Design a countdown-to-retirement plan

Posted on February 26, 2013 at 6:01 pm

Retirement can be some of the most rewarding years of your life.Planning for retirement is important at all ages.

(USA Today) Yet many people jeopardize the quality and security of their golden years by not planning. They spend their 20s searching for a partner, their 30s climbing the corporate ladder and their 40s juggling work meetings and their children’s soccer games. As retirement nears, they fret about how little they’ve done to prepare for the next few decades of their life.

One of consumers’ biggest problems? Not saving enough — or sometimes, at all — for retirement.

A Harris Interactive survey conducted in November 2010 found that more than one in five adults over the age of 65 had not saved for retirement. Among adults of all ages, one in three had not saved for retirement.

Mike Smith, however, began saving in his 20s. Smith, 55, put away 8% of his income and then eventually increased it to 10%. He believes he’ll be able to retire in the next few years because of his careful planning.

“The only thing I advise my children is to start saving early,” says Smith, of Seattle.

Saving money early, and often, is one step to making your golden years secure. Here are others to consider as you approach retirement.

15 years before retirement

If you don’t have a financial plan, now’s the time to make one. This will allow you to track your savings and help you figure out how much you need in retirement so you won’t run out of money.

“When you’re 15 years away from retirement, that’s when you have time to plan and make corrections along the way if markets don’t perform well,” says Wei-Yin Hu, director of financial research at Financial Engines, a provider of financial advice for 401(k) plans.

Your finances can also recover if health emergencies arise.

When Roy Emmett was in his late 40s, his daughter needed a bone marrow transplant. The operation depleted his savings.

“I had my furniture and my two cars when I got through with that,” says Emmett, who retired this year at 66.

He rebuilt his nest egg by saving 15% of his income each year. He also cashed out of stocks and put his money into bonds in the fall of 2007 to lock in gains. By doing so, he dodged the market turmoil that followed as the U.S. economy slipped into recession.

To help you get started with retirement planning, websites including, and provide free tools.

If you need a professional’s help, check out the National Association of Personal Financial Advisors, an organization of fee-only planners, or the Financial Planning Association, a trade group for planners who charge fees as well as commissions.


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