Retirement Planning Guide
Retirement Planning in Colorado Springs: A Guide for Colorado Retirees
Retirement planning in Colorado Springs involves understanding Colorado's tax treatment of retirement income, coordinating military pension benefits, and building a holistic plan that integrates income strategy, tax awareness, and estate planning. The Stellarix Group provides fee-based financial planning designed for pre-retirees and retirees navigating these decisions across Colorado and all 50 states.
Why Colorado Springs
Why Colorado Springs Appeals to Retirees
Colorado Springs offers a distinctive retirement setting at the base of Pikes Peak, with access to outdoor recreation, a moderate climate, and a cost of living that may be lower than Denver. The area is also home to significant military installations, including Peterson Space Force Base, Schriever Space Force Base, and the United States Air Force Academy, which means many residents are military retirees with pension income and unique planning considerations.
For pre-retirees and retirees in Colorado Springs, the financial planning conversation often includes how to coordinate multiple income sources, manage tax exposure on retirement distributions, and protect wealth for the next generation. Whether you are planning to retire near the Academy, in Broadmoor, or anywhere across the Pikes Peak region, a comprehensive approach helps address the financial decisions that come with this life transition.
Colorado Springs Retirement Snapshot
- 1 Home to Peterson Space Force Base, Schriever Space Force Base, and the USAF Academy, creating a large military retiree community
- 2 Access to the Pikes Peak region for outdoor recreation and an active retirement lifestyle
- 3 Colorado provides tax advantages for qualifying retirees, including Social Security and pension subtractions
- 4 Generally lower cost of living compared to Denver, though individual housing and healthcare costs vary
Colorado Tax Rules
How Colorado Taxes Retirement Income
Colorado provides tax advantages that may benefit retirees, though the specifics depend on age and income level. According to the Colorado Department of Revenue guidance updated March 4, 2026, the following rules apply for the 2026 tax year:
| Retirement Income Type | Age 55 to 64 | Age 65 and Older |
|---|---|---|
| Social Security Benefits | Full subtraction if AGI is $75,000 or less (single) or $95,000 or less (joint); otherwise capped at $20,000 | Full subtraction of the entire taxable Social Security amount |
| Pensions, Annuities, and IRA Distributions | Subtraction up to $20,000 | Subtraction up to $24,000 |
| Interaction Note | Any Social Security subtraction claimed reduces the amount available for other pension or annuity income under the same limitation | Same interaction applies |
Sources: Colorado Department of Revenue, "Income Tax Topics: Social Security, Pensions and Annuities" (updated March 4, 2026), available at tax.colorado.gov; Colorado Department of Revenue, "Individual Income Tax: Information for Retirees" (updated March 4, 2026). Research compiled via Perplexity Finance (as of September 2026).
Legislative note: A Colorado legislative bill summary dated March 19, 2026 indicates HB 26-1062 would, starting in tax year 2027, expand the pension and annuity deduction for taxpayers age 55 and older by removing the cap. This is a proposed change, not current law.
These subtractions may reduce state taxable income for qualifying retirees. However, individual results vary based on filing status, income level, and the types of retirement income received. Coordinating with a tax professional is recommended to understand how these rules apply to your situation.
Military Retirees
Military Retirees in Colorado Springs: Coordinating Pension Benefits
Colorado Springs has a substantial military retiree population shaped by decades of service at Peterson Space Force Base, Schriever Space Force Base, and the USAF Academy. Military pensions are generally treated as pension or annuity income for Colorado tax purposes, which means they may qualify for the state's pension and annuity subtraction described above.
For military retirees, the planning conversation may include coordinating military pension income with Social Security claiming decisions, evaluating how the Colorado pension subtraction applies to military retirement pay, planning for survivor benefits and their tax treatment, and integrating military health care benefits into a broader risk management strategy. Each of these decisions involves trade-offs that depend on individual circumstances.
Planning Considerations for Military Retirees
- a Coordinating military pension income with Social Security claiming timing
- b Evaluating how the Colorado pension subtraction may apply to military retirement pay
- c Planning for Survivor Benefit Plan (SBP) coverage and its tax treatment
- d Integrating TRICARE or other military health care benefits into overall risk management
- e Addressing potential second-career income and its impact on retirement tax strategy
Comprehensive Planning
Key Components of a Colorado Springs Retirement Plan
A comprehensive retirement plan typically addresses several interconnected areas. Our team coordinates these disciplines within a single plan so that decisions in one area do not create unintended consequences in another.
Retirement Income Strategy
Coordinating withdrawals from 401(k)s, IRAs, pensions, and Social Security to support spending needs. Withdrawal strategies involve trade-offs between current income and long-term sustainability.
Tax-Aware Planning
Managing the timing and sequencing of withdrawals to potentially reduce tax exposure. Tax outcomes depend on individual circumstances and may involve trade-offs between current and future tax years.
