Retirement may feel far away, but planning for it now will give you freedom and peace of mind later. The sooner you start, the easier it gets—thanks to the magic of compounding.
Step 1: Determine Your Retirement Needs
A common rule says you’ll need 70–80% of your pre-retirement income annually. Consider lifestyle, health costs, inflation, and family plans.
Step 2: Choose the Right Accounts
- 401(k): Employer-sponsored, often with matching contributions
- IRA: Individual retirement account (Traditional or Roth)
- SEP IRA/Solo 401(k): Great for freelancers and small business owners
Step 3: Automate Contributions
Set automatic transfers so you don’t have to think about it. Increase the amount as your income grows.
Step 4: Diversify Investments
Don’t rely solely on stocks or bonds. Use mutual funds, ETFs, and possibly annuities for balance and protection.
Step 5: Estimate Social Security
Check your projected benefits via ssa.gov. It’s a piece of your income puzzle—but not the whole picture.
Step 6: Avoid Early Withdrawals
Dipping into retirement funds before age 59½ can lead to penalties and tax consequences. Keep those savings sacred.
Start now, no matter your age. Your future self will thank you.
