Managing Your Finances in Retirement – Jennifer Hodgdon's Personal Site

Update history:

First written in August, 2025.
Updated 24 August, 2025 — added some notes about diversification to the Investing for the Long Term section, and added sub-headers to that section.
Updated 27 August 2025 — added a section about housing
Updated 31 December 2025 — added a video about Medicare Advantage

When you retire, you have to make the somewhat scary transition from earning a regular salary to living off your savings, if you are fortunate enough to have savings, along with possibly Social Security and pensions. You need to manage your money so that it will last until you (and your spouse, if applicable) die, and so that you have enough cash flow to live comfortably in the meantime. Even if you have been doing a good job managing your money before retirement, it may not be obvious how to change your money management strategies to cover your retirement years.

I have been mostly retired for several years and I have been getting many questions from friends and family members about this subject, so I decided it might be useful to write this article about my own strategies. It covers understanding your budget, when to start taking Social Security, setting up a combination living and emergency fund, insurance, managing cash flow, and investing wisely. This article got long — there’s a lot to consider — but you can always read some now and then come back to it later.

Some notes:

There’s a spreadsheet available at the bottom of the page that you can download as an addition to this article; its use is described in the sections below.
This is all pretty specific to the United States; I have no knowledge of retirement concerns for people elsewhere.
Each section is somewhat independent, so for instance if you already know what you are spending and earning, you might skip the section on budget.
I am not a financial professional. Before taking action based on anything in this article or the numbers in the associated spreadsheet, I suggest you check the spreadsheet calculations, and verify my suggestions by reading other articles or consulting with a financial planner, tax advisor, or other professional.
Many banks, credit unions, and brokerage firms offer free financial advice, which may be useful — but be aware that some free information may be biased towards using the services of the financial institution (which might be OK), and some is financed by commissions earned by the financial professional (which might not result in the best advice for you). It may be worthwhile to pay for a few financial consultations with a truly independent advisor to avoid these biases, and it’s also OK to ask anyone offering advice what they are getting out of it.
I am not getting any compensation or benefit for offering you this free advice or the links to web sites. It all just comes from my own experience, knowledge, and opinions.

Understanding your budget

The basis for any financial plan is always an understanding of how much you are earning and spending on a monthly basis. There are many budget calculation tools available on the Internet; your bank or credit union may also offer budgeting tools that you can use on their web site. If you haven’t retired yet, or have just retired, this may be difficult to estimate — some expenses go up when you retire (such as travel, for many people) and others go down (such as gas for commuting to work).

The first tab of my spreadsheet (which you can download at the bottom of this page) contains a simple expenses calculator that you can also use. It looks something like this:

To calculate your expenses, put the name of the item in the first column, the frequency you pay it (how many times per year) in the second column, and the amount you pay each time in the third column. The monthly amount in the fourth column and the total at the bottom will calculate automatically, if the spreadsheet is working correctly. Examples of items to enter:

Groceries and other household supplies
Monthly car payment, rent or mortgage payment, and annual property taxes if they are not included in your mortgage
Insurance payments: health, car, house, renter’s, liability umbrella, etc. — these might be paid monthly, yearly, or twice a year
Gas or electricity for your car
Health care, dental care, eye care — you might use last year’s total expenditures as an estimate for this category, and put that amount in as once per year to calculate a monthly estimate
Utility bills, including cell phone plan
Entertainment, eating out, hobbies, etc.
Travel — for example, if you want to budget for taking one big trip every year and several smaller ones, add the the total cost of these trips as a one time per year expense.
Income tax — this may be difficult to estimate if you have not already been retired for a year or two, as your tax situation is likely to be quite different in retirement than when you’re working. You may want to consult a tax professional.

If you spend some time figuring out how much you are actually spending in each category, you may realize that there are things you could cut out. For example, maybe you are spending a large amount every month for video streaming services that you rarely use — maybe you could cut down to the one or two that you actually enjoy. Any cuts to your spending will help you maintain your assets in retirement.

Another way to approach figuring out your spending budget would be to look at your bank statements for the last year. Usually, bank statements have a breakdown for each account of how much you added and spent from that account during the statement period. So, for instance if all of the money you spend comes out of one checking account, including paying for your credit cards, you could add up the monthly spending from that account for the whole year, and put that in my spreadsheet as a once-yearly expenditure. If you have two accounts that together account for everything, repeat this for the second account, making sure that you subtract off any transfers you did from the first account to the second or vice versa so that you don’t double-count expenditures. This method will not give you a very good picture of what exactly you are spending the money on, but it should give you an accurate picture of how much you have been spending.

