Retirement Planning Guide
Retirement Planning:
Guide to Financially Preparing for Retirement
Planning for retirement is key — and not just because it makes good financial sense, but because you want to genuinely enjoy your life after work. Comfort and peace of mind are vital, and making sure all the pieces of your retirement puzzle come together takes some thinking ahead.
In addition to figuring out how much to save, which retirement accounts make sense for you, and what your investment strategy is — at every point you need to consider your quality of life. Fortunately, this guide will help take you through all the steps you need to create a successful retirement plan.
Figure Out How Much You’ll Need to Retire
Retirement is truly a unique proposition for each person. As such, deciding the amount you will need to retire is partly a financial calculation, but it’s also a personal one. Learn more about the factors you need to weigh to come up with a target nest egg amount that makes sense for you.
Start Saving Now
Time is one of the most important ingredients in your retirement plan. The more time you have, the more time your money has to grow (and the more time it has to recover from the market’s inevitable ups and downs!). So even if you think you’re late to the game, getting started ASAP is still the smartest strategy.
Choosing a Retirement Plan
With so many types of retirement plans, how do you decide which one (or ones) are best? Luckily, there are a few factors that can help you evaluate any plan, and decide which ones make sense for your goals, from contribution caps to tax treatments.
Managing Your Portfolio
Investing for retirement has come a long way in the last couple of decades. Thanks to new regulations, investor protections — and of course sophisticated technology — retirement investors have more options and strategies at their fingertips than ever before.
Maximize your retirement savings with a SoFi IRA.
Interested in opening an IRA online? If you want to take charge of your retirement planning yourself or have us provide assistance, we are here to support you in the process. Choose between a traditional, Roth, or SEP IRA.
FAQ
What are some common retirement-related mistakes to avoid?
There are three common mistakes: procrastination, not taking advantage of an employer retirement account, and filing for Social Security at 62.
• The first is procrastinating, telling yourself you’ll start focusing on retirement soon — and then years slip by. Time is almost as important as the money you save, so take advantage of the time you have.
• Another misstep is not taking advantage of an employer retirement account. If your employer offers a retirement plan, especially if the plan comes with matching funds, sign up for it.
• The last mistake: filing for Social Security at age 62. While 62 is generally the earliest you can claim SS benefits (and some retirees will need to claim Social Security then), it’s also the age at which you’ll get the lowest possible payout. Every year you wait, until age 70, gives you a little more in your check.
At what age do most people retire?
The average age of retirement in the U.S. is between 62 and 64, depending on different sources. Perhaps more important is a data point revealed by a survey conducted by the Employee Benefits Research Institute, which found that the average American worker retired about 4.3 years earlier than they’d anticipated.
In some cases poor health forced people to retire early, in other cases it was a layoff, or some other curveball. This is another reason to start your own retirement plans sooner rather than later, to take advantage of your working years and your ability to save more while you have a steady paycheck.
How much does the average American have when they retire?
If you just want to look at some numbers: People aged 55 to 64 have about $408,420 saved; those aged 65 to 74 have $426,070 saved, according to the Federal Reserve Survey of Consumer Finances.
But that doesn’t tell you how much the average American had in the bank when they actually retired, and whether that amount (whatever it was) matched their goals and covered their expenses.
It’s much more important to do your own personal calculation of where you’re at and where you need to be — and what you need to do to close the gap (if there is one) — to achieve peace of mind for your later years.
How do you know when you’re ready to retire?
This is the most personal calculation of all, because so many factors come into play. You may want to retire when you’re ready to leave your job or you’re ready for something new; your health may dictate when you retire; you may want to accommodate your spouse or partner, or other loved ones.
One thing you can do is make a list of all the factors you deem most important when it comes to making the decision to retire, and sharing it with an advisor who can help you think through all the angles relevant to your situation.