"Do I have enough?" is the wrong question. I get it constantly from people in their late fifties, and I understand why. It feels like the question. But it's the question after the question.
The honest version is: enough for what, under what conditions, with what flexibility. A plan that works in average markets with stable health and a smooth Social Security decision is not the same plan that works when one of those three things goes sideways. Stress-testing is what closes the gap.
Here's what I actually test for, and why these three things matter more than the headline number.
Sequence of returns risk
The same average return can produce two completely different outcomes depending on when the bad years arrive. If markets drop 30% in your first year of retirement and you're drawing down, you've crystallized losses you can't earn back the same way. The math is unforgiving.
This is the risk most people don't intuit. Your accumulation years smooth volatility because you're adding money. Your decumulation years amplify it because you're taking money out. Two retirees with the same nest egg and the same average return over twenty years can end up in very different places — one wealthy, one running short — based entirely on the order of returns.
The test I run: what happens to the plan if the first two years of retirement deliver a 20% drawdown each. Not as a forecast. As a stress test. If the plan survives that, the plan survives most things.
The cleanest defense against sequence risk is a cash buffer — typically two to three years of essential expenses — that lets you avoid selling investments during downturns. The buffer costs yield. It buys behavior.
Healthcare timing
Medicare starts at 65. If you retire at 60, you have a five-year gap. That gap is one of the most expensive and most overlooked parts of an early-retirement plan.
Options during the gap: COBRA from a former employer (limited duration, full cost plus admin), a spouse's plan if available, the ACA marketplace through healthcare.gov, or in some cases a private plan. The premium math depends entirely on your modified adjusted gross income for the year.
Here's where pre-retirees get blindsided. If you've planned to do Roth conversions in your gap years to reduce later RMDs, those conversions raise your AGI — which can disqualify you from the premium tax credits that make marketplace coverage affordable. The two strategies fight each other. Most people don't notice until they're already committed.
The test I run: what does total healthcare cost look like across all the gap years, under three different conversion scenarios. The right answer is rarely the one that minimizes lifetime taxes. It's the one that balances tax efficiency against healthcare affordability and the buffer needed for unexpected medical expenses.
Social Security claiming
The default claiming age is 67 for most people in their early sixties today. Filing earlier reduces the monthly benefit permanently. Filing later — up to age 70 — increases it. The increase per year of delay is roughly 8%, which is hard to find elsewhere with that kind of certainty.
But "delay until 70" isn't always the right answer. Health status matters. Spousal benefits matter. Whether you're still working matters. Whether you need the income to bridge to other accounts matters. The claiming decision is one of the few in retirement that you can't reverse.
The test I run: model the plan at three claiming ages — 62, 67, and 70. Look at total lifetime benefits under different life expectancies. Look at what happens to the surviving spouse. Look at whether earlier claiming lets you avoid drawing down investments during early-retirement market risk. The "right" answer depends on which risk you'd rather absorb.
A stress test isn't a calculator. It's a conversation about which risks you can absorb and which you can't. Happy to walk through yours.
Schedule a 30-minute callWhat "enough" actually means
The number isn't a percentage of your salary or a multiple of your expenses. It's the answer to: can your plan survive the worst-plausible version of each of these three risks, simultaneously, while still letting you spend on what you want.
If the answer is yes, you're past "enough" and into the next question — which is what to do with the surplus. If the answer is no, you need to know exactly which lever is short, and by how much.
Common levers that move the math:
- Working one extra year (often more powerful than people expect — adds savings, delays withdrawal, raises Social Security).
- Changing the asset allocation in the five years before retirement, to reduce sequence risk without giving up too much growth.
- Pre-funding healthcare in an HSA while you still have one, and treating it as a retirement medical account.
- Shifting some retirement income from portfolio withdrawals to guaranteed sources (Social Security, pension if you have one, an annuity in some cases) so the portfolio doesn't have to do all the work.
The honest answer
Most people who ask "do I have enough" have enough for the base case. The base case isn't what you're worried about. You're worried about the edges — the bad-market early retirement, the unexpected medical bill, the spouse who outlives you by fifteen years.
The right plan doesn't make those edges disappear. It makes them survivable. That's the standard worth holding your plan to. And five years out is exactly when there's still time to fix what's short.