Are you financially prepared for retirement? Take this stress test to assess your financial readiness.
- PW Coetzer
- Mar 17
- 4 min read
Updated: Apr 7
Retirement is one of life’s biggest financial transitions. After decades of earning and saving, you’ll need to rely on the wealth you’ve built to fund your lifestyle — possibly for 25 years or more. Many people feel confident about their readiness, but confidence without a clear assessment can lead to surprises. This stress test is designed to help you evaluate your financial preparedness, identify potential gaps, and give you a clearer picture of whether your retirement plan is built to last.

1. Do you know your essential expenses — and how you’ll cover them?
A comfortable retirement starts with knowing your core expenses — the non-negotiables like housing, utilities, healthcare, insurance, food, and transportation. If you haven’t taken the time to calculate these costs on a monthly or annual basis, it’s difficult to know how much income you’ll truly need. Beyond knowing the numbers, it’s just as important to understand where the money will come from. Will Social Security or a pension cover the bulk of your needs, or will you rely heavily on withdrawals from savings? The more clarity you have about these essential expenses and income sources, the more confident you can be in your financial foundation.
2. Do you have a clear withdrawal strategy for your savings and investments?
If you’ll be relying on retirement accounts, investments, or other savings to fund part of your retirement, the way you withdraw those funds matters. Taking out too much too soon can jeopardize your future security, while being overly conservative can leave you living more frugally than necessary. A solid withdrawal plan considers both your lifestyle needs and the realities of market fluctuations. It’s also important to have a plan for adjusting withdrawals when investment returns are lower than expected, ensuring your portfolio can last through good years and bad.
3. How well would your finances withstand a major unexpected expense during retirement?
Life in retirement isn’t immune to financial surprises. From major home repairs to medical procedures not fully covered by insurance, large expenses can disrupt even a well-planned budget. Having a dedicated emergency fund — ideally in cash or easily accessible accounts — can give you flexibility and peace of mind. It’s also important to think beyond one-time emergencies and factor in larger, infrequent costs, like replacing a vehicle or helping adult children with an unexpected need. The more prepared you are for these possibilities, the less likely they are to derail your plan.
4. Have you accounted for rising healthcare costs?
Healthcare is often one of the largest — and fastest-growing — expenses in retirement. Even if you qualify for Medical aids, there are premiums, co-pays, prescription costs, and potential out-of-pocket expenses to consider. It’s important to understand what Medical aids covers, what it doesn’t, and whether you might need supplemental insurance. If long-term care is a concern, have you thought about how you would fund it? Addressing healthcare costs upfront, rather than reacting to them later, is one of the best ways to protect your retirement savings.
5. Are you prepared for inflation?
Over a retirement that could span 20 to 30 years, the cost of living is likely to rise significantly. Even moderate inflation can erode purchasing power over time, which means your retirement income will need to keep pace. If your portfolio is too conservative, it may not generate enough growth to outpace inflation. On the other hand, if it’s too aggressive, you could be exposed to unnecessary risk. Building in strategies to help your money grow, while balancing safety and income needs, can help you stay ahead of rising costs.
6. How will your tax situation change?
Taxes don’t go away in retirement — in fact, they can become even more complex. Withdrawals from traditional retirement accounts are taxed as income, Social Security benefits may be partially taxable, and required minimum distributions (RMDs) can push you into higher brackets. Understanding how your different income sources are taxed — and timing withdrawals strategically — can help you minimize taxes over the long term. Tax planning isn’t just about one year; it’s about creating a tax-efficient income plan for your entire retirement.
7. What happens if one spouse passes away?
For couples, the financial impact of losing a spouse is often overlooked. In addition to the emotional loss, there are practical financial shifts to consider — changes in Social Security benefits, pension income, and possibly even tax brackets. It’s important to understand how your income would change and whether the surviving spouse would have enough to maintain their standard of living. Reviewing life insurance, updating beneficiary designations, and ensuring both spouses understand the household finances can help reduce stress during an already difficult time.
8. Do you have a plan for preserving your estate?
Even if leaving a legacy isn’t a top priority, having a clear estate plan is still essential. Wills, trusts, powers of attorney, and healthcare directives ensure your wishes are followed and make things easier for your loved ones. Beyond legal documents, communicating your plans — from where to find key documents to who to contact in the event of an emergency — can prevent confusion and unnecessary conflict. An up-to-date estate plan is just as much about protecting your loved ones as it is about protecting your wealth.

In conclusion
If you felt confident answering each of these questions, you’re likely on solid ground. But if you found yourself unsure, that’s completely normal — and it’s a sign that you could benefit from reviewing your plan before you fully step into retirement. Financial readiness isn’t about perfection. It’s about having a clear process for evaluating risks, adjusting as needed, and building confidence that your retirement is sustainable.
Working with a financial adviser can help you stress-test your plan, spot potential gaps, and create strategies to help you retire with clarity and confidence.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. For personalised advice tailored to your specific financial situation, please contact us or one of our qualified financial advisers at Corona Financial Services.
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