No matter what you plan to do with your time, retirement should be spent pursuing activities you love. But how can you fully embrace the lifestyle while ensuring you have enough money to cover it?<\/p>\n\n\n\n
By taking into account your estimated living costs, how soon you want to retire, your risk tolerance, and the power of tax-advantaged accounts, you can design a strategy to fit your personal needs.<\/p>\n\n\n\n
See how Quicken helps you grow your nest egg. Preparing for retirement is a lifelong process that involves regularly evaluating your finances, lifestyle, and goals. A solid, yet flexible financial plan can help to guide your investment strategy along the way. <\/p>\n\n\n\n The United States government sets the full retirement age at 67, which is when you can draw your full Social Security check. However, your ideal retirement age is a completely personal decision.<\/p>\n\n\n\n Whether you\u2019re a Gen Z\u2019er pursuing a FIRE lifestyle (financial independence, retire early), or a baby boomer who isn\u2019t ready to give up working full-time yet, remember that retirement looks different for everyone.<\/p>\n\n\n\n Keep in mind that your finances also play an important role. While retiring younger may sound desirable, it means that you\u2019ll realistically have fewer years to grow your nest egg. If you quit working too early, your savings may be insufficient to support you during retirement. <\/p>\n\n\n\n Naturally, balancing your desire to retire with your financial ability to support it requires some math. The Quicken retirement calculator<\/a> makes the number crunching easy. You can estimate and optimize your retirement age to determine the retirement savings required. <\/p>\n\n\n\n Your retirement age and the income you\u2019ll need to sustain your lifestyle are closely related. The more you save in your working years, the more opportunities you can enjoy later in life. <\/p>\n\n\n\n Generally, experts recommend planning to spend 80-100% of your pre-retirement income in retirement. But these estimates are generic and, honestly, don\u2019t account for your unique situation. <\/p>\n\n\n\n Ask yourself some big questions, like: <\/p>\n\n\n\n Remember, the answers to these questions can help you realize and unlock your dreams \u2014 but, they will also greatly impact how much income you\u2019ll need in retirement. From there, you can build a ground-up estimate of your expenses, factoring in inflation.<\/p>\n\n\n\n So, how much will you need? It\u2019s often recommended to save 15% of your income for the entirety of your career, usually 40 years. As a goal, you may want to save up 15 to 20 times your gross annual income before retiring. <\/p>\n\n\n\n But those are just rules of thumb. What you really want to know is how much you\u2019ll need to support your specific lifestyle goals when the time comes. For that, try our retirement calculator<\/a>.<\/p>\n\n\n\n To get started, plug in your:<\/p>\n\n\n\n From there, you can determine how much you can expect to save by the time you retire \u2014 along with how much you\u2019ll need. You can also estimate how much extra you should contribute if you fall short of your goal. <\/p>\n\n\n\n Want to run scenarios to see how much you\u2019d need to stash away to retire in 5 years? The calculator can do it! Go ahead and play around with retiring earlier, generating larger returns, and putting away more savings to see the possibilities for your retirement. <\/p>\n\n\n\n Don\u2019t forget to plug in your other income sources, like your expected Social Security checks, dividends, real restate rental income, and so on. (You\u2019ll find that under the \u201cRetirement (Optional)\u201d tab.) Remember, earning extra income means you\u2019ll have to save less to reach your goals. <\/p>\n\n\n\n When choosing which retirement investing avenues you\u2019d like to pursue, it\u2019s important to remember that not all investment accounts are ideal for retirement. In fact, the federal government makes retirement savings easier with special classes of \u201ctax-advantaged\u201d retirement accounts<\/a>.