Why you need a roadmap to retirement
It’s not enough just to put some money in a 401(k) every payday. Retirement savings is only one part of a complete retirement plan.
That’s why you need to create your own roadmap to retirement, which will help you build the future you really want. Having a comprehensive retirement plan will give you the direction to implement the steps and strategies needed for all aspects of a successful retirement.
This includes developing a timeline, having a plan for social security and other retirement income options, creating a projected budget, and knowing how you’ll pay off debt. These are just a few steps on your retirement roadmap that you’ll want to visit before you retire.
In this post, I’ll go over 18 steps that you can include as you map out your journey to retirement. Even if retirement feels closer than you’re prepared for right now, you can still take steps to build the financial security you’ll need in the future. It’s never too late to start saving and planning for retirement!
The important thing is to consistently take steps that move you toward your big picture.
Knowing the key retirement guideposts as you save for your retirement years will help you stay focused on what’s important, and guide you through each step on your journey towards retirement.
Need some help planning your retirement? Get this FREE mini-workbook and start creating the retirement you want!
Your step-by-step roadmap to retirement guide
There are many moving parts when it comes to planning for retirement. It’s easy to feel a little overwhelmed, especially if you’re a late saver.
That’s why I created this step-by-step guide to help you navigate your journey. Each step will help you get closer to a successful and comfortable retirement.
You can use this guide to learn about those components of retirement that you should give attention to and plan for. *How* you plan for them will be dependent on your unique situation.
Of course, you can do this all on your own (especially if you complete step 17!), but I always encourage my readers to seek out professional advice if they are uncertain about what to do. I believe the expense is worth the peace of mind you’ll get, knowing you’re on the right track.
You might be wondering where you even start. Most would think opening a 401(k) or IRA would be the logical first step. And, yes, you can most definitely start here! In fact, all of these steps can be taken in any order you choose. However, I tried to order the steps as a natural and orderly progression.
So, let’s get tarted! First stop – your vision for retirement.
1. Create a vision for your retirement lifestyle
It’s not always a kick to balance your budget or figure out your 401(k) allocations (*yawn*).
But, when those actions are connected to a crystal clear vision that you are excited about, then you have a pretty compelling purpose to motivate you.
When you define your dream retirement, you have your why behind all your whats.
This will be your fuel for persistence, delayed gratification, motivation, and hope. It’s what will keep you moving forward.
If you’re married, you should have a dream meeting with your spouse. You may be tempted to go solo on this step, but that will just set you up for an unrealistic outcome. Whether or not your spouse is on board with financial planning, it’s important to know what you both want out of retirement.
Your dream meeting doesn’t have to be anything fancy. It just needs to be intentional.
- Plan a time to talk specifically about your dreams and goals during retirement. Pick a place, set a date, and get a sitter for the kids if necessary. You want to give each other your undivided attention without distractions and interruptions.
- Decide ahead of time that you will withhold judgment and be supportive of the other’s ideas. Go into it being open to whatever your partner shares. This can be hard, especially for women! But if you plan to respond this way, you’ll have a better chance of being successful.
- Write down your questions so you have something to guide your conversation. Include questions that address your values, ideas and expectations, but also ones that focus on practicalities like when and how.
- Talk about the big picture, as well as the day-to-day. What do you want your daily routine to look like? And what are your big objectives from year to year?
- Be sure to record the important parts you talked about. You’ll want to revisit what you talked about often, and make adjustments as you both work toward your dream retirement together.
Keep in mind, retirement could potentially last 20 to 30 years. During this last season of your life, you’ll go through phases that are more active than others. Think about what you really want to do when your health is at its best and you have the capacity to enjoy more activities. Also, discuss how you plan to handle declining health as you each get older.
The first step in being purposeful about the retirement process is defining what you want it to look like. Put a dream meeting date with your spouse on your calendar, and start creating a vision together!
2. Create a retirement spending plan
You have a clear idea of what you want to do once you retire. Now you need to determine a budget that will support your vision. This will help you determine your annual expenses and what your savings will need to cover in retirement.
