Glossary
Retirement Planning
Retirement planning is the process of determining your retirement income goals and the actions needed to achieve them. It involves estimating expenses, saving and investing wisely, choosing the right retirement accounts, and planning when and how to retire comfortably.
Why is retirement planning important?
It helps ensure you have enough money to maintain your lifestyle, cover healthcare costs, and avoid running out of funds during retirement.
When should I start planning for retirement?
The earlier, the better. Starting in your 20s or 30s allows you to benefit from compound growth, but it’s never too late to begin planning.
What are the best accounts for retirement savings?
Popular options include 401(k), 403(b), Traditional IRA, Roth IRA, SEP IRA, and SIMPLE IRA accounts, depending on your employment status and income.
How much should I save for retirement?
Many experts recommend saving 10–15% of your income and aiming for 70–80% of your pre-retirement income in annual retirement spending. However, the amount depends on your goals, lifestyle, and retirement age.
What role do Social Security benefits play?
Social Security provides a foundation of income in retirement, but it’s usually not enough to cover all expenses, so personal savings are crucial.
How do I know if I’m on track for retirement?
A retirement calculator or financial planner can help you assess your savings, expected income, and projected expenses to determine if you’re on pace to meet your goals.
Subscribe to our newsletter
Get the latest on finding, evaluating, and working with financial advisors; delivered right to your inbox.
