Plan for Your Retirement at Every Career Stage

Plan for Your Retirement at Every Career Stage

No matter if you have been saving for retirement for years or if you are just starting your career, it is never too early or too late to plan for your future.

We are all getting closer to the day when we will say goodbye to working full-time. It may be next month or 40 years from next month, but either way, good planning will help to make your retirement a reality. If you haven’t already done so, take action now and think about retirement and retirement planning.

Retirement is a Long Way Off, Right?

Retirement may be the furthest thing on the minds of young workers, but contributing to a retirement plan early in a career can go a long way to making retirement dreams come true.

Workers who contribute (many experts believe 10 percent of salary at this age) to a retirement plan early in their career can take advantage of the power of compounding. Compounding is the “snowball” effect that happens when your earnings generate even more earnings. You receive interest not only on your original investments but also on any interest, dividends and capital gains that accumulate—so your money can grow faster and faster as the years roll on.

Slow and Steady Wins the Race

Workers in the prime of their careers should continue participating in their employer’s retirement plan. Contribute as much as possible, at a minimum to the level necessary to receive any employer matching contribution. Increasing the level of contribution by the same percentage of any raise in salary you receive can help to offset any financial pinch.

It’s Never Too Late to Start

While it is never too late to save for retirement, late starters may need to change their lifestyles to assure they will be able to retire. These late starters should try to max out their contributions. For 2019, contributions in 401(k) and 403(b) plans top off at $19,000 while the “all sources” maximum contribution (employer and employee combined) is $56,000. It also allows people ages 50 and over an additional “catch-up” contribution of $6,000.

Watch Out For These Pitfalls

What are some mistakes workers make as they plan their retirement?

  • Not Having a Plan. The No. 1 mistake people make in retirement planning is not having a plan. It is not enough simply to fund your retirement plan then sit back and watch. Set your retirement goals in writing and commit to them. Financial coaching can help you with your goals.
  • Spending Instead of Rolling Over. Most people switch jobs multiple times during their career. Too many of these people cash out rather than rollover their retirement plans when switching jobs. That means besides paying taxes on the money and paying a 10 percent penalty if they are under age 59 ½, they are starting over and destroying the compounding interest. Live by this rule: once money is saved in a tax-deferred account, never take it out until after you retire.
  • Not Knowing How Much You Need to Retire. As you near retirement age, look at your current salary and add up your expenses. Don’t forget to include your medical costs in retirement. Calculate how much you will need to retire and live comfortably. Younger workers have the advantage of more time to make adjustments, but everyone should plan ahead to avoid not having enough money.
  • Not Checking Your Retirement Account’s Performance. You have a stake in how the money in your retirement account is doing, so don’t set things to autopilot and assume everything is fine. Do some research. Find out how well your investments performed last year or over the past five years. Make changes where necessary. If you are not comfortable with making investment decisions on your own, target-date retirement funds make a good choice. These funds take the guesswork out of choosing plan investments by selecting the right combination of assets based on when you plan to retire — your “target date.”
  • Relying Only on Social Security. Social Security will provide only a small portion of the funds you need for financial security in retirement. According to the Social Security Administration (SSA), for most retirees, Social Security replaces only 39 percent of pre-retirement wages. Social Security benefits are a nice buffer, but you will need personal savings and a retirement account that offers tax benefits to ensure your retirement dreams can come true.

For more information, contact Retirement Planning Services at Christian Brothers Services, at 800.807.0700 or visit us online at

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