A second part of understanding your budget is calculating your total guaranteed monthly income, which could come from Social Security, annuities, pensions, spousal support, etc. There’s a section in the spreadsheet for that as well. Do not include income from your savings and investments in this section — that income is variable. If you don’t have any guaranteed income, enter zero for those lines.

Your expenses and income will probably change over the course of your retirement years. I suggest calculating your budget now, and returning to the calculation every year or so to update it. For instance, in my case I might start taking Social Security in about 3 years when I hit age 62 (see section below), so I would then start having something to put in the Guaranteed Monthly Income section (I don’t currently).

When to start taking Social Security

One question that most US retirees think about a lot is when to start taking Social Security. You can log into your account at the Social Security Administration and see the monthly payment you will receive if you retire at different ages. You’ll get less per month if you start taking it at age 62 (the earliest allowed), and more each month if you wait until a later age (until 70, when the benefits stop improving under current rules). However, you’ll also be collecting money for longer if you start earlier, and taking less out of your savings and investments to cover your living expenses, so those investments will grow more. All of this assumes that Social Security continues in its current form — who knows about that!

In order to help inform my decision about when to start taking Social Security, I did a calculation based on what I saw in my own Social Security account. I calculated the total amount of payments I would receive if I started taking Social Security at different ages and lived to age 75, 80, or 85, and I also calculated the “break-even age” vs. starting at my official retirement age of 67 (the age I’d have to live to, to make it more worthwhile to start taking payments on that row’s age than at age 67). Here’s a screenshot of the calculation (which should be similar for you, but with different base benefit number):

One thing that I still don’t understand from this calculation is that starting at age 68 or 69 is in all cases worse than starting at 67, but I’ve validated the calculation several times and I think it’s correct; if you don’t start by age 67, waiting until 70 would usually be better (except for the scenario of living to age 75). Another thing you can see in these results is that if you live to age 80, there is almost no difference in the total amount you would receive, no matter when you start (which basically means the Social Security administration has something around that as my life expectancy). If you don’t live that long, you’re quite a bit better off starting earlier, and if you live longer, you’re a little better off starting later. But given that this calculation doesn’t take into account the increased investment returns you would have if you use Social Security for part of your living expenses (which makes it even better to start earlier), or the uncertainty in the Social Security system itself, my conclusion from this calculation is that I should start taking Social Security as early as I can (age 62).

Note that there are tax consequences to taking Social Security if you have other earnings, so you may want to consult a tax professional… Perhaps I’ll look into those as I get closer to age 62, and come back and update this article.

Setting up an emergency/living fund

If you have read about financial planning or consulted a financial planner, you know that you should have some money on hand for emergencies. The typical advice is to have enough so that you could cover your insurance deductibles and 1-3 months of living expenses, and to put this money into a safe place: namely, an FDIC/FCUA-insured account at a bank or credit union (rather than investing it in stocks or mutual funds, which go up and down in value). This is excellent advice!

I suggest looking at the banks and credit unions in your area and seeing which one has the best interest rates. Usually the best rates are on Money Market (MM) accounts (which may have a minimum balance) and Certificates of Deposit (CDs, which have different and usually better rates than MMs, depending on the length of the CD). Either is fine, or a mix — if you need money that is in a CD for an emergency, you can easily get it out, possibly forfeiting a small penalty or some of the interest you earned. You can also build a “ladder” of CDs, by opening a CD every month or two, so you end up with several CDs with different maturities.

A credit card is also good to have for emergencies, especially if you keep the balance at zero by paying it off every month and choose one without an annual fee. You can find credit cards that pay cash back on purchases in Nerdwallet’s list of cash back credit cards, or check with your local bank or credit union. I actually have two credit cards, both of which pay cash back and have no fees if I pay the balance off each month; this is handy when one of them doesn’t work for some reason.

