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Where do I start with retirement planning, and how does that change with my age bracket?

February 8, 2013

Advisor answers

Don Maxon

Don Maxon

MFP, CFP®

Retirement planning basically consists of determining where, financially, individuals are now and where they need to be when they retire in order to support a desired lifestyle during retirement.

The planning process incorporated in the simple statement above involves analysis and planning for numerous factors including the following:

· Remaining work life expectancy

· Life expectancy during retirement, years of retirement

· Savings rate, timing and investment allocation decisions

· Investment returns ...

Martin Weil

Martin Weil

MBA, CFP®

Start as soon as you begin employment so that you will reap the greatest benefits through the “magic “of compound interest.

I advise 25 year-old clients to contribute 10% of their income to 401Ks or other retirement plans. Keeping that up, they should be able to largely self-fund their retirement needs. Later starts require saving an increasingly higher percentage of income to reach the same end goal.

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Christopher Arnold

Christopher Arnold

ChFC, CFP®, CASL®

The best way to get started with retirement planning is to simply stop thinking about it and take action. Contribute to your 401(k) at work. Set up an IRA (Individual Retirement Arrangement). Don’t over think it – the most important thing is to begin and get your funds into your investment! The reason why is that the longer you have your money invested, the longer it has to compound and grow.

Your age will generally correlate with the amount of risk that makes sense for you to take with your retirement investments. When younger, it...

Lyman Howard

Lyman Howard

CFP®, CFA

Retirement planning is a unique challenge, because it requires immediate and repeated action to earn a very long range future reward. The future is undefined and largely unpredictable, but it will someday be the present day, though that can be difficult to imagine. It is very hard for workers to feel urgency to save for retirement, particularly when they have other pressing demands on their income and savings today. Yet getting started early is perhaps the most critical element of success due to the benefits of compounded inte...

By all means read all the responses posted by advisors because what makes sense to one person in a response does not necessarily resonate with the next person. Each response takes a slightly different path. Here is my view based on my experience.

1. Most of your savings will take place after the age of 50. At that point in life you are or close to being an empty nester is you have children, your income is higher than it has ever been and there is a chance both spouses(assuming your are married) are working. &nbs...

George Sugden

George Sugden

CIMA, CFP®

One of the most important things you can do to start planning for retirement is to start as early as possible. It's also a good idea to start with an understanding of your risk profile, time horizon and financial objectives/income need. If you work with a financial professional, have a retirement plan created that will estimate how much you need to save to reach your income need in retirement. There are also many online tools available to help with estimating an appropriate savings rate. Retirement savings es...

While I agree with most of the answers posted above, the real place to start your retirement planning is to try to get a vision of the retirement lifestyle you want to live. Is your vision one of traveling the world, joining a golf club, or simply slowing down a bit and taking some local classes? Once you have a vision (which will most likely change over the years), you can't start figuring out what resources you will need to get to where you want to go.

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Craig Allen

Craig Allen

CIMA, CFP®, CFA

You should begin financial planning immediately. Although your needs and objectives will change throughout your life, there are specific planning needs that require you to plan early and plan consistently throughout your life. The earlier you begin saving for retirement, the more time you have for your assets to grow. As you age, the level of risk you should take with your investments, in general, will decrease. Earlier in life you may be saving for your first home, or for educational expenses for children, whi...

You should start to prepare for retirement on the first day of your first job. Saving early is a very powerful first step to achieving a comfortable retirement. If your employer provides a retirement plan such as a 401k you should try to max out your contributions from the start. When you are young you can be a little more aggressive and invest more in stocks since you have many years to ride out the ups and downs of the market and stocks are a good tool for growing your retirement assets above the rat...

Guy Baker

Guy Baker

CLU, ChFC, AEP, CFP®

There are some basic steps that will help you answer your question.

First - do a comprehensive inventory of your existing investments. How much capital do you have? Where is it invested? What is your expected return for those investments over the next 10-15 years?

Then determine your time horizon. It probably should be assess on two levels - your accumulation years and your disbursement years. These two numbers will give you an good idea of how to structure your investments.

Third, determine a goal. How much income do you need at the cro...

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