It’s critical that you are as specific and realistic as possible with this step. If anything, you should overestimate what you will need to support your retirement lifestyle.
You can create a retirement spending plan based on your budget today.
Keep in mind that you may only need 70-80% of your pre-retirement income. Some of your biggest expenses – like a mortgage payment, auto loan, or college tuition – could possibly be behind you.
However, you may have determined (from step 1) that you really want to travel more, or take up new hobbies, both of which could increase your income needs.
The retirement process has its phases, and you’ll probably be more active in the early years. In the later years, you may spend less on recreational activities, but more on healthcare. You should plan your budget accordingly.
Include all sources of retirement income, like social security, pension income, and investment income.
Also, don’t forget to account for taxes and healthcare during retirement. These two expenses can often be overlooked but can be a significant portion of your budget.
You could even create various budgets for alternative scenarios, so you have a big-picture view of your financial situation under different circumstances. You may want to create a “bare bones budget”, to calculate the minimum income you’ll need in retirement. Knowing your minimum required income will be very helpful if you’re behind in your retirement savings.
Also, you should consider what your income sources and needs will be when you or your spouses passes away. After my father died, his retirement pension was cut in half. So, my mother had to cut back on her expenses considerably. Be sure you know how your income will change under these circumstances.
For more details on how to create a retirement budget, here’s a helpful article to guide you.
3. Increase your net worth on your way to retirement
Your net worth is basically everything you own minus everything you owe.
What you’re left with is a snapshot of where you are financially. More importantly, it’s a helpful reference point to see how close you are to your goals.
What I like about the net worth metric is that it’s an honest measure of every great decision and terrible mistake you’ve ever made with your money.
It doesn’t just consider how much you make, and it isn’t only focused on what you owe. Instead, it takes all of the good and bad into account and tells you this is where you’re at.
Your net worth will always be changing, based on your changes in assets and liabilities. Remember, it’s a snapshot of this point in time. That means the number itself doesn’t matter nearly as much as how the number is changing.
With net worth, you want that number to go up. So check it regularly to make sure you’re on track with your goals and heading in the right direction. Optimize your financial resources to keep increasing this important metric.
For specific instructions on how to figure out your net worth and get a free worksheet, click on over to my post about calculating your net worth.
4. Identify your financial independence number for retirement
You have a vision for the future and you know where you’re at today. Now you need to identify your target.
Your financial independence number is the net worth you’ll need to reach by retirement to attain financial freedom. In other words, how much retirement money you need to save between now and your retirement date in order to fulfill your vision.
The simplest way to do this is by using an online retirement calculator. There are many to choose from, but Forbes recommends these 5. I’ve personally used Dave Ramsey’s R:IQ assessment tool.
Each will have different features so pick the one that suits you best. One important detail to be aware of is what rate of return the tool is using. Some will assume a specific percentage, others will ask you to input one you think is realistic.
Look for one that will tell you how much you need to save each month to reach your goal on time. And, for a more accurate picture, use a calculator that factors in compound interest and makes adjustments for inflation.
5. Create a timeline for retirement planning
You’ve identified some important information that will help you start putting together a roadmap to get to your dream retirement. A tool that will help you start breaking things down is a timeline.
The retirement process is a very personal one. We all have our own unique circumstances, preferences, and financial situations. Some of us may be at similar points on the timeline, but the roadmap between getting from here to there will look different for each of us.
That’s why it’s crucial to take things into your own hands and determine your own journey. You can’t base your future on how much your neighbor has in his 401(k) or when your cousin decides to retire.
You need to figure out for yourself what steps you need to take and when, to ensure you reach your goals on time.
Once you know your why (vision), where you are today (net worth), and where you need to be (financial independence number), you can start determining which whats will happen when:
- When is your retirement date?
- When will you have your credit cards paid off?
- When will you have the mortgage paid off?
- When will you reach certain savings milestones?
- When will you start taking social security?
- When will your pension income kick in?
- When will you start to withdraw funds in retirement?
