Contributor, Benzinga
December 20, 2023

You can dread it. You can try not to think about it. No matter what, it’s still a good idea to save for retirement.

Retirement is a major life milestone that requires careful financial planning. Many people rely on their retirement income to cover their expenses and ensure a comfortable lifestyle during their golden years. It doesn’t have to be scary or complicated.

In fact, with proper planning, budgeting and goal-setting, retirement can change from a cold inevitability into a fun prospect. Let Benzinga guide your retirement savings so you can become more confident as you achieve your post-work goals. Additionally, you want to learn more about an estate plan, how to secure your family’s future after your death, how to appoint a trustee (if necessary) or executor, how to support your spouse in this process, etc.

Why You Can’t Wait to Start Planning for Retirement

It’s never too early to begin retirement planning — in fact, the earlier you start, the better off you’ll be. The average American retires at age 65, though every once in a while, you’ll come across newsworthy cases of 30- and 40-year-old retirees.

Though Americans are known for their hard-working nature, the same can’t always be said for how diligently they save for retirement. Note that even if you wait until later in life to start saving, it’s never too late to start.

Best Advisers for Retirement Planning

Check out the list below and pick an adviser to help you plan for retirement no matter what stage of life you're in. Remember, these professionals can help you with estate tax issues, planning, inheritance tax questions from your family, beneficiary designation, power of attorney (if necessary), small business succession planning and more.

How to Start Planning for Retirement

If want to retire in your 60s, that could mean you’ll need to replace your income for a few decades. When you set your goals, aim to have the wherewithal to live comfortably. Nobody can predict the future, but you can live well and plan accordingly.

Step 1: Figure Out Your Retirement Goals

First, it’s important to determine what lifestyle you may want to lead in retirement. Will you jet-set around the world? Or would you rather hang up a hammock in your backyard? Consider the expenses of each particular condition so you can determine which goal is right for you. After all, taking care of your grandkids could be much cheaper than opening up the pottery studio you’ve always dreamed about.

Step 2: Determine Your Budget With What You Have

However you plan to enjoy your retirement, break out what you imagine your cash flow needs will be and what income you have coming in. Start with your Social Security benefit each month. According to the Social Security Administration, your monthly retirement benefit is based on your highest 35 years of earnings.

If you haven’t worked for at least 35 years, the benefit would be lower because years without earnings do not count. Even if you could start collecting your retirement benefit at age 62, the average retirement age is 67. At the same time, you may want to retire earlier or later. Some people like working and don’t want to stop or have need to stop until they simply cannot keep up. Others, however, prefer to retire early and pursue other passions. This is why you must look into your budget, how long you will need to live and what you plan to do after you retire.

Depending on how much you have saved, you may want to prolong your monthly benefit until age 70, which would make it a much higher amount than if you begin to collect at age 62. Other factors (such as life insurance benefits if you’re widowed) may give you another source of cash flow.

It’s a good idea to tabulate fixed expenses and revenue streams and analyze what you’ll have against what you need. Besides your Social Security benefit, there’s a number of ways to fill in the gaps.

Step 3: Fill in the Gaps

Use Your Employer’s 401(k)

Do you have a 401(k) that you can fall back on during retirement? A 401(k) is a retirement savings plan sponsored by an employer. You save and invest a piece of your paycheck before taxes are taken out.  

A 401(k) can be an enticing way to pad your retirement because of all its advantages. Anyone over the age of 21 can open a 401(k). Check to find out how long it takes to become fully vested in your company’s 401(k) — vesting refers to the amount of 401(k) funds you can take with you when you leave your company.

Also, find out about the employer match, which is the amount that your employer will contribute toward your retirement. You can contribute up to $23,000 to a 401(k) in 2024.

You’ll pay a penalty if you withdraw funds before age 59½ and you do pay taxes on top of that withdrawal.

Open a Roth IRA or Traditional IRA

You could also open a Roth IRA instead of a 401(k), or decide that a traditional IRA makes the most sense for you. You fund a Roth IRA with money you’ve already paid taxes on. Roth IRAs offer tax-free growth and tax-free withdrawals in retirement. As long as you own the account for five years and you’re age 59 ½ or older, you can withdraw money when you want without paying federal taxes.

There are income requirements for the Roth IRA, however. If you’re single, your income must be less than $138,00 to qualify. If you’re married, you and your spouse’s adjusted gross income must be less than $218,000. Check out Benzinga’s picks for Best Roth IRAs.

A traditional IRA account means that you pay taxes upfront so you won’t have to when you withdraw your earnings — traditional IRA distributions are not required until after age 70 ½. Traditional IRAs feature tax-deferred growth and tax-deductible deposits. If you anticipate that you’ll be in a lower tax bracket when you decide to retire, it’s a smart move to go with the traditional IRA.

Both accounts are different but will assist you in your retirement no matter what. Still unsure about which is right for you? Take a look at Benzinga’s best IRA providers.

Other Ways You Can Save

There are a number of ways you can save money and have a higher-quality retirement. You can start by streamlining your life. Budgeting is a great way to save money. Create a spreadsheet or use an app to determine your fixed expenses and see where you can cut unnecessary spending. It may be tempting to grab a latte at Starbucks every morning, but be mindful of how much even a little expense can add up over a period of time.

A part-time position can be a great way to support yourself during retirement. Our country continues to trend toward a gig economy, which can set up convenient revenue streams for you.

Step 4: Monitor Your Progress and Make Adjustments

The final, critical step is to track your retirement savings and investments. There are a plethora of user-friendly budgeting tools that can help monitor your progress, such as Mint or Personal Capital.

These personal finance apps can help you with your investments through email notifications, new ways to save money and even play “what-if” scenarios to keep your retirement game on point.

Making adjustments may be necessary along the way, but these tools can aid you in your goals. For example, Personal Capital shows variables that might affect your retirement in order to keep everything running smoothly.  

Step 5: What Happens When You Pass On?

You have saved, but you must also speak to an attorney and collect your estate planning documents. An estate planning attorney will help your partner, assist you in drafting a living will, help set up a health care proxy (if needed), help set up a living trust and ensure that your administrator or executor is ready to handle their duties.

It’s Never Too Late (or Early) - Start Saving Now!

Once you figure out how you want your retirement to look, you can shape it to be exactly how you dreamed. Note that even if you’re in your 40s or 50s and haven’t saved a nickel toward your retirement, it’s okay.

Follow the same steps outlined above but aim to max out your Roth IRA and 401(k) limits. If you want to put yourself in the best position possible, contribute to both Roth IRA and 401(k) for maximum benefit.

Frequently Asked Questions


What are some good retirement plans?


Some good retirement plans include contributing to a 401(k) or individual retirement account (IRA), investing in stocks, bonds, or mutual funds, and considering annuities or real estate investments. It is important to consult with a financial adviser to determine the best retirement plan based on individual goals and risk tolerance.


What is the 4% rule for retirement?


The 4% rule for retirement is a guideline that suggests withdrawing 4% of your retirement savings annually to ensure it lasts for at least 30 years. This rule is based on historical data and assumes a balanced investment portfolio. However, it is important to note that individual circumstances, market conditions and other factors can impact the effectiveness of this rule. Consulting with a financial adviser is recommended to determine the best retirement strategy for your specific situation.


How much should I save for retirement?


The amount you should save for retirement depends on various factors such as your current income, desired lifestyle in retirement, and your desired retirement age. Financial experts generally recommend saving 10-15% of your income for retirement. However, it is advisable to consult with a financial adviser who can assess your individual circumstances and help develop a personalized savings plan for your retirement goals.