Retirement planning isn’t just about money—it’s about securing your freedom. It’s your roadmap to a future where you’re not worried about bills, where your time is yours again, and where you’re free to enjoy life on your terms. Whether you’re decades away from retirement or already closing in, having a smart strategy today will give you peace of mind tomorrow.
Why Retirement Planning Matters More Than Ever
People are living longer. That’s great news—but it also means your money needs to last longer. Unfortunately, many Americans aren’t financially prepared. In fact, studies show that nearly half of today’s retirees either have cut back spending—or will need to—because their savings aren’t enough.
Even more concerning? A large percentage of retirees rely on Social Security for the majority of their income. But Social Security was never meant to cover everything. It’s designed to replace just 40% of the average worker’s salary. That leaves a massive gap to fill.
If you want to enjoy your retirement—not just survive it—planning is essential.
Start with the Big Questions
To build a retirement plan that works for you, ask yourself:
When do you want to retire? Retiring at 60 vs. 70 changes how much money you need.
Where will you live? Living expenses can vary drastically by location.
What lifestyle do you want? Your goals will shape your savings needs.
How will you cover your expenses? Will you rely solely on Social Security, or do you have other sources like a pension or 401(k)?
These questions help you map out a clear picture of the future you’re working toward.
How Much Money Will You Need?
There’s no magic number, but there is a simple framework:
Estimate your annual expenses in retirement. A good rule of thumb is 80% of your current income.
Subtract any expected income (Social Security, pension, etc.).
Multiply your net annual need by 25. This gives you a ballpark of how much to save, based on the 4% rule (which assumes you can safely withdraw 4% annually for 30 years).
Example:
Pre-retirement income: $100,000
Estimated expenses: $80,000/year
Expected Social Security: $30,000/year
Gap to cover: $50,000/year
Total retirement savings needed: $50,000 x 25 = $1.25 million
Saving vs. Investing: Know the Difference
Putting money in a savings account is not enough. If you save $5,000 a year at 1% interest, you’ll have about $208,000 in 35 years. But if you invest that same amount and earn 7% annually, you’d have nearly $700,000.
That’s the power of investing.
Before you start investing, make sure you have:
3 to 6 months of expenses saved in a high-yield savings account for emergencies.
No high-interest debt, like credit cards.
Once you’re ready, invest in assets that grow over time—stocks, ETFs, or retirement funds.
How Much Should You Save Each Month?
Aim to save 15% of your income.
If that’s too much right now, start smaller. The key is to build momentum:
Contribute enough to get your employer’s match in a retirement plan.
Start with 6%, then increase by 1% each year or after every raise.
Consistency over time makes a massive difference.
Types of Retirement Plans
You’ve got more options than ever:
Employer-Sponsored Plans
401(k), 403(b), 457, Thrift Savings Plan
Often includes employer match
Pensions
Rare in the private sector but common in public service
Provides guaranteed income for life
IRAs (Individual Retirement Accounts)
Traditional IRA: Tax-deductible now, taxed later
Roth IRA: Taxed now, grows tax-free
Self-Employed?
Solo 401(k), SEP IRA, or SIMPLE IRA
Allows business owners to enjoy similar tax advantages
Tax Strategies for Retirement
Roth accounts are powerful if you expect to be in a higher tax bracket later. Your contributions aren’t deductible today, but withdrawals are tax-free.
Also consider:
Roth 401(k), Roth 403(b), Roth 457
Health Savings Accounts (HSAs) for tax-free medical withdrawals
State tax exemptions on retirement income (varies by state)
Tapping Home Equity in Retirement
If you own your home, it may be one of your biggest assets. You might consider:
Downsizing to reduce costs and unlock equity
Reverse mortgage to turn your equity into retirement income (though not for everyone, and requires careful consideration)
Final Thought: Start Now
The best time to start retirement planning was yesterday. The second-best time is now.
Don’t wait for the “perfect time.” Begin with what you have. Increase your contributions as you’re able. And if you’re unsure how to get started, speak with a Certified Financial Planner.
Your future self will thank you for taking action today.