- When will you get long-term care insurance?
- When will you downsize or move?
These are just a few points on your timeline that you can determine. And don’t be concerned about being exact. Your plan will be an ongoing work in process as you get closer to retirement.
The goal is to create a structure that you can refer to so you meet your goals on time and you know what you need to do next.
6. Get on a budget to achieve your retirement goals
Your budget is your roadmap to get to where you want to go.
If you follow a budget that is based on specific financial goals, you will know which steps to take next, what obstacles to avoid, and when you will reach certain milestones.
It’s all about being intentional with your spending and saving, and accounting for every dollar.
You may already be on a budget, so perhaps you just need to make some adjustments based on the financial goals you’ve laid out. Maybe you need to add more to savings or start attacking debt more aggressively. Line up these tactics with your timeline so you stay on track.
If you’re really behind on your retirement fund, you may need to have a heart-to-heart with your spouse about making major life adjustments or significant sacrifices. It might not be enough to just cut out cable or reduce how much you eat out.
If you are committed to reaching your financial goals by the time you retire, you may have to make bigger changes. These could include selling your home and/or your vehicles, getting second jobs, or even eliminating the contributions you’re making to your kids’ college fund.
A budget will help you see where your money is going, and how you can change its direction in order to increase your net worth. Remember, increasing your net worth is the goal!
If you’ve never created a budget, you can read my post on how to create a zero-based budget.
7. Make a plan to pay off debt before retirement
As of 2018, 80% of Americans in their 50s had some form of debt. For those 65 or older, 60% were still carrying debt in retirement.
If you are carrying any amount of debt, you have not yet attained financial freedom – no matter what your net worth is. As long as you owe money to someone else, you are chained to that creditor. Not only that, you are living under a higher degree of financial risk, which only increases as you get older.
The best way to ensure you have the retirement you dream about is to be completely debt-free by your retirement goal date (and even sooner if possible!). And yes, that means the house, too.
The idea of being completely debt-free within 10-15 years may seem absolutely impossible to you right now. Maybe you’ve lived paycheck to paycheck your whole life and you can’t see how this could ever be achieved.
You need to decide how important your retirement dreams are to you, and what you’re willing to sacrifice to reach them. Because, the fact is, you are in control. You get to tell your money where to go.
Will you need to make some uncomfortable and difficult decisions? Probably. Will you need to make major sacrifices? Most definitely.
But, when you start taking full responsibility for your life and you’re not blaming your past or your spouse or your circumstances or anything else, you will find a way.
Commit to paying off your debt. Reduce your spending and increase your income. Make it a part of your budget, set a goal date, and put it on your timeline.
If you need some guidance, check out my post on how to get out of debt.
8. Reduce your current household costs
Cutting the “fat” out of your spending now is a great discipline that will prepare you for living on a comfortable retirement budget. You’ll learn to live on less, and you’ll have more to pay off debt and increase savings.
Go through your budget line by line and find those day to day living expenses that are draining your bank account.
Some examples might be:
- Subscription fees
- Impulse buys
- Dining out
- Cable TV
- Cell phone plans
You won’t be able to completely cut out everything, but there are many discretionary expenses you can definitely reduce. The more you need to save, the more ruthless you’ll need to be with this process.
Consider every possibility to cut expenses, even if it hurts! The comforts we’ve grown accustomed to are just that – they aren’t necessities.
Are you willing to sacrifice some comforts now, so you can someday live out the retirement you dream about later?
Make a commitment to your goals, and do whatever it takes to reach them. Nobody ever reached old age and regretted canceling cable or using an older cell phone. It’s a temporary inconvenience that will reap greater rewards in the future – and your future is worth it!
For more ideas on how to reduce wasteful spending, read my post about budget leaks and how to fix them.
9. Amp up your retirement savings
Dave Ramsey recommends you pay off debt before saving for retirement. But, personally, I say … it depends.
I agree with Dave that saving a small emergency fund should be priority numero uno – at least $1,000. This gives you a little cushion for those unexpected expenses so you’re not going deeper in debt.
