Step 2—Exhaust Catch-Up Contributions
It’s essential to use catch-up contributions, ultimately filling income shortfalls.
For 2025, the standard contribution limit for 401(k) plans is $23,500. But, if you’re aged 50 or older, you can contribute an additional $7,500 (aka catch-up contribution), bringing your total contribution to $31,000.
THIS NEXT BIT IS HUGE NEWS…
If you’re aged 60 to 63, the catch-up contribution limit increases to $11,250, allowing a total contribution of $34,750 to your 401(k) in 2025.
(For Individual Retirement Accounts (IRAs), the contribution limit remains at $7,000 in 2025. But, those aged 50 and over can make an additional catch-up contribution of $1,000, totaling $8,000.)
Step 3—Optimize Unplanned Money
Unexpected cash—like tax refunds, year-end bonuses or surprise gifts—is a great chance to PAD YOUR RETIREMENT SAVINGS.
Since you weren’t counting on it for daily expenses, why not do your future self a favor and stash it in your 401(k) or IRA?
And don’t stop there—bigger windfalls, like an inheritance or legal settlement, can be game-changers for your retirement. Instead of spending it all, invest a portion in tax-advantaged accounts.
Remember…
EVERY DOLLAR you save starts working for you through compound interest—money that grows without you lifting a finger!
#3—Spend Less in Retirement
Again, we get it—no one likes being told to cut back.
But let’s be real—trimming expenses is one of the fastest, easiest ways to make your money last longer.
When planning for retirement, focus on needs over wants—you’ll naturally spot easy ways to cut costs.
Here are some ways to free up significant cash while retired:
> Trim unnecessary subscriptions: Ideally, you’ll be outside and on the go enjoying yourself.
> Share a vehicle: According to AAA’s 2024 Your Driving Costs study, the average annual cost to own and operate a new vehicle is $12,297. This includes fuel, maintenance, insurance, license fees, registration, taxes, depreciation and finance charges. (That’s $12,297 you can leave in your brokerage account!)
> Downsize or move to a more affordable area: This isn’t a simple decision, but lowering housing costs can free up retirement savings for travel, hobbies and other priorities.
> Embrace off-peak travel: Traveling off-season can save you big. For example, Europe trips average $4,000 from November to April versus $7,300 in summer!3
> Trim your phone and internet bills: Do you really need all the extras in retirement?
There are countless ways to cut expenses. Get started with our Monthly Budget Worksheet.
#4—Combination of the Above
When you mix all three strategies—working longer, saving more and spending less—you’ll close retirement income gaps faster.
Going back to Paul’s situation, he calculated his PIN to realize he was in the shortfall framework, and he would have to delay retirement by 3 years to have his PIN roughly match his current amount of retirement savings.
Looking at Paul’s current age (63), let’s note that he could strategize ways to save more in ADDITION to delaying retirement. Paul can get to a point where he can retire before 68.
If at age 63 Paul has $420k in retirement savings, and he contributes an extra $15k per year into his retirement over the next three years, he will have $465k in his accounts by age 66.
While this is still not his ideal retirement age of 65 – he will have reached his needed PIN amount only one year later, as opposed to having to wait until 68.
This helps guide Paul in addressing his situation now – by understanding what his portfolio income needs are, and knowing what actions he can take to help improve his retirement situation, Paul can put actions in place to help him retire with added confidence.
Once you’ve realized you have that minimum needed to address your portfolio income needs, you can move into the next framework (Strengthen) and tackle other income optimization by fine-tuning your tax strategy, including:
- Leveraging lower tax rates now and in retirement.
- Withdrawing wisely—tapping the RIGHT retirement accounts at the RIGHT time can help reduce your tax bill.
Optimizing taxes is a major retirement challenge. If you haven’t planned for it yet, this tax-planning resource will help cut your tax bill.
Final Thoughts
You’re not alone if you think your retirement isn’t on track.
But, the good news is YOU HAVE OPTIONS.
By working longer, saving more, spending less and making strategic tax moves, you can close the income gap and regain confidence in your future.
The key is taking action—and the sooner, the better.
Calculating your PIN now gives you more time to make adjustments, and those tweaks might be far MORE MANAGEABLE than the drastic changes you’d need if you were hoping to retire this year.
Planning ahead makes a difference!
If you’re feeling overwhelmed by all the choices and decisions, then check out our 365 Retirement Plan. It’s easy and reduces stress.
(If you don’t enjoy talking about finances, then there’s a 44% chance you’ll find our article about disclosure anxiety helpful, since 44% of Americans say personal finances are the most challenging conversation anyone can possibly have.)
