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  • Writer's pictureJeran Van Alfen, CFP®

The Number You Need to Know for Retirement

Updated: Apr 1, 2023

I remember a commercial a while ago from a financial company that posed the question, “What’s your number?” The ad referred to that amount of money that you needed to save before you retire. It showed people walking around with numbers floating over their heads and the message was to make sure you know what your number is by creating a financial plan. I liked the message and I do think it is important to set savings targets. However, I think there is a more important number to know if you are near, at or in retirement. I call it your HUFHIT number.

Your HUFHIT is your essential expense number. At retirement it is essential to know how much income you need each month to live on. From this number you can determine if your retirement paycheck is adequate. You can determine how much you will need to withdraw from your portfolio and also how much you should have saved before you retire. This will also help you determine key decisions like where you should live, where you will receive healthcare, and how charitable you can be.


Often when I ask people how much they spend, it is difficult to pinpoint where all of the money goes. There may be projects or repairs that skew calculations. There may be regular amenities that we have come to feel are essential. Or there may be money flowing to kids or grandkids that need to be accounted for.

Your HUFHIT is the bare bones number that it takes for you to live. There will always be additional expenses that come up and we can plan for those, but in order to secure your retirement you HAVE to pay for these items:

Housing (Property taxes, Homeowner’s insurance, mortgage or rent, HOA if applicable)

Utilities (Power/Gas, City/Waste/Recycling, Phone, Internet, TV)

Food (Groceries + ½ normal dining out)

Health Care (Premiums, Deductibles/Co-Pays, Prescriptions, Treatments)

Insurance (Auto, etc.)


These are the essentials. I suggest tracking these costs over the last 6 months and calculating the average. Add up the total and remember it. In retirement, you can optimize this number by identifying what is in your control. Example: Housing can be reduced by downsizing, making sure you are debt free or relocating. Some costs are out of our control, like healthcare. However, you can make healthy choices to try to prevent and reduce major costs.

If you are in retirement, this number is worth reviewing. It is important to determine if your income is adequate to cover your needs and what adjustments could be made.

If you are approaching retirement, it is important to plan now for this number and how to pay for it.

We use the Centered Financial Dashboard to project your essential costs over time, identify the right income sources and measure your income stability and your portfolio withdrawal needed. Contact us if you need help determining your HUFHIT or if you need a retirement check-up.

Centered Financial, LLC is a registered investment adviser offering advisory services in the State of California, Utah, Texas and in other jurisdictions where exempted. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. There is no assurance that the techniques, strategies, or investments discussed are suitable for all investors or will yield positive outcomes. To determine which strategies or investment(s) may be appropriate for you, consult your financial adviser prior to investing. Any discussion of strategies related to tax or legal planning is general and is not intended as tax or legal advice. Please consult appropriate tax and legal professionals for recommendations pertaining to your specific situation.

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