Besides the emergency fund and credit cards, if you are in your retirement years and primarily or partially living off your investments, you will probably find it useful to have some additional money set aside for your regular living expenses. The reason is that while many investments pay out distributions (dividends, interest, and/or capital gains; see also the Managing Retirement Cash Flow section below), which you can use for your living expenses, for the most part they do so at irregular intervals (mine are highly concentrated at the end of each year). So if you are trying to live at least partly off the distributions from your investments, you can’t rely on money coming to you when you need it. For this reason, I have found it helpful to keep several more months of living expenses (minus guaranteed monthly income amounts), along with my emergency fund, in my bank account. I call this my “Emergency/Living Fund”, because it is dual-purpose.

To calculate how much you need to have in your Emergency/Living Fund, you can download the spreadsheet at the bottom of this page. Start by filling out your monthly expenses and guaranteed income (see previous section; if you don’t need the spreadsheet for that part, you can override the totals in those sections with the amounts you know from some other calculation). Then continue to the section underneath that on the first tab:

Enter the Maximum Out of Pocket Expense amount from your medical insurance, as well as the larger of your Homeowners/Renters and Car insurance deductible, in the Emergency Expenses section. The total of these (which should calculate automatically on the spreadsheet) is an estimate of the amount you might need as a one-time emergency expense — the idea is that if, for example, you have a bad car accident, you might end up paying out the car insurance deductible and maxing out your health insurance with a day in the hospital or an emergency room visit.

Next, decide how many months of living expenses you are comfortable having on hand for emergencies and living — I suggest somewhere between 6 and 12 months — and enter it in the spreadsheet. The total amount you should have in your Emergency/Living Fund account will then calculate for you on the spreadsheet (if it’s working correctly, equal to your emergency expense estimate, plus the difference between your monthly expenses and guaranteed income multiplied by the number of months you entered).

You’ll need to monitor the value of your Emergency/Living Fund account over time, and verify that you have enough but not too much in it. You don’t have to worry about building it up right away if it’s low, assuming that you have investments on hand that you could liquidate if necessary. You can instead gradually build it up over time, by transferring distributions from your investments to your bank account or liquidating investments if necessary. And if you have a lot more than you need in your account, you can gradually transfer it into investments over time. Also, if you find that you are chronically low in your account, you may need to revise your budget, adjust your spending habits, or change how you manage your cash flow (see next section).

One more note: If you have an HSA account (associated with a high-deductible health insurance plan), I would consider the amount in that account as part of your Emergency/Living fund, because at least some of the cost of an emergency is likely to be health care, and probably some of your monthly expenses are related to health or dental care (which you can pay for out of your HSA account).

Insurance

There are many types of insurance; check out this Forbes article on types of insurance and this USA Today article on types of insurance. Here are my takes on what types of insurance are a good idea to have in retirement and what types aren’t (this does depend somewhat on your particular circumstance; as I keep saying in this article, you may want to consult a professional for customized advice):

Health insurance: Definitely! If you don’t have health insurance and end up needing a hospital, you are at risk of going bankrupt.
Car and liability umbrella insurance: Definitely (if you drive)! You should have liability coverage about equal to your net worth, or you are in danger of bankruptcy if you have a horrible accident that injures someone or causes property damage. You can purchase a liability umbrella policy from your car insurance provider.
Homeowner’s or renter’s insurance: Definitely! This covers your house and/or belongings, in case of a fire, theft, and maybe some other circumstances. Make sure it covers “replacement value” for your belongings and house.
Life insurance: Probably not. Life insurance goes to a loved one when you die. If no one in your family will be financially impacted when you die, there is probably no reason to pay for life insurance. It seems to me that it is mostly useful during working years, if one spouse’s salary is a lot more than the other one’s.
Disability insurance: No. This covers replacing your salary if you are disabled. If you are retired, you are not earning a salary.
Long-term care insurance: Maybe. If you already have a policy, you might want to look at it carefully — they are very complex, and it may be difficult to understand how much it might eventually pay out, for what types of care, for how long, and after what waiting period. I looked into purchasing a policy several years ago, and I didn’t think any of the ones I investigated was worth enrolling in at that time due to very limited possible pay-outs. So I am basically self-insuring for long-term care (planning to use my assets to pay for long-term care if the situation arises).
Travel insurance: Maybe. Check out this article on NerdWallet about travel insurance if you are going on a trip. If your health insurance doesn’t cover emergencies while traveling internationally, you definitely should get it.

