The Reality of Retirement Spending: Why Utah Retirees Need More Than 70%

Originally aired on KAOX, KID, KNRS, and KSL

Introduction: Breaking the 70% Retirement Income Myth

Ever feel stuck in the daily grind? Fighting traffic, working all day, longing for retirement freedom? If you're like most Utah retirees, you've probably heard the conventional wisdom: "You'll only need 70-80% of your working income in retirement."

Here's the reality: That conventional wisdom is completely wrong.

Mike Stevens, founder of Capital Wealth Advisors, has worked with hundreds of Utah retirees over the past 20 years. His conclusion? "I've yet to meet one person who says, 'We don't need chicken for dinner anymore — rice and beans will do. Let's stretch our annual vacation to every three years.'"

Retirement should be the best years of your life, not a time of financial restriction.

The Three Seasons of Retirement Spending

The Go-Go Years (Ages 65-75)

What to expect: This is when Utah retirees are most active and often spend MORE than their working years.

Utah advantages during this phase:

• Proximity to 5 National Parks — Arches, Canyonlands, Capitol Reef, Bryce Canyon, Zion
• World-class skiing — Alta, Snowbird, Park City, Deer Valley
• Lower housing costs than California neighbors who relocate here
• Excellent healthcare systems — Intermountain Healthcare, University of Utah

Real spending patterns:

• Travel and adventure increase
• Grandchildren spoiling intensifies
• Home improvements and hobbies expand
• Premium experiences replace budget constraints

The Slow-Go Years (Ages 75-85)

Natural evolution: Physical changes influence activity choices, but spending doesn't necessarily decrease.

Utah-specific considerations:

• Shorter travel — Maybe Yellowstone instead of Japan, but still meaningful trips
• Local recreation — Utah's accessibility makes regional adventures possible
• Comfort upgrades — First-class flights, better accommodations
• Community involvement — Local causes and organizations

Capital Wealth client example: Recent client wanted to take family to Maui but worried about husband's difficulty with long flights. Solution? Upgrade to Delta One lie-flat seats. "You're either going to make memories with grandchildren or pass away and give them the money anyway. They'd rather spend it WITH grandma and grandpa."

The Won't-Go Years (85+)

The care phase: When the "big trip of the year is to Walgreens or CVS Pharmacy."

Critical Utah planning factors:

• Long-term care costs: Nursing homes in Utah average $110,000+ annually
• 70% of Americans over 65 will need some form of long-term care
• Home health aids: Approaching $78,000 annually
• Family proximity: Utah's family-centered culture provides support advantages

Why the 4% Withdrawal Rule is Dead

The Problems with 4%

"If you ever hear the 4% rule, just immediately know it doesn't work anymore," warns Stevens.

What's changed since the 1980s:

1. Higher taxes — Both federal and state tax implications
2. Persistent inflation — After 30 years of low inflation, costs are rising
3. Longer lifespans — 30+ year retirements require different strategies
4. Unnecessary restrictions — Arbitrary limits prevent optimal experiences

Utah-Specific Tax Considerations

State tax advantages:

• No tax on Social Security benefits
• Moderate state income tax rates
• Property tax rates below national average
• Strategic tax planning opportunities

Hidden tax traps:

• Medicare premium spikes from Roth conversions done incorrectly
• IRMAA surcharges affecting high-income retirees
• Required minimum distributions creating tax bombs

The Real Cost of Utah Retirement Living

Housing Market Reality

• Property taxes: Lower than California, higher than Nevada
• Maintenance costs: Four-season climate requires preparation
• HOA fees: Vary widely by community ($200-$800+ monthly)
• Utilities: Winter heating, summer cooling considerations

Healthcare Specifics

Utah advantages:

• Intermountain Healthcare system quality ratings
• University of Utah medical facilities
• Lower overall costs compared to coastal areas
• Healthy lifestyle culture supporting active aging

Planning considerations:

• Supplemental insurance for Medicare gaps
• Long-term care insurance vs. self-insurance strategies
• Proximity planning — Being near quality care facilities

Tax Scam Awareness for Utah Retirees

Based on the IRS "Dirty Dozen" campaign discussed in this episode

Email Phishing Scams

What Utah retirees are seeing:

• Fake IRS emails demanding immediate payment
• "Chase Bank" and "Facebook" impostor emails
• Text "smishing" about postal service fees

Protection strategy: Never click email links. Call the legitimate number directly.