<\/p>\n\n\n\n See how Quicken helps you track your 401(k), IRA, and more. <\/p>\n\n\n\n You can own two main types of tax-advantaged retirement accounts: accounts offered through your employer, such as 401(k)s, and individual retirement accounts, or IRAs. <\/p>\n\n\n\n Depending on where you work, your employer-sponsored accounts may also include 403(b)s, 457s, and Thrift Spending Plans.<\/p>\n\n\n\n So how do these retirement accounts work? After signing up, you deposit a portion of each paycheck into your plan, which is automatically withdrawn on payday \u2014 before taxes! Some employers even offer matching contributions, which are usually capped at a maximum amount yearly.<\/p>\n\n\n\n IRAs, on the other hand, are individual accounts that you can open yourself. Some IRAs let you choose your investment assets on your own, while others may use robo-advisors to invest for you based on your goals and finances.<\/p>\n\n\n\n Learn more about 401(k)s versus IRAs here<\/a>.<\/p>\n\n\n\n 401(k)s and IRAs both come in traditional and Roth varieties, allowing you to choose whether you\u2019d prefer a tax-deferred or tax-free retirement. So what does this mean? <\/p>\n\n\n\n With a traditional IRA or 401(k), you contribute pre-tax dollars and then pay taxes during retirement. <\/p>\n\n\n\n With a Roth IRA or 401(k), you contribute after-tax dollars and enjoy tax-free withdrawals in retirement \u2013 even on your capital gains.<\/p>\n\n\n\n Learn more about Roth vs traditional accounts here<\/a>.<\/p>\n\n\n\n The next step in retirement investing is choosing an investment strategy that makes your retirement savings work for you. While stocks and bonds may comprise the bulk of your portfolio, you can easily diversify with common investment options like:<\/p>\n\n\n\n Depending on your employment situation, you may be able to invest in some of these options through your workplace plan. Or, you might prefer to open an IRA and choose your own assets. <\/p>\n\n\n\n If you still have 2-3 decades until retirement, you might consider branching out into higher-risk, higher-reward assets to boost your returns. <\/p>\n\n\n\n For instance, many investors buy rental properties or real-estate-related securities to increase their passive income potential. Some go for even riskier \u201calternative assets,\u201d like precious metals, commodities (oil, beef, etc.), or cryptocurrencies. <\/p>\n\n\n\n If you\u2019ve maxed out your annual retirement contributions or want to explore creative investments, you\u2019ll probably need to open a regular, taxable brokerage account. You won\u2019t enjoy the same tax advantages for retirement, but they generally offer more investment options.<\/p>\n\n\n\n Whether you’ve been meticulously saving for retirement or you’re just getting started, there’s no time like the present to refine your strategy. If you really want to kick things up to the next level, you should: <\/p>\n\n\n\n Retirement investing doesn\u2019t happen overnight. To achieve the retirement of your dreams, you\u2019ll have to do some research, plan ahead, and then keep your plan on track. <\/p>\n\n\n\n After setting up your financial strategy, add all your savings and investment accounts in Quicken so you can easily see your progress toward your retirement goals<\/a>!\u00a0\u00a0<\/p>\n\n\n\n
\n Continue \u2192<\/a><\/p>\n<\/div>\n\n\n\n\nCreate a financial plan for retirement: 5 steps<\/h2>\n\n\n\n
1. Pick your retirement age<\/h3>\n\n\n\n
2. Figure out how much income you need<\/h3>\n\n\n\n
It\u2019s your retirement \u2013 live it on your <\/em>terms!<\/h4>\n\n\n\n
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3. Figure out how much savings you need<\/h3>\n\n\n\n
Using Quicken\u2019s retirement calculator<\/h4>\n\n\n\n
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Planning for your future<\/h4>\n\n\n\n
4. Choose your retirement accounts<\/h3>\n\n\n\n
\n Continue \u2192<\/a><\/p>\n<\/div>\n\n\n\n\n401(k)s vs. IRAs<\/h4>\n\n\n\n
Traditional versus Roth accounts<\/h4>\n\n\n\n
5. Select your retirement plan investments<\/h3>\n\n\n\n
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Consider alternative assets<\/h4>\n\n\n\n
Try taxable accounts <\/h4>\n\n\n\n
Making it to retirement<\/h2>\n\n\n\n
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