One other thing to think about is Medicare. I won’t be eligible for several more years, but a few years ago I was asked by a family member to look into Medicare to help them figure it out. I spent several hours reading about it, and I have a few thoughts and notes to share:

Medicare Part A covers hospitalization, nursing homes, hospice, and home health; Part B covers doctors and some other services. Unless you have some other coverage for doctors, you need both of these. Note that Medicare Parts A & B have no coverage for travel outside of the US.
Part D covers prescription drugs. These plans are offered by insurance companies, and are probably a good idea. You can add Part D later and switch plans each year.
Medicare Advantage (originally known as Part C) plans are offered by insurance companies to reduce the fairly large deductibles of Medicare Parts A and B. They bundle parts A, B, and usually D; some Advantage plans cover foreign travel, dental care, eye care, etc. Different Advantage plans offer different deductibles, co-pays, and maximum out-of-pocket limits. Like regular insurance plans, generally these plans require you to use in-network providers, and the insurance company has the final say over whether they cover the health care that you seek out. Once you enroll in Medicare Advantage, you can switch to a new Advantage plan each year or go back to just A, B, & D. You can’t easily switch to Medigap.
Medigap is an alternative to Medicare Advantage, also reducing deductibles, but unlike Medicare Advantage, there is no provider network and there are no worries about coverage decisions. There is an alphabet soup of different standardized Medigap plans (A, B, C, D, F, G, K, …), with different deductibles and coverage; once you choose a “letter”, there may be several companies providing the plan with identical coverage (with different premiums in some cases; choose the cheapest). Open enrollment in Medigap is only for the first six months after you hit age 65; after that you could be denied coverage or have to pay more, so it’s difficult to add it later or switch from Medicare Advantage to Medigap. You can drop Medigap, or switch to Medicare Advantage, during an open enrollment period each year. Some states also offer Medicare Select, which is a special form of Medigap, but these plans also use a provider network.

After seeing a lot of news articles, reading about these alternatives, and hearing stories from friends and family members, my plan is to enroll in a Medigap plan and Part D, rather than Medicare Advantage (which I think should really be called Medicare Disadvantage), assuming these plans are still available then.

Note: If you are overwhelmed about the Medicare choices, or are thinking about enrolling in Medicare Advantage, you might want to watch the video below from John Oliver’s “Last Week Tonight” show. It is humorous, but also very carefully researched, and details many reasons to avoid Medicare Advantage. Here it is:

Housing

Here are some things I’ve been thinking about regarding housing in retirement:

Most people want to live in a building of some sort, and if that is the case for you, you will need to either pay rent or own property. If the value of your property goes up and you sell it, you might make some money, but then you will either need to buy another property or start paying rent — both of which will likely have gone up a similar amount to your property value. So owning property is more of a way to lock in the cost of living (aside from the ever-increasing costs of insurance and property taxes) than an independent investment.
At some point in the future, I expect that we will get to the point where taking care of the yard, repairs, and upkeep will become a burden. At that point, we will either need to start hiring people to do the upkeep or consider moving into a rental or retirement community where that upkeep will be someone else’s responsibility.
At some point in the future, just living in the house that we currently own may also become a problem. Our next-door neighbors and a friend of mine’s mother both recently moved for that reason — the houses they were living in had lots of stairs, and climbing up and down them became difficult and/or dangerous.
It may not be financially sensible to pay off your mortgage, if you have one. According to this article in Business Insider, the average return for stocks since 1928 is around 10% (although it is, of course, variable). So if your mortgage rate is way under 10%, it probably makes better financial sense to keep making the minimum payments, if you can invest the money you would have used to pay off your mortgage in the stock market over the long term. (The same probably goes for buying a car, depending on the loan rate you can get, although car loans tend to be shorter term than home loans, and the variability in the stock market makes returns more unpredictable over the short term. Credit card interest, on the other hand, is usually much higher, so pay off your credit cards every month if you can.)
On the other hand, having monthly payments for a mortgage or car loan does make your monthly spending budget higher. As a freelancer, my income was variable even when I was still working, and even though it would probably be a better financial decision to hold loans, cash flow (see next section) is a lot easier to manage if you have fewer monthly expenses, and I have chosen not to hold car or home loans.

