Retirement Planning Basics: 6 Things You Need To Know

by Lauren Beichner

Marketing Specialist

Member Tips

When you start planning for retirement, you may be wondering 'where do I start?'. Initially, planning for your long-term financial future can be very overwhelming, but it's critical that you take the time to create a solid financial plan early so that when the day comes, you can retire with peace of mind knowing that you are going to be financially secure for the rest of your life. These six steps are the perfect starting point to get you on the right financial track to a relaxing and stress-free retirement: 

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6 Easy Steps To Plan For Your Retirement

1. Determine Your Retirement Income Needs

Start by looking at your past and current annual expenses. Once you have a clear understanding of how much you are currently spending annually, you can estimate your annual retirement expenses and what kind of retirement savings you'll need to have. Everyone's financial needs are different so it's very important to look at your unique financial situation and not compare how much you should be saving for retirement to what other people are saving. 

2. Calculate The Gap

Once you have evaluated your retirement income needs, take a look at your estimated future assets and income. Your retirement income may come from Social Security, a retirement plan at work, a part-time job, and/or other sources. If your estimates show that your future assets and income will not entirely cover what you need for retirement, the rest will have to come from additional personal retirement savings.

3. Figure Out How Much You’ll Need To Save

By the time you retire, you’ll need to have enough savings established to fill the game left by your other income sources. Knowing how much is enough can be challening. Start by asking yourself the following questions to help you find the answer: 

  • At what age do you plan to retire? The younger you retire, the longer your retirement will be, and the more money you’ll need to save. 
  • What is your life expectancy? The longer you live, the more money you'll need to save. 
  • What rate of growth can you expect from your savings now and during retirement? Be conservative when projecting rates of return.
  • Do you expect to dip into your principal? If so, you may deplete your savings faster than if you just live off investment earnings. Build up your savings so you have a cushion to protect you from these risks.

4. Build Your Retirement Fund: Save, Save, Save

Once you know how much money you'll really need to save, you can actually start saving! This is much easier said that done, so make sure you have a specific savings strategy in place to help you hold yourself accountable to the plan. Put your savings plan into action and start saving as soon as you can. Create a budget and stick to it to help you set aside enough money towards retirement. Remember, it's never too early to start saving for retirement, and if possible,  save more than you think you’ll need to provide an extra cushion.

5. Understand Your Investment Options

It's essential that you are aware of the types of investments that are available, and decide which ones are right for you. If you don’t know where to begin, consider working with a financial professional. He or she will walk you through the options that are available to you, and will help you select the investments that make the most sense for your goals and your unique financial situation. 

6. Use The Right Savings Tools

There is a variety of savings tools that can help you prepare and save for retirement. The biggest challenge is choosing the right one for you. If determining the best saving tool and option for you is overwhelming, get advice from a professional. Remember, don't wait to start saving. The sooner you start saving, the better! 

How Coastal Wealth Management, available through CFS*, Can Help You Plan for Your Financial Future

At Coastal, we make it our priority to help all of our members plan for a secure retirement. Wherever you are in your retirement journey, we are here to partner with you to give you financial advice based on your unique financial circumstances to help you make the best decisions with your money. Connect with a CFS* Financial Advisor to schedule your appointment and get started today to get the tools and assistance that you need to help grow your retirement savings.

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*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA / SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. Coastal Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.

CFS representatives do not provide tax or legal guidance. For such guidance please consult with a qualified professional. Information shown is for general illustration purposes and does not predict or depict the performance of any investment or strategy. Past performance does not guarantee future results.