SmartAsset and Yahoo Finance LLC may earn commission or revenue through links in the content below. A retirement budget balances your expected income in retirement with your expected living expenses and taxes. Financial planners may use some rules of thumb to generate estimates of how much you are likely to receive in income and use to pay your costs after getting a good understanding of your goals, habits and circumstances. In your situation, it’s likely you can live much as you are now after you stop ...

Core Insights - The primary financial goal for most Americans is retirement, with a focus on not running out of money once retired [1][8] - A recent report from Morningstar indicates a safe withdrawal rate for new retirees is 3.9%, suggesting a starting withdrawal of $39,000 for a $1 million portfolio [10][21] - The report emphasizes the importance of asset allocation, recommending a lower equity allocation of 20-50% for retirees to achieve the highest withdrawal rates [12] Tax Considerations - Most Americans tend to over-withhold taxes, with about two-thirds receiving refunds averaging over $3,000, which may increase due to recent tax legislation [3][4] - The IRS will adjust tax brackets for 2026, increasing the threshold for higher tax rates by 2.3% to 4% [3] Housing and Happiness - Research suggests that smaller houses can lead to greater happiness, as larger homes often come with sacrifices such as longer commutes and larger mortgages [5][6] - The article highlights that happiness peaks in households of four to six people, regardless of home size, and emphasizes the importance of neighborhood factors over square footage [5][7] Investment Trends - The U.S. stock market's share of the global market is near an all-time high at 64%, while Japan's share has decreased to 5% from over 40% in the late 1980s [7] - Non-U.S. stocks showed significant recovery in 2025, with returns of 32%, marking their best performance since 2009 [7] Withdrawal Strategies - The report discusses various withdrawal strategies, including dynamic methods that allow for higher initial withdrawals but require adjustments based on portfolio performance [16][19] - A notable strategy is the guardrail method, which adjusts withdrawals based on portfolio performance while minimizing drastic spending cuts [18][20]