Managing retirement cash flow

If you have been filling in the spreadsheet, following the steps in the previous sections of this article (you can download the spreadsheet at the bottom of this page), you will see at the bottom of the first tab a calculation of the annual amount you need to earn or take out of your investments to live on (equal to your monthly spending budget minus your monthly guaranteed income, multiplied by 12). If this amount is negative, good news! You shouldn’t need to dip into your investments at all.

Assuming that the amount is positive, the first question you are probably asking yourself is whether or not you have enough investments to cover this withdrawal. To answer that question, you can read this article on The Retire Early page about safe withdrawal rates. The article suggests, for example, that if your assets are invested with an optimal asset allocation (see next section), and your expected lifetime from today is 40 more years, you can feel 100% safe withdrawing 3.54% of your assets each year. So for instance, if you have $1,000,000 in assets to work with, you can safely withdraw $35,400 per year. (You can look at the article to figure out the percentage to use for your situation.)

With that question answered (hopefully in the affirmative — if not, maybe you are not financially ready to retire?), the next question is how to withdraw the money. There are several things to consider.

First, this article from Kiplinger about order of withdrawals says that in order to maximize tax benefits, you should withdraw from your regular brokerage accounts first, your tax-deferred accounts second (401-K, regular IRA, etc.), and Roth IRAs last. You may want to consult a tax professional to see if that general advice is the best thing for your particular situation, and you’ll also need to follow the rules for withdrawals. For instance, you cannot withdraw from a tax-deferred account without penalties before age 59 1/2, and you have to start taking minimum amounts from those accounts by a certain age (see the IRS web page on required minimum distributions).

Once you have decided which account or accounts you want to be taking money out of, there are several different strategies you can follow. One possible strategy is to wait until your Emergency/Living Fund account is low (see previous section), and then sell investments and transfer the proceeds to your Emergency/Living Fund account. This may have tax consequences (such as paying capital gains tax if it is done in your regular brokerage account), and you may incur trade fees or commissions.

My preferred strategy is somewhat different:

Change the accounts you are planning to withdraw from so that for each investment in the account (or a subset), the dividends and capital gains distributions are paid out in cash. You may have to call the investment company to make this change if you currently have your distributions reinvested automatically.
When these distributions happen (you can see them on your monthly statements), look at your Emergency/Living Fund account balance. If it is low, transfer the money to your bank account. If it is adequate, choose an investment and reinvest the money (see the investing section below).
If you are not generating enough distributions during the course of the year to keep your Emergency/Living Fund balance high enough (keeping in mind that most distributions from mutual funds happen near the end of the year), find different investments that tend to have higher dividends and capital gains distributions and swap out other investments for these. Note that these high distribution-paying investments are not considered to be “tax-efficient”, so you may want to consult a tax professional before taking this step if you are withdrawing from a regular brokerage account and not a retirement account.

This will all probably be much easier to manage if you have your retirement accounts and other assets (aside from your Emergency/Living Fund and your regular checking account) at a small number of brokerage companies, rather than spread out over many accounts (which can easily happen if you worked for several companies and still have your 401-K accounts at each one). If you don’t already have an account that you like that you can transfer other accounts into, you might read this article from Motley Fool on brokerage accounts for beginners, this article in Forbes on online brokerage accounts, or this article from NerdWallet on brokerage accounts for investing in mutual funds. Things to consider if you are picking a new brokerage company:

Ease of online management of multiple accounts (regular, Rollover IRA, Roth IRA)
Low/no annual account maintenance fees
Ease of transferring funds between brokerage and checking/savings accounts
Ease of transferring other accounts into this one (although this is not something you’ll need to do a lot)
Availability of mutual funds and other investments to choose from
Low/no fees for buying/selling investments
Availability of phone support
Availability of financial help and investment advice
Availability of research on mutual funds and other investments
Nearest local office and services offered there (such as help getting your assets transferred in)

I’ll just add a couple more notes in this section:

If you have an account at TIAA-CREF, that may be worth keeping your assets in, as they have a reputation as excellent money managers (for instance, a Schwab representative once advised me not to transfer my TIAA-CREF account to Schwab). However, depending on the type of account you have there, they may not offer as many investment choices as a regular brokerage account, so you might not want to transfer other assets into TIAA-CREF.
Be careful when you transfer from one brokerage to another to make sure the type of account stays the same (401-K or existing Rollover IRA into a Rollover IRA, Roth IRA into another Roth IRA, and regular brokerage account into regular account). Otherwise, you may incur unwanted taxes and/or penalties.