But after that, I think you have to weigh your options.
For example, the return on my husband’s employer retirement plan is consistently above 10% (often closer to 13%). I have no debt with an interest rate higher than this. In fact, I always try to keep my credit card balance on a 0% promotional rate. My student loans are less than 6% and our medical bills are interest-free. We recently refinanced our mortgage and got it lower than 5%. So, our retirement savings are growing at a rate more than double what we pay for our debt.
For this reason, I’ve chosen to keep adding to our retirement savings while we’re paying down our debt.
It’s your choice. Dave gives great advice on how to budget and get rid of your debt. But it’s ultimately up to you how you want to manage your money. Consider all of your circumstances and come up with a plan that you feel is right for you.
If you want to start adding more to your savings while you’re still paying down your debt (or if you’ve already paid it off), then building a 3-6 month emergency fund and adding to your 401(k) are smart steps.
Take full advantage of your employer-sponsored retirement plan. This will give you some tax advantages and a greater return than a regular savings account. You may even receive a match up to a certain percent. This is free money – so don’t pass this up. Check with your HR department to find out what your company offers.
If an employer-sponsored retirement plan like a 401(k) isn’t available to you, then look into an Individual Retirement Account (IRA). The contribution limit is lower than a 401(k), but it’s an excellent alternative to help you build savings faster.
Whatever savings vehicle you use, be sure to automate your savings. This way, you eliminate the choice. It’s just one more thing off your financial plate, and it’s a great way to stash more away for the retirement process.
Decide on a monthly or weekly fixed amount, or even a percentage of your monthly income, to put toward savings. Add this to your budget like it’s an expense and pay yourself every month. Even if it’s $20 a week!
Get in the habit of saving money. Once you start seeing your balance increase, you’ll be motivated to find ways to save more.
For more ideas on how to increase your savings, read my post about how to catch up on your retirement savings.
10. Increase your income to save more for retirement
This is where a lot of people get stuck.
However, there have never been more opportunities to increase your income than right now. From creating an online business to getting a side hustle to offering your own services, you could easily generate more money to save for retirement.
So, if you have a hard time imagining a way to increase your income (without winning the lottery), you’re probably using a scarcity mindset.
A scarcity mindset (sometimes called a “fixed” mindset) keeps you stuck in a mental loop of limiting beliefs that prevent you from achieving the goals you’ve set for yourself.
Most people who are overwhelmed with their financial situation and see no way out are operating out of a scarcity mindset.
But here’s the good news: you can change your thoughts.
And, when you do, you’ll develop more empowering beliefs:
- you’ll start to think “big picture”
- you’ll believe there are unlimited opportunities
- you’ll embrace and accept change
- you’ll take a proactive approach to life
The mindset you adopt will determine your financial future.
Of course, there are practical steps to expanding your income options, like getting a second job or investing in a rental property or starting a side hustle. But first, you must believe that these opportunities are available to you and that you are fully capable of increasing your income through them.
To learn more about creating a healthier money mindset, read my post about changing your mindset to reach your financial goals.
11. Be proactive with your health to minimize expenses in retirement
The best way to minimize healthcare expenses in the future is to take care of yourself today.
To be honest, I’m the worst at going to the doctor. If I don’t feel sick, I assume I’m not. But we both know this is not the most accurate diagnosis method.
There’s a reason why preventative healthcare is typically fully covered under insurance. It’s because the insurance companies know that if you stay healthy and catch illnesses early, they will have to pay out less to providers and won’t have to deal with collecting payments from the insured.
So, take advantage of this benefit and get those annual exams!
In addition, make the necessary changes to live a healthy lifestyle.
We all know what that means:
- eliminate the processed foods
- get up out of the La-Z-Boy and start moving
- do things that make you happy
These three things will go a long way in giving you a longer, healthier life – and keep more retirement money in your pocket.
12. Have a plan for insurance and long-term care
Now, on the flipside of playing offense with your health, you also need to have a defensive strategy. This is where insurance products comes in.