Social Media Tax Advice Dangers

Viral misinformation examples:

• "Buy a 6,000+ pound vehicle and write it off completely"
• Misleading trust strategies
• Bad advice about retirement account withdrawals

Stevens' advice: "Trust but verify. Even ChatGPT gets basic retirement rules wrong."

Charitable Scam Protection

Red flags in Utah:

• Pressure for immediate donations
• Lack of proper 501(c)(3) documentation
• Emotional manipulation tactics

Verification: Check organizations through Utah's Secretary of State office before donating.

Professional Tax Planning vs. DIY Preparation

The Critical Difference

Tax Preparation (what most CPAs do):

• Historical, reactive approach
• Filing what already happened
• Limited forward-looking strategy

Tax Efficient Planning (what Capital Wealth provides):

• Proactive future planning
• Coordinated strategies across accounts
• Integration with retirement income planning

Utah Retirement Tax Strategies

Roth Conversion Opportunities:

• Take advantage of lower current tax brackets
• Avoid future required minimum distributions
• Create tax-free legacy for heirs
• Caution: Coordinate with Medicare premium impacts

Asset Location Strategies:

• Tax-deferred, taxable, and tax-free coordination
• Municipal bond considerations for Utah residents
• Strategic withdrawal sequencing

Real Client Questions from Utah Retirees

"I'm Worried About Spending Too Much" (Cindy from Salt Lake)

The retirement paradox: "I finally have time to enjoy life, but I'm terrified of spending the money I saved to enjoy it."

Mike's response: "It's like being handed keys to a Ferrari and worrying about wearing out the tires. You've worked for this — give yourself permission to live."

Solution approach:

• Create a "guilt-free fun budget" (Capital Wealth calls it an "expense plan")
• Build contingency plans for various scenarios
• Regular plan reviews to maintain confidence

"Should I Retire Early?" (Brett from Utah County)

The perspective shift: Not everyone dreams of fishing and piña coladas. Some people love their work.

Planning focus:

• Freedom WITH purpose, not freedom FROM work
• Flexibility for "two bad days" scenario
• Part-time or consulting options
• Delayed Social Security benefits optimization

"Dream Retirement Home" (Janet & Rich)

Beyond the purchase price considerations:

• Total cost analysis: Property taxes, HOA, utilities, maintenance
• Healthcare proximity: Quality hospitals and clinics nearby
• Weather reality check: Visit during Utah winters, not just summers
• Exit strategy: Resale considerations for future needs

Utah-Specific Retirement Income Planning

Capital Wealth's Retirement Money Map™

Comprehensive analysis includes:

• Income gap calculations — Social Security + pensions + investments
• Tax optimization across all account types
• Inflation planning for 30+ year retirements
• Long-term care reserves — Self-insurance vs. insurance products
• Legacy planning — Utah estate law considerations

Why Generic Financial Planning Fails

Cookie-cutter approaches miss:

• Utah tax implications
• Local healthcare costs
• Regional recreation expenses
• Family proximity factors
• Climate-specific home maintenance

Take Action: Your Utah Retirement Assessment

Immediate Steps

1. Request Social Security statement and review projections
2. Calculate true retirement expenses including Utah-specific costs
3. Review current tax strategy with forward-looking approach
4. Assess long-term care planning for Utah cost structures

Professional Planning Benefits

• Stress-tested scenarios including market volatility
• Tax-coordinated strategies across all accounts
• Regular plan adjustments as life changes
• Confidence to spend appropriately during active years

Special Offer for Utah Residents

For the next five callers: Complimentary Retirement Money Map™ analysis

• Phone: 801-210-5500
• Text: "VISIT" to 801-210-5500
• Completely complimentary — no obligation or commitment required

Conclusion: Retire Right in Utah

The reality of retirement spending is far more nuanced than the old 70% rule. Utah retirees have unique advantages — lower costs than coastal areas, excellent healthcare, proximity to world-class recreation — but also specific planning considerations.

The key insight: Retirement should be about living your best life, not restricting it. With proper planning, most Utah retirees can spend confidently during their go-go years, knowing they're prepared for future care needs.

Remember: You've worked decades for this freedom. Don't let fear of unknown costs prevent you from enjoying the retirement you've earned.

This content is based on the March 14, 2026 episode of Retire Right Radio. For personalized advice regarding your specific Utah retirement situation, contact Capital Wealth Advisors for a complimentary consultation.

Tags

• Utah Retirement Planning
• Retirement Spending Reality
• Tax Planning Utah
• Capital Wealth Advisors
• Mike Stevens
• Retire Right Radio
• Utah Retirees
• Retirement Income Planning