Retirement Goals By Age – How To Achieve Your Goal And Need

retirement goals by age

These people are usually aware of the need to prepare a retirement strategy before they retire. And the planning process begins at an early age.

If you retire at full retirement age, your investment options are very limited. Your choices are either to invest in an after-tax money market account such as a 401k, or an IRA. There are advantages and disadvantages to each. A detailed analysis can be provided by an experienced adviser, but a simple comparison will probably show that the best choice for most people would be the after-tax funds.

The Years After You Retire

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Another factor that should be considered when setting retirement goals is what kind of lifestyle you will live during the years after you retire. The first two decades are an “interval” period, when the bulk of your income will probably be coming from Social Security and/or a retirement pension plan. During this time, the highest return on investments is most likely to be realized. After this period, the stock market becomes more unpredictable and investment returns drop considerably. Therefore, it is advisable to set your retirement savings goals at a rate that will provide you with sufficient income to cover your basic living expenses while avoiding inflation.

Two common areas to research when determining the amount to save for retirement are your contribution rate and your investment returns. Usually, the highest saving rates occur when one is young, with a high percentage points of compound interest. Controlling your personal risk by investing only in low-risk securities like a certificate of deposit, government funds and treasury bills will ensure that you maximize your retirement potential. However, if you have already reached retirement age, you may want to increase your contributions or reduce your annual contributions.

Investment Tolerance

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Another aspect that must be considered when setting retirement savings rates is your investment tolerance. The better your tolerance for risk, the more conservative your investment decisions will be. If you want to retire at a fast pace, you should opt for higher returns with lower risk, preferably through a Roth IRA or other tax-qualified accounts. However, if you are willing to sacrifice a bit of inflation protection, you can still achieve a comfortable retirement with high savings rates.

Most retirees have found that the most important factor in their financial success was having a proper investment portfolio. Properly managed, individual retirement accounts to allow for a diversity of investments and growth opportunities. Ideally, retirees set their investment goals based on their current lifestyle and income levels.

Current Level Of Living

If you wish to retain your current level of living, you will also need to determine your long-term goals. For example, some retirees prefer to remain active in certain pursuits such as skiing, while others would rather remain involved in business activities.

Retirement plans with fixed costs such as a guaranteed withdrawal rate and adequate life insurance can help with financial goals by age. A person who wants to retire at a younger age may also decide to make changes to their investments to ensure they have a larger nest egg to live on in their later years. In this case, keeping money in a 401(k) or other traditional account may be the best way to meet their long-term financial goals.

Final Words

The best way to learn about retirement goals by age is to speak with your financial advisor. He or she will be able to determine the best investments for your situation based on your information, age, and life insurance and other needs. Choosing investments wisely is often called “the art of investing”. It requires education and patience in order to make good decisions and a significant amount of money to achieve your retirement goals.

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