You’ve cultivated your financial vineyards over the course of your working life, and you’re nearing retirement.

Will the harvest be enough to keep you in fine wine for the rest of your life?

The assumptions, calculations and projections you make today will determine what your retirement looks like — whether you’ll be able to afford the villa in Majorca or an apartment in Macon, to sail your gigayacht around Saint Tropez or your Sunfish on a state park lake.

“Retirement planning has become much more complex than it was during the era of pocket watches and pensions,” says Doug Sullivan, wealth strategist for Northern Trust. He cites some of the changes over the last 30 years:

• Boomer retirees are more active than their parents. They’re less likely to have paid off their houses and have more expensive hobbies, such as skiing and sailing. After all, 70 is the new 50.
• They’re more likely to work. More than three-fourths plan to work at least part time in retirement, according to an AARP study.
• They’re living longer. The odds are that at least one member of a 65-year-old couple today will live to be 91, according to the American Academy of Actuaries. So savings must last longer.
• Fewer than one in five rely on a company pension. Retirees today have more responsibility for managing their assets and more investment options to consider.

Changing demographics coupled with new strategies to extend your wealth and minimize risk have increased the need for retirement income planning — “decumulation planning,” as it’s sometimes called. And more sophisticated tools are available to negotiate the complexities of income planning.

“A qualified advisor should be able to show you how to best put your money to work, so you don’t have to,” says Sullivan, also a certified financial planner.

A price on paradise
The first step is taking a complete inventory of your current assets. This should include all qualified and non-qualified accounts as well as assets, such as:

• Individual stocks and bonds
  
• Mutual funds
  
• Pensions
  
• Annuities
  
• Trusts
  
• Dividends and interest
  
• Inheritances
  
• Social Security
  
• Real property

Now, for your expenses.

Start with what you’re currently living on. Then figure some costs will go down. No more driving to work or suiting up for meetings. Studies have shown that older adults also spend less on restaurants and entertainment than time-pressed middle-agers. This may offset some of the impact of inflation.

However, other costs are likely to shoot upwards. The U.S. General Accounting Office estimates long-term-care (LTC) costs will triple during the next 20 years. That doesn’t mean everyone needs LTC insurance, though.

About 35% of people age 65 will eventually use nursing home care, but the average stay is only 2.4 years, according to the Centers for Disease Control and Prevention. Only 5% will spend more than five years there. Costs also vary dramatically from one state to the next, from $36,000 in some southern states to more than $100,000 in Connecticut.

Whether you purchase long-term-care insurance or set aside money on your own should be an individual decision made with the help of a qualified advisor, Sullivan says.

The same goes for big-ticket items — the swimming pool, the sauna, the ultralight plane, the Catalina Morgan sailboat and the home on Kiawah Island.

“Make sure luxury items make sense for your situation and then factor in the cost of ownership,” Sullivan advises.

This should give you a pretty good idea of what you’ll need to sustain you in your new life.

Most financial advisors recommend that you withdraw no more than 4% of investments to make sure your money lasts. A 60-year-old couple who wants to withdraw $100,000 a year would need $2.5 million in savings. However, spending patterns decline with age, so you might be able to spend a little more during the first few years of retirement.

Tending the vines
As you shift from saving to spending, you may need to reallocate your assets or change your investment plan. After all, where you once invested dividends, you may now need to live off them.

Sullivan offers these suggestions:

Don’t overconcentrate. If company stock in your 401(k) represents more than 10% of your overall assets, that’s a red flag.

Combine to conquer. If you have multiple 401(k)s or IRAs, you might want to consolidate them. This can save paperwork and time for tax purposes.

Don’t forget about net unrealized appreciation. If you have employer stock in your 401(k), there are potential tax savings available by having the stock distributed outright to you instead of rolled into an IRA. By doing so, you pay ordinary income tax only on the cost basis of the stock, not the full-market value. Should you decide to sell the stock, you would pay capital gains on the appreciation, which likely would be less than ordinary income tax.

Don’t put yourself at risk by being too conservative. You should expect your assets to maintain you for another 25 or 30 years. That means you’ll want a growth engine like stocks to offset inflation. Old school thinking was no more than 10% to 20% of a portfolio, but now many financial advisors recommend up to 50% or more, depending on your circumstances.

Harvesting the grapes
After you have allocated your assets to reflect your altered state, you’ll need to arrange a monthly income with regular distributions from your assets to cover your living expenses.

“The income to pay your expenses should come from both stable as well as liquid sources,” Sullivan says. “You don’t want to be forced to sell a security to pay your rent.” (See “New Lifestyle, New Passions”)

Stable sources might include income from dividends, bonds, Social Security, pensions or annuities. You should be worrying about your tee time at Winged Foot or Pebble Beach, or fitting in a massage before dinner, not whether you will outlive your investments.

For most, advancing years bring a retreat from worries. After all, retirement is, as the saying goes, “the time in your life when time is no longer money.”

And, you can spend it as you so desire.