Preparing for retirement

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Preparing for retirement should be done well in advance of your actual start to retirement. Navigating through the myriad of available information can be a daunting experience. Where should you start?

We often recommend the Bogleheads' Guide to Retirement Planning, along with selections from Books: recommendations and reviews and Taylor Larimore's Investment Gems.

Additionally, the US Employee Benefits Security Administration offers free publications which will get you pointed in the right direction.[1] Use this information as a supplement to information found eleswhere.

Employee Benefits Security Administration

In the Retirement section of Publications and Reports, the most relevant publications are:[note 1]

Additional publications:

Below are brief overviews of two retirement planning publications.

Top 10 Ways to Prepare for Retirement

Below is a brief summary of Top 10 Ways To Prepare For Retirement.

Financial security in retirement doesn’t just happen. It takes planning and commitment and, yes, money.

  1. Start saving, keep saving, and stick to your goals
  2. Know your retirement needs
  3. Contribute to your employer’s retirement savings plan
  4. Learn about your employer's pension plan
  5. Consider basic investment principles
  6. Don't touch your retirement savings
  7. Ask your employer to start a plan
  8. Put money into an Individual Retirement Account
  9. Find out about your Social Security benefits
  10. Ask Questions

Taking the Mystery Out of Retirement Planning

The online version of Taking the Mystery Out of Retirement Planning includes interactive worksheets (online calculator) that you complete as you read each chapter. A fully illustrated 62-page Adobe PDF narrative can be downloaded here.

The Table of Contents:

  • Chapter 1 - Tracking Down Today's Money
  • Chapter 2 - Tracking Down Future Money...At Retirement and After
  • Chapter 3 - Tracking Down Future Expenses
  • Chapter 4 - Comparing Income And Expenses
  • Chapter 5 - Five Ways To Close The Gap
  • Chapter 6 - Making Your Money Last
  • Chapter 7 - Tracking Down Help For Retirement
  • Resources

This booklet uses three time periods in charting your retirement savings. The starting point is today, when you are about 50 to 56 years old and plan to work approximately 10 to 15 years more. This is a good time to take stock of where you are in terms of retirement savings and set financial goals you would like to achieve in the 10 to 15-year period you plan to work.

The second point in time is the day you retire, when you are about 65 to 66 years old. That period between now and then is an important one. In those (approximately 10 to 15) years, you will have time to put more of your paycheck to work in a retirement account. It will grow, not only from your additional savings, but also from the “miracle of compounding,” the world's greatest math discovery, according to everyone's favorite genius, Albert Einstein. This is the result of earnings from interest and from investments continually increasing the base amount.

Finally, the third time period used in this booklet is the approximately 30-year span you hope to enjoy retirement. It is the time period experts suggest you plan for, based on the average 65-year old American male living 17 more years and the average 65-year old female living 20 more years. These are only averages, so planning for 30 years will help you avoid outliving your income.

As you read through this booklet, keep an eye on the Timeline for Retirement that follows. Some of the terms, like "catch-up" retirement contributions beginning at age 50, may be new to you. The timeline offers some milestone opportunities to make changes so you can have the kind of retirement you want. The time to start is today.

Notes

  1. US government publications have no copyright restrictions.

See also

References

  1. The US Employee Benefits Security Administration is an agency under the U.S. Department of Labor (DOL). See this forum post for further details on the DOL.

External links