You pay for insurance to reduce risk, and the older you get, the greater the risk of getting hit with big medical bills for declining health issues.
Though many things may change in healthcare policy between now and your retirement date, it’s still wise to start planning. Know where your healthcare will come from, how much it might cost, and what coverage will be sufficient.
And, don’t forget to include this expense in your retirement budget. One study found that the average retiree spends approximately $4,300 per year on out-of-pocket healthcare expenses. This is over $350 a month!
The bad news is that healthcare costs are only going to continue to rise. Your dream retirement could literally come off its rails if you don’t account for healthcare costs in retirement.
The good news is, as soon as you turn 65 you’ll be eligible for Medicare. Although Medicare doesn’t cover everything, it will take care of most of your insurance needs.
Separate from traditional healthcare insurance is long-term care insurance, which covers services associated with a chronic medical condition, disability, or disorder. It’s an important part of your long-term financial plan, because you could deplete your savings quickly if you have to pay for these services yourself.
If you’re in your 50s and you don’t yet have a plan for getting long-term care insurance, now is the time. If you wait until you need it, you won’t qualify for it. Do your research for what it covers, how much it costs and which companies provide it.
Finally, make sure you’re covered in other areas as well, such as your homeowner’s insurance and life insurance. Read about the eight types of insurance that Dave Ramsey says you can’t live without.
13. Have a social security strategy
Although your social security check won’t come close to fully supporting your dream retirement, it’s still a key aspect of retirement planning. It’s important to know the rules surrounding withdrawal options and benefit eligibility.
If you were born after 1960, your “full retirement age” is 67. This is when you will be eligible to receive full social security benefits.
However, you have the option to start withdrawing your retiree benefits before then (as early as 62) or delay your benefits indefinitely. Both options come with very different consequences:
- If you start receiving social security benefit payments before the full retirement age of 67, your benefit will be permanently reduced. This means you will not receive full retiree benefits at 67. The amount of reduction will depend on how early you start receiving this retirement benefit.
- If you delay receiving social security checks until after your full retirement age, you will be credited with an increase in benefits. This increase is permanent, and the amount depends on how long you delay the benefits. The increase is capped at 70 years of age, even if you continue to delay.
It seems that delaying would be much more beneficial than withdrawing early. But you may have very legitimate reasons to start receiving your checks before 67.
Don’t discount the significance of having a retirement strategy for your social security benefits, because once you begin there are serious consequences to changing your mind.
Here is a good article about when to withdraw your social security benefits in retirement. However, you should also visit the SSA website to make sure you are getting the most accurate and updated information. You can also find several online Social Security benefit calculators to help you figure out the numbers.
14. Account for inflation and taxes
At the time this post was published, the U.S. inflation rate was 8.3%. This is over twice the average rate of 3.8% between 1960 to 2021.
If you don’t consider inflation in your retirement planning, your standard of living could be drastically affected in your later retirement years.
Although you’re probably safe planning on an average inflation rate around 4%, it’s still smart to plan for the unexpected. Social Security can help as a hedge against inflation, as it adjusts for the entire duration of the benefit.
Another important consideration is tax planning, which is a critical piece of your roadmap to retirement. It’s important to be aware of the estimated taxes you will need to pay once you retire.
For example, if you contribute to a traditional 401(k), you will need to pay income taxes on your withdrawals. However, if you have a Roth IRA, you won’t have to pay taxes (because your employee contributions were already taxed).
So, make a point to know what taxes you’ll be responsible for, at what rate, and for how long. It might be worth your while to get some professional tax advice before making any big plans. Then, include these calculations in your estimated retirement spending plan.
15. Determine your withdrawal rate for retirement income
With the possibility of having a 25+ year retirement, you’ll need to plan your spending very carefully. This is why having an appropriate withdrawal rate is important.
Your withdrawal rate is the percentage you can withdraw annually from your retirement savings without running out of money before you die.
There are several factors unique to your situation that will help you determine this rate, such as the total amount of your savings, your projected retirement income, and your annual retirement spending.
