10 Ways to Plan Your Retirement

By Shannon Gosney
In Budgeting
May 8, 2013
15 Comments
1877 Views

This post was inspired by Genworth Financial. All opinions expressed in this post are 100% mine. For more information about long-term care, visit the Genworth Financial website.

As a work-at-home mom, I think about paying the rent, the utilities, and putting food on the table.  I have to be honest and admit that I don’t think a whole lot about planning for retirement.  After typing that sentence, I immediately realize that Frank and I need to get on the ball and start planning for retirement!  I read an article and learned about are 10 simple ways that you and I can start planning for retirement.

Businessman holding money.

1 – Save as much as you can as early as you can.

Don’t think it’s ever too late to start saving, because it never is.  However, the sooner you begin saving, the more time your money has to grow.  Gains each year build on the prior year’s – this is the power of compounding and the best way to accumulate wealth.

2 – Set realistic goals.

When planning your retirement expenses, base them on your needs rather than rules of thumb.  Be honest about how you will want to live in retirement and how much it will cost.  Then calculate how much you need to save for retirement to supplement your Social Security and other sources of retirement income.

Young Businessman Holding 401k Sign

3 – A 401(k) is one of the easiest and best ways to save for retirement.

By contributing money to a 401(k), you get an immediate tax deduction, tax-deferred growth on your savings, and – usually – a matching contribution from your company.

4 – An IRA also can give your savings a tax-advantaged boost.

Just like a 401(k), IRAs can offer huge tax breaks!  There are two types of IRAs: (1) a traditional IRA that offers tax-deferred growth, which means you will pay taxes on your investment gains only when you make withdrawals, and if you qualify, your contributions may be deductible; or (2) a Roth IRA, which doesn’t allow for deductible contributions but does offer tax-free growth, which means that you owe no tax when you make withdrawals.

5 – Focus on your asset allocation more than on individual picks. 

Your long-term returns will be greatly affected by how you divide your portfolio between stocks and bonds.

Chess

6 – Stocks are best for long-term growth.

Stocks have the best chance of achieving high returns over long periods of time.  With a healthy dose, you can ensure that your savings will grow faster than inflation, increasing your purchasing power of your nest egg.

7 – Don’t move too heavily into bonds, even in retirement.

Many who retire tend to stash most of their portfolio in bonds for the income.  Unfortunately, over a period of 10 to 15 years, inflation can easily erode the purchasing power of bonds’ interest payments.

8 – Making tax-efficient withdrawals can stretch the life of your nest egg.

Once you’re retired, your assets can last several more years if you draw on money from taxable accounts first and let the tax-advantaged accounts compound for as long as possible.

9.  Working part-time in retirement can help in more ways than one.

Working keeps you socially engaged, as well as reduces the need and amount you reduce annually from your nest egg once you retire.

10.  There are other creative ways to get more mileage out of retirement assets.

An example is that you might consider relocating to an area with lower living expenses, or even transform the equity in your home into income by taking out a reverse mortgage.

How are you going to start planning for your retirement?

About Has 4152 Posts

Shannon Gosney is the author of The Mommy-Files, a national blog with a loyal following. She has a Bachelor's Degree in Marriage, Family, and Human Development with a Minor in Business Management. With 3 active boys, Shannon loves living on the Central Coast near San Luis Obispo, California, as well as traveling around the world. A full-time Social Media and Professional Blogger, Shannon also serves as a National Brand Ambassador for many well-known companies. Her blog focuses on motherhood, family fun activities, traveling and recipes while providing professional opinions on products, performances, restaurants, and a variety of businesses.

15 Responses to “10 Ways to Plan Your Retirement”

  1. Emily says:

    Great tips! I think its hard to find motivation to plan for retirement when y ou’re young but it’s so important to prepare early.

  2. Shannon, my husband is a bankruptcy lawyer, consumer credit expert and blogger. You should hook up with him!

  3. Anne Younger says:

    I am happy to know that right now, we are on track for retirement, I am hoping I can say the same thing further down the road!

  4. Tee says:

    Thanks for sharing! I definitely need to think more about retirement and savings. It’s so hard to do these days when you live pay check to pay check.

  5. diane says:

    these are all very good tips. We try hard to plan for retirement and use several of these ideas. Fingers crossed that it is enough!

  6. Those are great tips! I hope I have done well when it comes for my time to retire.

  7. Great info! I guess it’s never to soon to start thinking about retirement savings

  8. Jeana says:

    Retire-what? Savings? Oh boy. I’m pretty sure I fall into the category of “I haven’t saved a dime for myself, but I’ve already started multiple savings funds and mutual accounts for my son”!

  9. Danielle says:

    It’s seriously in everyone’s best interest to sit down and read this post! I truly think that one can’t educate themselves enough on good financial planning for retirement.

  10. I’vve watched my parents go through retirement with no savings. Thanks for the tips on how to get started I don’t want to end up like them!

  11. These are great steps! I haven’t started saving for retirement either, you’ve got me thinking I need to!!

  12. Jamie says:

    Truth: This is one area I haven’t put much thought into, but really should start thinking about it.

  13. Francine says:

    Such an important topic. Thanks for sharing!

  14. Jennifer Young says:

    My husband and I have just started putting money aside for retirement. It is actually something I think about a lot. I really don’t want to make the same mistakes as my parents made. Thanks for the tips, they were helpful!

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