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Be Wise With Money

Retirement Planning: How to Stay in the Game

Thinking ahead to retirement can help you make smart financial moves. Here are some potentially game-changing tips.


You've saved for retirement for years, squirreling away money and investing it wisely.

But how do you know you’ll actually have enough? Here are four strategies that can help you prepare for life after work.

4 Retirement planning strategies

1. Count your money.

About five years before you plan to retire, forecast your income needs in retirement. Most retirees require about 65% to 75% of their annual preretirement income to live comfortably.
You'll also need to include whether you’ll have a mortgage. And consider: What would you like to do during your golden years. Travel? Pursue a new (or long-neglected) hobby?
Next, look at what you expect to get from Social Security, a pension or your retirement accounts. Subtract your anticipated spending needs from your income. If the result is a negative number, you'll have to make up the shortfall from your savings.why work longer infographic
If you don't have enough savings to cover that shortfall, you may need to:
  • Reduce your retirement lifestyle expectations.
  • Save and invest more.
  • Work longer if you can. Doing so will give you more years to contribute to your retirement accounts.   

2. Make it last.

Think you need another source of retirement income? Consider an annuity contract.
The idea is simple: Pay a certain amount up front, and you'll get set payments over the years that you can add to other retirement income sources.
There are several types of annuities, each with different features, benefits, risks and costs.

3. Take it out in the right order.

The order in which you take money out of your retirement accounts can make a big difference in how much you’ll pay in income tax during retirement.
Generally, retirement savings and investment accounts fall into three groups:
  • Taxable: These include mutual funds, savings accounts, individual stocks and bonds, etc.
  • Tax-deferred: Investments and income from retirement accounts such as traditional individual retirement accounts (IRAs), traditional 401(k)s and certain types of annuities aren't taxed until you take money out.
  • Tax-free: Funds you take out from Roth IRAs, Roth 401(k)s and whole life insurance are not taxed as long as you meet certain qualifications. The best strategy for lowering your tax rate: Tap your tax-free accounts more than your other retirement sources. 

4. Be strategic about Social Security.

by the numbersYou're first eligible at age 62. But if you claim before your full retirement age (between 66 and 67 for most people), you'll reduce your benefit. You'll also lock in the lower amount for the rest of your life.
But if you wait until age 70, you can boost your monthly check by about 8% a year. Keep in mind, too, that a quarter of today's 65-year-olds will live past age 90.
So if you have other sources of money or if you're still able to work part-time, consider waiting.
In the meantime, keep saving as much as you can – and investing what you save with care.

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