Thankfully, someone has already determined a safe withdrawal rate for the general population that would ensure their savings would last 30 years. In 1994, William Bengen first promoted the “4% rule” as a guideline for withdrawal rates, based on extensive research in historical market behavior. Since then, this rule for retirement savings has been adjusted to 4.5% for inflation.
This is a good place to start, but don’t stop there. Remember, you know your financial situation better than anyone else.
Having your own personal withdrawal rate in mind as you build your retirement fund will help you know that you’re on track to having enough to support you throughout your life.
Also, this rate will most likely change throughout your retirement years, depending on how your investments are doing, your annual spending, and the current rate of inflation.
The best thing to do is meet with a financial professional and get their valuable advice on a sustainable withdrawal rate based on the future savings you plan to have.
If you want to know more about Bengen’s 4% rule for retirement, check out my posts here and here.
16. Create an estate plan
Estate planning is about taking care of your loved ones after you’re gone, and it should be an important piece of your financial plan. You want to be the one to control who gets what after you’re no longer there, and to voice your wishes yourself.
Having a will or family trust in place will ensure that your loved ones will receive what you have intended for them.
By creating a solid estate plan, you’ll also be minimizing estate taxes and other legal matters for your heirs. Making this an intentional piece of your financial strategy will either greatly reduce or even eliminate the tax bill on your estate after you’re gone.
Another benefit to your family is having very clear directives to guide them. This will prevent unnecessary conflict and decision-making in an already difficult time. Make sure you have all beneficiary designations established so there are no assumptions or confusion.
As you plan how you want to live out the remainder of your years in retirement, don’t forget to also care for your loved ones after you’re gone. There are steps you can take today that will shield them from hardships after your death and also bless them with financial stability.
Putting together an estate plan is a complex undertaking that has serious consequences if done incorrectly, so make sure you meet with an estate planning attorney to help you put all the pieces together. They can review your current estate planning objectives and help you move in the right direction.
You can learn more about estate planning by reading How To Set Up An Estate Plan.
17. Educate yourself in retirement planning
According to Robert Kiyosaki (the author of Rich Dad, Poor Dad), the number one thing you should do to increase wealth is to educate yourself.
The great news is you don’t have to look far to find content. Blogs, podcasts and the public library provide free education at your convenience. There’s no excuse for saying “I didn’t know”.
A big part of gaining control of your financial future is taking complete responsibility for every area of your life.
This may be a mindshift for you, but it’s crucial to fulfilling your retirement dreams.
One way of taking control is being proactive with learning about money management.
Commit time weekly (or daily!) to learn about investing, budgeting, real estate, retirement plans, increasing income, and anything else you will encounter on your path to financial freedom. If you don’t know, find out!
Websites and books can take you pretty far, but probably the best thing you could do is find a financial advisor that will walk you through some of the complicated parts. You don’t want to leave your future completely up to your own knowledge. It’s important to get the advice of a professional to make sure you’re fully aware of all the details that go into retirement planning.
If you prefer to learn online, read my post on 21 FREE Online Personal Finance Courses.
18. Review your retirement plan regularly
Once you’ve hit all of these points in your retirement plan, you will be in a great position to retire on time and live out the retirement you’ve dreamed about.
However … life happens and things will inevitably change. You’ll need to be flexible with new circumstances as they arise (good or bad) which means making adjustments to your plan when necessary.
Maybe you’ll come into a windfall of money, which greatly increases your savings, and your retirement date and withdrawal rate will change.
Or maybe you’ll be dealt some unexpected blows and you’ll need to make some course corrections.
Also, you will likely want to adjust your asset allocation as you get closer to your retirement date.
Either way, it’s important to revisit your plan regularly as you move forward on your journey towards financial freedom.
During your 50s, annually is probably enough. But as you get closer to retirement age you’ll want to keep a closer eye on your plan.
Even small course corrections in the last few years before retirement can make a big difference in the long run.
When to start planning for retirement
It’s never too early to start planning your retirement. But, if you procrastinate for too long, you could get to a point where it’s too late to achieve your retirement goals.
