The end of the year often brings a familiar question: Am I saving enough for retirement, and am I spending too much?
Before you make changes for 2027, there’s a simple place to start: look back at what actually happened in 2026.
Your financial plan may have been built around a certain level of spending, savings and investment returns. But real life doesn’t always follow the plan. Maybe you spent more than expected on travel. Maybe the house needed an expensive repair. Perhaps you had a particularly good year at work and were able to save more. Or maybe your investment portfolio performed differently than you anticipated.
Those experiences can provide valuable information as you decide what to do with your money in 2027.
Did You Spend What You Thought You Would?
One of the most useful year-end exercises is surprisingly simple: look at where your money actually went.
Rather than relying on the budget you created at the beginning of 2026, review your bank and credit card statements and look at your actual spending.
You might discover that your spending falls into three broad categories:
- The necessities: housing, utilities, insurance, groceries and other expenses you can’t easily eliminate.
- The things you enjoy: travel, restaurants, hobbies, entertainment and other discretionary expenses.
The surprises: home repairs, medical expenses, helping a family member or other costs you didn’t see coming. - That last category is particularly important in retirement. Unexpected expenses aren’t necessarily unusual—they’re often part of life.
If you spent $15,000 replacing a roof in 2026, for example, you probably don’t need to budget another $15,000 for the same expense in 2027. But if your insurance, property taxes or regular home-maintenance costs increased, those may be expenses worth incorporating into your ongoing plan.
Did You Save More—or Less—Than Planned?
If you’re still working, take a close look at your retirement contributions.
Did you contribute consistently throughout 2026? Did your income increase? Did you receive a bonus or other unexpected income?
If you regularly had money left over at the end of the month, 2027 could be a good time to increase your retirement savings.
But the opposite is also worth paying attention to.
If you repeatedly had to dip into savings because your normal expenses were higher than expected, simply telling yourself to “save more” in 2027 may not solve the problem. It may be time to revisit the overall balance between saving for the future and spending today.
Don’t Let One Good Investment Year Change Your Lifestyle Overnight
A strong investment year can create a tempting opportunity to increase spending.
But there’s a difference between having a larger portfolio at the end of one year and being able to permanently increase your retirement income.
If your investments performed particularly well in 2026, consider whether the increase in your portfolio changes your long-term plan—or simply gives you a little more flexibility.
The same principle applies in the opposite direction. If markets had a difficult year, one disappointing year doesn’t necessarily mean you need to dramatically change your retirement lifestyle.
Look at the bigger picture rather than making major decisions based solely on one year’s market performance.
Think About the Big Expenses Coming in 2027
Looking backward is important, but so is looking ahead.
Maybe 2026 was the year you replaced your car. In 2027, perhaps you’re planning a major vacation. Maybe the roof held up just fine this year, but you know it’s nearing the end of its useful life.
Make a list of the larger expenses you expect over the next year or two.
This can help prevent a common retirement-planning problem: treating a large, predictable expense as if it were an unexpected emergency.
Give Yourself Permission to Spend
Retirement planning often focuses heavily on whether you’re saving enough. But for people already in retirement, another question matters just as much:
Are you actually spending your money on the things that matter to you?
If you planned to travel, spend more time with family or pursue a hobby in retirement but found yourself consistently holding back, it may be worth asking why.
On the other hand, if you spent considerably more than planned and aren’t sure whether that pace is sustainable, 2026 can provide an opportunity to make a thoughtful adjustment.
The goal isn’t necessarily to spend less. It’s to spend intentionally.
Create Three Numbers for 2027
Instead of creating one rigid spending number, consider establishing three.
- Your baseline: What you need to cover your essential expenses.
- Your lifestyle number: What you would like to spend during a typical year, including travel, entertainment and the things you enjoy.
- Your flexibility number: What you could comfortably spend during an unusually expensive year.
This approach can make a retirement plan feel less restrictive. Not every year will look the same, and your spending doesn’t have to either.
Don’t Forget the Tax Picture
Before making changes to retirement contributions or withdrawals, take a look at your 2026 tax situation.
Did your income change? Did you sell investments? Did you take money from a retirement account? Did you have unusually large deductions or capital gains?
Those details can help you and your financial and tax professionals determine whether there are opportunities to adjust the timing or source of income in 2027.
Tax laws and retirement-account limits can change, so be sure to use the rules that apply to 2027 rather than simply repeating last year’s strategy.
Your 2026 Spending Is Data—Use It
The most valuable thing about a year-end review isn’t determining whether you were “good” or “bad” with your money.
It’s learning what your life actually costs.
Maybe you discovered that you need less than you thought. Maybe you realized that travel is much more important to you than you expected. Maybe homeownership costs are taking up more of your retirement budget than anticipated. Or perhaps you’re saving more than necessary and could afford to enjoy some of your money today.
Those are all useful discoveries.
Your 2027 financial plan doesn’t have to start from scratch. Start with what 2026 taught you.
Look at what you earned, what you saved, what you spent and what surprised you. Then use that information to make thoughtful adjustments for the year ahead.
A good financial plan isn’t one that never changes. It’s one that changes as your life changes.
