You decide it is time to get serious about retirement, you search once, and unfamiliar words pour out. 401(k), Roth, annuity, IUL. Somewhere in there the thought arrives: am I already too late?

Here is the thing. Every one of those words belongs to the last step. In a first meeting, simply putting the steps back in order settles most of the worry. The order goes like this.

Step 1 — What do you spend in a month right now?

Nothing elaborate. Open the last three months of statements and find roughly what leaves your account each month. Without this number, everything after it is guesswork.

Step 2 — How much of that will you still need?

Usually a little less. Commuting costs disappear, and the mortgage is often finished. Some things go up instead — medical costs, and the ordinary spending that comes with having time. Precision is not the point; somewhere around 70–80% of today is close enough to work with.

Step 3 — Find out what is already coming

This is the step where people relax. Most have more in place than they thought.

• Social Security — create an account at ssa.gov and it shows your estimate. Free, about ten minutes
• Employer plans — the current job, and any accounts left behind at old ones
• Your spouse’s side — this only works if you look at both together

Step 4 — Subtract, and size the gap

Step 2 minus step 3. What remains is what you need to create for yourself each month. Once that single number exists, product conversations finally make sense.

Then, and only then, the products

How you close the gap — contributing more to a workplace plan, opening an account of your own, or setting up income that arrives every month for life — depends on the size of that number and the years you have left. The next articles take them one at a time.