Investing for the long term

Choosing Your Asset Allocation Targets

The main subject of this last section of my article is known in the financial industry as “Asset Allocation”. The idea is that rather than putting all of your assets into one type of investment, you will be better off using a variety of asset types, such as stocks, bonds, and real estate. Stocks can be further separated into categories like US and foreign, large and small capitalization based on the size of the company, and growth and value stocks; bonds also have sub-categories such as high yield, corporate, municipal, and government. There are many opinions about what the optimal asset allocation should be, in order to maximize investment returns and minimize investment losses and volatility. For instance:

The Retire Early page suggests an optimal stock percentage based on your life expectancy. With a 40-year-from-now life expectancy, they suggest 70% stocks.
Investopedia suggests a calculation of 110 minus your current age, and having that percentage in stocks with the remainder in bonds. At age 60, that would be 50% stocks, and the percentage in stocks would decrease from there as you age.
Motley Fool has an article that shows your expected annual return based on your percentage in stocks and bonds, and they also suggest allocating 10% to real estate securities to improve yield and decrease volatility.
Charles Schwab has an article that lists aggressive, moderate, and conservative allocations of stocks and bonds.
This article in Forbes about diversification discusses diversification of asset classes, industry sectors, geography, and other factors.

Given all of that, you might want to consult with a financial planner to figure out what your target asset allocation should be for your investments and comfort level. My suggestion is to use the asset categories of large-cap US stocks, small-cap US stocks, foreign stocks, bonds, and real estate. I wouldn’t worry too much about allocating investment targets to what’s known as “cash” (safe bank accounts), because that would be covered by maintaining your Emergency/Living Fund.

Choosing Investments

Once you’ve decided on your asset allocation targets, the next step is finding investments for each asset class. I have several suggestions for this:

Invest in exchange-traded funds (ETFs) or mutual funds, not in individual stocks, bonds, and pieces of real estate. One reason I suggest funds is that unless you have a lot of trading experience and want to devote a lot of time to researching stocks and bonds, I think it is a lot better to put your trust in money managers whose full-time job is managing funds and who have a good track record in the past of delivering good returns. Another reason for funds is that they are usually quite diversified across companies and industry sectors, which generally reduces risk.
Spend some time researching any fund you might invest in, as well as the ones you currently hold. Your brokerage company should provide a way to look up a fund and see all kinds of information about it (which is good, since you can get used to their format and how to find the information you need), or you can do an Internet search on the fund symbol.
Look for funds with low expense ratios, such as index funds (which try to follow a broad-based index like the S&P 500 instead of picking individual stocks that the fund manager thinks will do well).
Look for funds with good Morningstar ratings. There is an overall Morningstar rating for each fund (1 to 5 stars, high is good), as well as a Returns rating (high is good), a Risk rating (low is good), and an Expenses rating (low is good).
Check the Morningstar fund category to see what asset class it predominantly consists of.
Invest in several funds with good track records in each asset class you are targeting, rather than having all of your assets managed by one fund manager.
If you need more distributions (see the cash flow section above), look for funds that have a high distribution yield (which is the percentage that was paid out in distributions during recent years).
Look for funds that have low or zero transaction cost to buy and sell at your brokerage. If you find that there are not many funds that are free to trade, you might consider using a different brokerage.
Your brokerage company probably has a way to filter the thousands of available funds down to a more manageable list of those to research, using criteria such as the considerations above. Or, you might get suggestions from a financial planner or investment advisor.

The second tab in the spreadsheet (which you can download at the bottom of this page) is a sheet that you can use to record your fund research. There are columns to record fund names in each asset category, along with each one’s symbol, Morningstar ratings, and annual distribution yield.

Calculating Your Actual Asset Allocation

The next step in asset allocation is to figure out what your current asset allocation actually is. Your brokerage may give you this information, but in my experience, the allocation that they report for funds is not very accurate. It’s usually based on the Morningstar fund category, so for instance a fund that is invested 60% in large-capitalization stocks, 20% in small-capitalization stocks, and 20% in bonds might be put in a fund category of large-cap stocks (which the brokerage would count as 100% large-cap stocks), when really you want it to count as partly in all three of those categories.

