Extensions Due -- Fiduciary 9/30/2023 -- Individual & C-Corp 10/16/2023
Retirement planning by the numbers
Saving for retirement requires a good deal of preparation—more so than just about any other area of life. Many people find this to be an overwhelming task, wondering how much to save, when to start and what’s a good spending-to-saving balance.
Developing a retirement savings strategy shouldn’t be difficult. Typically, the hardest part is getting started! The easiest place to begin is to visualize the kind of retirement you want. Then, choose the date that you want to start living your retirement dream. Selecting a date to retire is key because any pension and Social Security distributions will vary depending on your retirement start date—and healthcare costs will depend on whether you qualify for Medicare. You’ll also need to know how many years you have to save in order to meet your goals. To get you started, we offer the following retirement planning tips and tactics for your age group. This will better help you identify where you fall in terms of setting realistic savings goals as you move toward your “golden years.”
In your 20s
Save approximately 8 to 12 percent of your salary. Prioritize 401k contributions to reduce your taxable income. In addition, Roth IRAs can be used to diversify investments.
In your 30s
Avoid increasing your cost of living as your salary increases, and don’t dip into your 401k to buy a home. Aim to hit the maximum contribution in your retirement accounts each year.
In your 40s
Always pay yourself first by continuing to aggressively fund your retirement accounts, even if it means you contribute less to college savings or your kids have to take out a student loan. Continue to be prudent about paring back expenses when you can.
In your 50s
Now is the time to really decrease your expenses and make paying off your mortgage a priority. You likely have enough “stuff,” so use any extra funds to shore up your retirement savings by taking advantage of the IRA “catch-up contribution.”
In your 60s
If you haven’t already, begin estate planning and do everything you can to avoid using your Social Security benefits before age 70 (doing so will significantly increase your benefits). Now is also the time to look at your budget and run a cash flow projection to see how long your current assets will last.
No matter what stage of life you are in, planning and preparing for retirement is always a wise strategy. Your future retired self will certainly thank you for it! If you need assistance with your retirement strategy, please contact our firm.Back to issue