Stress Test Your Retirement Plan Before Life Does

You wouldn’t enter a burning building without testing your gear. So why enter retirement without testing your financial plan?

A real retirement plan is built to hold up under pressure. And that’s exactly what we test for.

At Carlson Planning, we put every financial plan through a stress test - because the market doesn’t care if it’s your first year of retirement, or if you’ve just turned 67 and filed for Social Security. It moves on its own terms. The question isn’t if there will be surprises - it’s whether your plan will bend or break when they hit.

Let’s walk through why stress testing is essential and what it really tells you.

What We Test For (and Why)

A good stress test challenges your plan across several fronts:

• Market Drop: What if the market takes a nosedive right after you retire? A 20% drop early on can do far more damage than the same drop later.

  
  

• Reduced Social Security: What happens if your expected benefits are cut by 20% due to legislative reform?

  
  

• Higher Taxes: Will your withdrawal strategy still hold up if federal or state tax rates rise?

  
  

• Inflation Risk: One extra percent of inflation over 25 years can quietly erode purchasing power and strain fixed incomes.

• Longevity: What if you live five or ten years longer than expected? Great news - unless your plan wasn’t built to last.

  
  

• Healthcare Costs: What if medical expenses or long-term care blow past your assumptions?

We’re not here to scare you. We’re here to prepare you.

How We Respond to Risk

This isn’t just an academic exercise. It informs how we build and refine your plan.

• If market volatility poses a threat, we might segment your retirement timeline into buckets, preserving safe cash flow early on while positioning long-term dollars for growth.

  
  

• If Social Security is a concern, we model different filing strategies, sometimes delaying to age 70, other times drawing earlier depending on longevity assumptions.

  
  

• If taxes threaten, we will examine Roth conversion windows, tax-efficient withdrawal sequences, and how to blend taxable, tax-deferred, and tax-free assets over time.

  
  

• If inflation or healthcare costs are the issue, we take a more proactive approach. That could mean allocating more of the portfolio to assets with stronger inflation-fighting potential, setting aside a dedicated healthcare funding reserve, or tightening discretionary spending targets to protect essential expenses. The goal isn’t to guess what inflation will be—it’s to build a plan that stays intact if it runs hot.

This isn’t theory. It’s practical risk management. It’s the blocking and tackling that keeps you on the field.

Why You Can’t DIY This

Most retirement calculators give you a probability of success, but they rarely tell you what could go wrong, let alone how to fix it.

That’s the difference between working with a software tool and working with a fiduciary advisor. One shows you charts. The other builds a real-life response plan.

At Carlson Planning, we’re not in the business of selling you products. We're in the business of protecting your retirement income and ensuring you’re not one recession or one healthcare event away from running out of options.

Your retirement funds are one of the largest assets you’ll ever manage. You deserve a plan that’s been battle-tested, not just spreadsheet-approved.

If You Haven’t Stress Tested Your Plan, You Don’t Really Have One

If your current plan assumes everything will go smoothly - or if your only strategy is “stay invested” - you’re leaving too much to chance.

A well-designed plan should hold up under pressure, not just when markets are friendly.

Let’s take the time to test yours properly.

Click here to schedule a retirement stress test. No pressure, no pitch—just a candid look at whether your plan will still work when life throws you a curveball.

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This blog is intended for educational purposes only and does not constitute investment, legal, or tax advice. The scenarios and planning strategies discussed are general in nature and may not be appropriate for every individual. You should consult a qualified financial advisor who understands your specific situation before making any financial decisions.

Stress testing and financial modeling are tools used to inform planning decisions—they do not guarantee future outcomes. All investments carry risk, including the potential loss of principal. Past performance is not indicative of future results. Carlson Planning Company is a Registered Investment Adviser registered and domiciled in Massachusetts. Advisory services are offered only to clients or prospective clients where Carlson Planning Company is properly licensed or exempt from licensure.