Here’s 1 big money move that sets rich American retirees apart from other seniors — do it now to rocket up the wealth ladder

How a financial plan drives your retirement

Many retirees wonder if they’re saving enough or putting their money in the right places. A plan, typically guided by a fiduciary certified financial planner, answers those questions with precision, showing you how to optimize your 401(k), IRA, or Health Savings Account (HSA) to take full advantage of tax benefits. It also ensures you’re not leaving money on the table when it comes to employer matches or overlooked savings opportunities.

Next, it addresses your lifestyle. No two retirements are the same: Whether you envision traveling the world, downsizing to simplify your expenses, or picking up part-time work, a financial plan aligns your income with your personal goals.

It also prepares you for rising costs in critical areas like health care, which Fidelity estimates will cost the average 65-year-old retiring in 2024 around $165,000 over their lifetime. With medical expenses rivaling inflation — WTW’s Global Medical Trends Survey anticipates a 10.2% increase in U.S. medical costs in 2025 — planning ahead can mean the difference between staying afloat and struggling to cover basic needs.

Risk management is another essential piece. A more diversified investment strategy is likely to offer better risk-adjusted returns compared to familiar approaches like passive exposure to the S&P 500 Index, a recent outlook from Morgan Stanley found. Diversification acts as a hedge against market downturns, economic uncertainty, future inflation spikes, even your own longevity.

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Taking the first steps

Building a financial plan doesn’t have to be overwhelming. Start by setting clear goals. Ask yourself: What do I want my retirement to look like? Do I want to retire early? Travel frequently? Leave a financial cushion for my family?

Define your goals: Write down what you want to achieve with your financial plan, whether that’s retiring early, paying off debt, or saving for travel. Assess your financial situation: Gather your key financial documents, including bank statements, retirement accounts, and a summary of income and expenses. Research CFPs: Look for a fiduciary CFP who’s legally bound to act in your best interest. They offer unbiased advice, prioritize your goals, and often work on a fee-only basis to avoid conflicts of interest. The National Association of Personal Financial Advisors (NAPFA) is a great place to start. Ask questions: Inquire about the CFP’s fees (flat, hourly, or percentage-based), specialties, and approach to financial planning. Schedule a consultation: Most financial planners offer a free initial meeting. Use this time to discuss your goals and see if they’re a good fit. Take action: Commit to your first steps, like setting a budget, adjusting savings contributions, or consolidating accounts based on their advice.