Of course, your timeline will largely depend on your personal circumstances. But, a good rule of thumb is to get a solid plan in place at least 10 years before you retire.
This will give you a decade for your savings to grow, additional opportunities to increase your income, and the room to ride out any major downturns in the stock market. You’ll also reduce your personal retirement risk, so you can build a strong financial future.
Spend this time making any major financial decisions in light of your retirement goals. This might mean cutting back on college tuition for your kids, downsizing to a smaller home, and focusing on debt payoff.
How much does retirement cost?
Calculating an estimate of what your retirement lifestyle will cost on a monthly and annual basis is an important part of retirement planning. Use your current budget to determine a future spending plan, including discretionary and non-discretionary expenses. Consider the possibility of having no debt in retirement, with your mortgage paid off. This could drastically reduce your average costs, and you could possibly live on 70-80% of your pre-retirement income.
What retirement obstacles should I plan for?
Even with the most detailed plan, you will likely encounter some obstacles on the way to retirement. These could include stock market crashes, an economic downturn, increase in taxes and insurance premiums, higher inflation, or the loss of a spouse. You may also end up retiring before or after your assumed retirement age, or have to agree to the division of retirement benefits in a divorce. Any one of these circumstances could potentially create a financial crisis for you, if you’re preparing to retire soon. Be sure to diversify your investment portfolio and build a healthy emergency fund to protect yourself from these potential detours.
When should I start planning for retirement?
It’s never too early to think about retirement and put your plans in motion. However, having a margin of 10 years before retiring should give you enough time to build savings, increase income, and get out of debt.
How much does the average retired person live on per month?
The Bureau of Labor Statistics reports that the average U.S. household with someone 65 or older spent an average of $48,7791 per year between 2016 and 2020.
What are sources of retirement income?
You should have multiple streams of income during your retirement years. These could include retirement funds like a 401(k) and IRA, Social Security benefits, pensions, any inheritance money, passive income, and regular employment income.
How can I make my retirement savings last?
A general guideline to ensure your retirement savings last is to use an appropriate annual withdrawal rate. Many financial advisors suggest that a rate between 3.5 to 4.5% should allow your savings to last for 30 years. This is not a hard and fast rule, but a good starting point to consider in your retirement strategy.
Don’t forget to grab your FREE Retirement Planning mini-workbook! Make a plan to turn your dream retirement into a reality.
Create your own roadmap to retirement
There’s so much that goes into planning your retirement. Don’t leave it to chance, and don’t wait for the last minute.
Be intentional wlth the last 10 years in the workforce so you give yourself time to reach your financial goals for retirement. A decade may sound like a long time, but don’t fall for the temptation to procrastinate. This is an essential time to work toward your goals and prioritize your objectives.
So don’t squander the time you have left, because you will never get it back. Be purposeful about your present so you can create the most fulfilling future you can dream of.
It’s not too late! Today is the best day to get started, so take control and start planning!
. . .
This article is for informational purposes only, it should not be considered financial or legal advice.
Not all information will be 100% accurate or apply specifically to your situation.
Consult a financial professional before making any major financial decisions.
Other posts you may enjoy:
- How To Save $1000 A Month (Without Working More)
- 35 Personal Finance Ratios To Help You Crush Your Goals
- Pros and Cons of a Health Savings Account (and How To Qualify)
- Financial Peace University Week 6: The Critical Role of Insurance
- 9 Reasons You Shouldn’t Be Paying For Your Kids’ College Education
- Ultimate Estate Planning Checklist & Guide: 17 Steps To A Lasting Legacy
- 20 Genius Reasons To Postpone Retirement
- What Questions To Ask Before Retirement (So You’re Well-Prepared)
- What Happens If You Don’t Have A Living Trust? (6 Honest Reasons You Don’t Need One)
- Get Your RISE Score: 5 Steps to Determine Retirement Readiness
- The 401(k) and the IRA: Which One Is Better?
Want to remember this post for later? Pin it to your favorite Pinterest board!