Retirement Planner

Creating a Retirement Plan: Simple Steps For a Solid Future

Planning retirement is an important step to make. The future of Social Security is uncertain, so it is up to each person to plan for their future. The benefits of creating a retirement plan includes deciding when someone retires, how much money they will have and how much free time they have available.

retirement planning

Pre-Planning Enables a Smooth Retirement

The first step in planning for retirement is to decide when to start saving. Your plan must have a starting point. Most experts suggest to begin at least ten years before your expected retirement age. Starting at a younger age is also common. This “early start” approach typically allows flexibility later, even sometimes allowing the benefit of being able to retire earlier than expected.

The second step is to target a desired retirement age. This usually ranges from 55 to 65 years of age. The most common retirement age in the United States is 62…yet every situation has different circumstances to consider.

The third step in planning for retirement is to evaluate your expenses and decide how much money is needed to cover the outgoing bills each year. Expenses, including mortgage, utilities, healthcare and food should be considered, as well as additional funds for hobbies and other enjoyable activities. For example, a person who owns their own home may also  require an additional $10,000 a year for basic health care and other expenses.

A person who retires at 65 should expect to have money for 20 or more years. If the same person from the previous example saved for 20 years, they would need $200,000 to cover expenses. The next part in planning for retirement is to decide how to save that money.

Saving For Retirement

Most people recommend building a diverse portfolio when they speak of retirement. The truth is, saving money for retirement doesn’t have to be complicated. Placing money each month in a savings account could easily achieve someone’s goals over time.

If you decide to start saving for retirement at 30 and want to retire at 50, you will have 20 years to save whatever you can.

Other options for saving include cashier’s deposits, money-market accounts or funds, stocks and bonds. Each of these have advantages and disadvantages, but it’s up to the future retiree to weigh the differences. A smart choice is to open a retirement account.

Retirement Accounts

There are many kinds of retirement accounts, such as traditional and Roth IRAs. A traditional IRA is a personal savings plan, giving tax advantages for saving money for retirement. Money in this account is not taxed until distributed and is tax deductible.

Roth IRAS are individual retirement arrangements. Withdrawals after age 59 1/2 are usually untaxed. Roth IRAS also have flexible rules for withdrawal. Contributions can be taken out without penalty or taxes, but gains can be penalized.

There are also 401k, 403(b) and 457 plans available. 401k and 403(b) accounts allow someone to invest money before taxes are paid on it, allowing it to grow tax-free until its withdrawal. Generally, plans offered by employers offer matching contributions. Self-employed people should look into a Keogh plan, which allows a tax-deferred retirement.

Planning Tips

It’s easy to fall into a day-to-day existence and forget to plan for the future. However, those who manage to think ahead stand to gain increased opportunities to achieve wealth.

Here are some general tips for a solid retirement plan.

Paying down debt early allows financial freedom. Getting the mortgage payment out of the way ten or more years in advance will not only allow you more money to save for retirement, but will give you a greater peace of mind and sense of economic freedom.

Developing a new skill, post-retirement, can be a fun and even a profitable way for someone to spend their time. There is a chance to create supplemental income online or through hobbies.

Keep It Simple: Plan for Retirement Today

Planning for retirement can be as simple or as difficult as you decide to make it. More important than planning for retirement is to follow through with the plan. Even if you are only 25 years old, the sooner you start saving for retirement, the more money you will have and the earlier you can retire. Grab a calculator, evaluate your future and start saving.

4 Responses to Retirement Planner

  1. elvis amihere says:

    hi, i am in africa and i want to join your retirement plan now, so how do i join? please show me the way to follow the instruction.
    please asap.

  2. OSH ZIKI says:


  3. The greatest need for retirement is not what you earn but what you keep?
    Higher income earners received a gift in the 2010 Tax law IRA and Roth IRA changes:
    1. All income restrictions were removed for participation.
    2. A new non-security precious metal asset was added, US Mint Silver Proof Coins.
    a. Substantial savings for Roth Conversions, “The higher the tax bracket the greater the savings”
    b. Now the client can withdraw tax free and it will be greater than the IRA distributions after tax.
    Roth Service Providers can use these assets to Transfer in-kind, valued by the NY Metals Exchange spot market without regard to the cost for the FMV.
    Only Self-directed custodians and Metals Brokers who hold IRA physical precious metals would have implemented the Turnkey Roth Conversion that allows high tax bracket clients to have tax free income, no matter what their broker earns in the market.

  4. Current planning prospects are telling me they depend on Social Security for 40% or more of their budget.
    They are withdrawing another $20K-$40K per year from their IRA or 401K so the avg. retirement income target is $80K to $100K as a trend currently in 2015.
    That trend is reducing the principal and QE reduced interest earnings in conservative investments so low they were and are forced to take on more risk.
    1. 85% of Soc. Sec. is added to reportable income.
    2. 100% of IRA distributions are reported and since they are withdrawing much more than they are earning the principal will be depleted in 15-18 yrs.
    3. Other interest, bond interest, and dividends are added in as reportable income.
    My solution:
    a. Reduce taxable IRA income using a Specialized Roth Conversion (2010 Tax changes provide substantial savings)
    b. Roth Tax free income not reportable therefore substantial reduction or elimination of the Social Security inclusion amount resulting in substantial tax savings.
    c. Increased spendable income

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