On average, Americans spend 20 years in retirement, according to data provided by the US government.

Still, many fail to plan for their retirement until their late 40s or even 50s. In fact, only half of Americans have calculated how much they’ll need for their retirement at all.

Ultimately, this leads to serious stress and financial disadvantages later in life.

Here’s what you can do right now to avoid this by planning ahead – for a relaxing retirement.

1 – Outline Your Retirement Needs

To begin with, figure out how much money you will need on a monthly or annual basis during retirement.

Experts estimate that it takes 70% to 80% of your pre-retirement income to maintain your standard of living.

However, this only applies if you don’t go into retirement with pending debt or an unpaid mortgage.

You also need to consider aspects such as your likely living situation and possible health issues.

Is there a history of dementia, diabetes, or cardiac troubles in your family? Then you should calculate the costs of a nursing home into your budget.

When it comes to assisted living, pricing can vary wildly. A senior living community in Charlotte that offers memory care and a large outdoor area, for instance, will come with a completely different price tag than a shared room in a New York City nursing home.

2 – Figure Out Your Time Horizon

Next, you need to estimate realistically what your time horizon looks like.

How long do you have to go until you hit retirement age? The longer this run-up period is for you, the better – it will give you access to more investment options. In return, you’ll need to offset more inflation, though.

3 – Assess the Pension Plans Available To You

As a next step, assess the retirement savings plans that are available to you. Many employers offer pension plans, such as 401(k) plans. If this is the case, signing up and contributing all you can is the best baseline course of action.

You’ll have to pay fewer taxes, contributions are usually deducted automatically, and your company may even kick in more.

4 – Consider Alternative Investment Options

In addition to this baseline plan, look into alternative options, such as individual retirement accounts (IRAs). If you’re under 50, you can contribute up to $6,000 annually to this type of account. If you’re older, this limit goes up.

Other investment options are stocks and bonds. Stocks typically are a good option if you have over a decade to go to your retirement. Short-term volatility is usually balanced out by higher long-term returns. In contrast, bonds provide a higher level of security.

No matter how you structure your retirement portfolio, though, be sure to calculate the after-tax rate of investment returns.

5 – Stick To Your Goals and Don’t Touch Your Savings

Finally, the most important step is to lay out a strategy and stick to it. Retirement planning needs to be a top financial priority and take precedence over short-term projects.

Unless it’s an absolute emergency, don’t touch your pension accounts.


It’s never too early – or too late – to start planning a financially secure, relaxed retirement. By following the steps above, you’ll be able to ensure that you have a solid monetary basis later in life – and can enjoy yourself to the fullest.


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