My suggestion for calculating a more accurate asset allocation is to create a free Empower Personal Dashboard account — click “Open an account”, then “Create Empower Personal Dashboard”, and follow the steps to set up the account. You may get phone calls or offers of financial consultations from them; I think there is a way to turn those off, but if not you can just ignore them.

Empower will encourage you to import information from your brokerage accounts, but I would not do that, for security reasons. Instead, you can enter the information manually. To start this process, click “Link another account” (I know, counterintuitive!), then “More” under the list of companies to link to, and then “Manual Investment Account”. Enter a name for the account, and click Done. I suggest making an “account” on Empower corresponding to each separate brokerage account you have (such as your regular, Rollover, and Roth accounts at brokerage A, and your regular and Roth at brokerage B, being 5 separate accounts).

Once you have an account set up on Empower, you will need to enter your assets and how much of each you own, and update this information the next time you want to calculate your asset allocation. You’ll need the fund symbol and number of shares for each holding; the fund name, share price, and total value will calculate automatically and update as the price changes. It looks like this:

When you have all of your holdings entered (which takes a while the first time, but is easier once you are just updating amounts later on), you can see your current asset allocation by going to the Investing menu at the top of the page, and selecting Allocation. You’ll see some big colored boxes at the top, and some lines below with information about your asset allocation (percents and total value; I haven’t shown the value column on the right):

If you want to look deeper into one of the categories, you can click on it to see details. For instance, clicking on U.S. Stocks will show something like this (again, I haven’t shown the value column to the right):

The asset classes that Empower shows you may not quite align to what you are targeting. If you use the asset classes I suggested above, to compare what you see in Empower to your target allocation you can use the third tab of my spreadsheet (download it at the bottom of the page). First, enter your target asset allocation in the yellow-highlighted cells on the left side:

You’ll notice that you don’t enter a target for large-capitalization US stocks — you want the percentages to add up to 100%, so you enter the others and what’s left over is allocated to large-cap US stocks.

Next, enter the numbers from the Value column from the allocation page in the Empower dashboard (see above — under Investing in the top menu, click Allocation) on the right side of the spreadsheet — note that what Empower calls Alternatives is mostly real estate (you can click on the name Alternatives and see for sure). Then click on U.S. Stocks to see the subclasses of U.S. Stocks, and enter the values for the top three categories from that page into the spreadsheet. The spreadsheet will look something like this:

Once you have entered these values, if the spreadsheet is working correctly you should see various calculations updated:

Some explanations:

The green number at the bottom shows your total investments — this should match the total value shown in the Empower dashboard.
The Target $ column shows the dollar value target for each asset class, based on the Target % values that you entered and your total investments.
The Current $ and Current % columns show your current asset allocation, in dollars and percentage.
The High/Low column shows you whether your current allocation is too high or too low, as compared to your target allocation.

Rebalancing to Meet Asset Allocation Targets

Now you should have all of the tools you need to rebalance your portfolio so that your actual asset allocation closely matches your target allocation (keeping in mind that it’s never going to be an exact match):

Update your asset holdings in the Empower dashboard whenever you are going to buy or sell investments, and also update the spreadsheet with the Allocation Value numbers from the Empower dashboard (see above for steps). Also verify that your asset allocation targets are still current.
If you have some money to invest, buy a fund you have researched in one of the asset categories shown as “Low” in the spreadsheet.
If you need to liquidate an asset to generate cash flow, sell a fund in one of the asset categories shown as “High” in the spreadsheet.
If your portfolio is highly out of balance, sell assets in the “High” asset categories and use the proceeds to buy assets in the “Low” asset categories. There are tax consequences whenever you sell assets (capital gains).
You might also consider spreading your sell/buy transactions out over time, as markets go up and down randomly (don’t try to time the market — just spread out your exposure).
For all purchases and sales, also keep in mind that you might want to hold funds that tend to pay higher distributions in the accounts that you are currently planning to draw money from (see cash flow section above).

Download the spreadsheet

You can download the latest version of the spreadsheet that is described in the sections above (last revised August 2025). Note that it comes with no warranty — use at your own risk! Also, read the note in the introductory section about my lack of professional status — you should consult a professional before acting on anything you see in this spreadsheet or in this article.