Investment Management
Aligning portfolio strategy with retirement time horizon and risk tolerance. All investments carry risk, including the potential loss of principal, and past performance does not guarantee future results.
Estate Planning Coordination
Ensuring beneficiary designations, wills, and trusts reflect retirement goals. We coordinate with attorneys and CPAs as part of a collaborative planning process. Learn more about estate planning in Colorado Springs.
Risk Management
Evaluating life insurance, long-term care, and disability coverage to address potential financial disruptions. Insurance products involve costs and terms that vary by provider and individual eligibility.
Legacy and Charitable Giving
Structuring charitable contributions and wealth transfer through trusts, donor-advised funds, or other vehicles. These strategies may involve legal and tax considerations that require coordination with professional advisors.
Our Approach
How The Stellarix Group Approaches Retirement Planning
Our team brings credentials including CFP®, CFA, ChFC, CLU, CIMA®, AIF®, CLTC®, ChSNC, and LUTCF to the retirement planning process. As a fee-based firm affiliated with MassMutual through MML Investors Services, we offer financial planning, advisory, and insurance services under one roof, designed to help families navigate complex financial circumstances with clarity.
Our approach is holistic and multi-generational. We coordinate retirement income, tax strategy, investment management, and estate planning within a single plan, seeking to address both state-specific considerations and broader retirement goals. We serve clients in all 50 states from our Denver office, and our Colorado Springs clients benefit from coordinated planning tailored to their circumstances.
Explore our related resources: working with a financial advisor in Colorado Springs and retirement planning in Denver.
Credentials on Our Team
What Sets Our Approach Apart
- 1 Holistic planning that unifies income, tax, investment, and estate strategy in one coordinated plan
- 2 Multi-generational perspective designed for families coordinating finances across decades
- 3 Fee-based model through MML Investors Services, with planning and insurance services available together
- 4 Denver-rooted, serving clients in Colorado Springs and across all 50 states
Avoid These Pitfalls
Common Retirement Planning Mistakes to Avoid
Several common mistakes can affect retirement outcomes. Awareness of these pitfalls may help you approach your plan with greater confidence.
Frequently Asked Questions
Retirement Planning in Colorado Springs: Frequently Asked Questions
How much money is needed to retire in Colorado?
The amount needed to retire in Colorado depends on individual lifestyle, housing costs, healthcare needs, and desired retirement age. Colorado's tax treatment of retirement income, including the Social Security subtraction and pension and annuity subtraction, may reduce the state tax burden for qualifying retirees, but the overall savings target varies widely by household. A personalized planning conversation can help estimate what may be appropriate for your circumstances.
What is a normal fee for a financial planner?
Financial planner fees vary based on the scope of services, the complexity of the client's financial situation, and the firm's fee structure. The Stellarix Group operates on a fee-based model through MML Investors Services. Specific advisory fees, AUM rates, and account minimums are not publicly disclosed and are discussed during the consultation process so that clients understand costs before engaging.
Are retirement planners worth it?
A retirement planner may provide value by coordinating multiple financial areas, identifying tax opportunities, and helping clients avoid common planning mistakes. The potential value of professional guidance depends on individual circumstances, the complexity of the financial picture, and the client's comfort managing these decisions independently. For households with multiple income sources, estate considerations, or business interests, coordinated planning may address gaps that self-directed planning can miss.
What is the biggest mistake most people make regarding retirement?
A frequently cited mistake is failing to coordinate all retirement income sources, tax strategies, and estate planning into a single, integrated plan. Fragmented planning may lead to missed tax opportunities, inefficient withdrawal sequences, or gaps in insurance coverage. Working with a team that addresses these areas together may help reduce the risk of overlooking important connections between decisions.
Is it expensive to retire in Colorado?
Colorado's cost of living varies by region. Colorado Springs generally offers a lower cost of living compared to Denver, though individual housing, healthcare, and lifestyle costs differ. Colorado's tax treatment of retirement income, including the Social Security subtraction and pension and annuity subtraction for qualifying retirees, may offset some costs. Evaluating your specific budget and projected expenses with a financial professional can provide a clearer picture of affordability.
Who is the right person to talk to about retirement planning?
A CERTIFIED FINANCIAL PLANNER™ professional or similarly credentialed advisor can help coordinate retirement income, tax strategy, investment management, and estate planning. Look for a team with recognized credentials, a clear fee structure, and experience working with clients whose circumstances resemble yours. Our team includes CFP®, CFA, ChFC, CLU, CIMA®, and AIF® professionals who serve Colorado Springs retirees and families across the state. Learn more about working with our team in Colorado Springs.
Start Your Plan
Start Your Retirement Plan in Colorado Springs
Retirement planning in Colorado Springs is about more than saving for the future. It is about coordinating income, taxes, investments, and legacy into one plan that reflects your goals. Our credentialed team is here to guide the way, one star at a time.
2000 S Colorado Blvd, Tower 2, Ste 800, Denver, CO 80222 | Serving Colorado Springs and all 50 states