Making Effective Plans for Retirement
Enjoying your golden years in spite of debt challenges.
If you’re worried you’re behind on your retirement plan, you’re certainly not alone. Recent statistics show retirement planning is a global problem and only about 52 percent of Americans are known as “habitual savers” who will be ready once they reach that golden age of retirement. So it’s not surprising that we find other reports that show 30 percent of workers are delaying retirement to earn more income, or that retirement planning is the hottest topic for Gen X angst because they’re entirely uncertain how to move forward.
No matter which generation you’re in or where you are in your retirement plan, the resources below are designed to help you plan ahead and start saving in spite of any challenges you may be currently facing with debt. We also are helping seniors close to, or already in, retirement to avoid challenges with debt during their golden years. If debt problems are hindering your retirement OR your retirement plans, we’re here to help. Call Consolidated Credit at or complete an online application to consult with a certified credit counselor at no charge.
How much should you save for retirement?
This is the first and often most fear-inducing question people have when they establish a retirement plan. The common wisdom is that during retirement, you’re going to need about 75 percent of your income each year that you’re retired.
So that tells you what you need once you reach retirement, but what about how much you should have along the way? If you’re already saving, how do you know if you’re saving enough?
A new rule of thumb makes this easier to understand by establishing “mile markers” at certain ages. By the middle of each decade, you need your yearly income multiplied by a certain amount.
- By age 35, you should have 1 times your salary
- By age 45, you should have 3 times your salary
- By age 55, you should have 5 times your salary
- By after 65, you should have 8 times your salary
If you don’t meet certain mile markers, you’re effectively behind and need to take action to catch up. The longer you delay, the more work you’re going to have to do to get your retirement plan up to speed.
Of course, the amount you’ll need during retirement is also going to vary based on what you want to do. If you have big plans to travel the world, you’ll need assets to support that lifestyle. On the other hand, if you’re going to stay in the home you’ve owed your entire adult life and can’t stand the thought of at least working part-time, then you’ll need less money to support your simple lifestyle.
Not sure where to start with your retirement plan? We break down how you can set up an effective retirement strategy and what you can do to get ahead so you have more money available to set aside. Get your retirement plan in place so you can rest easier knowing you’ll be ready when it’s time to stop working.
If you’re eligible for retirement benefits through your job, it’s in your best interest to take advantage – especially if your employer is offering “free money” in the form of a 401(k) match program. We explain how matching works and how you can ensure you get the most out of the retirement plan offered by your company.
Whether you have a retirement account like a 401(k) or you don’t, it’s always a good idea to supplement your retirement plans with a private retirement investment account like a traditional or Roth IRA. Learn the differences between the programs, and how the new myRA option may help savers who are just starting out.
The number one enemy of any retirement plan is debt. Too much debt eats away at your income and leaves nothing for retirement savings. Unless you’re facing severe financial distress, you have to strike a balance in your budget between money used for debt reduction and what you set aside for your golden years. Here’s how.
A good retirement plan will help you get to your golden years on time, but there are steps you can take just prior to and during retirement that will help you avoid problems with debt that can cause big problems on a limited fixed income. Here’s what you need to do to stay out of debt during your golden years.