7 Steps to Help You Plan for Retirement

Planning for retirement is one of the most significant financial steps you can take to ensure a secure and comfortable future. However, trying to choose between all available options while considering the future you want can be overwhelming.

From choosing the right investment accounts to managing debt and utilizing financial tools, there are many resources available to help you as you plan for retirement. Keep reading to learn about navigating the path to your golden years, worry-free.

1. Open a Retirement Savings Account

There are several different types of retirement savings accounts, and the best option likely depends on your personal situation.

401(k) Plans

A 401(k) plan is a popular employer-sponsored retirement account that allows you to contribute a portion of your salary on a pre-tax basis. Many employers offer matching contributions, which can significantly boost your retirement savings. Try to contribute enough to take full advantage of any employer match.

Individual Retirement Accounts (IRAs)

IRAs offer another way to save for retirement. There are two main types: Traditional and Roth IRAs. With a Traditional IRA, contributions are made pre-tax, and earnings grow tax-deferred until you withdraw them in retirement. With a Roth IRA, you make contributions after-tax, but qualified withdrawals are tax-free.

CD IRAs

A CD IRA combines the benefits of a certificate of deposit (CD) with the tax advantages of an IRA. They offer fixed interest rates and are a low-risk investment, making them an attractive option for conservative investors looking to preserve capital while earning a modest return.

Money Market IRAs

In a money market IRA, your contributions are invested in low-risk securities, providing a conservative approach to retirement savings. That can make it an attractive option for individuals who prioritize safety and accessibility over potentially higher returns offered by riskier investments, such as stocks.

2. Diversify Your Investments

Diversifying your investments is a way to make sure you don’t have all your eggs in one basket, so to speak, as you plan for retirement.

Stocks and Bonds

Including a mix of stocks and bonds in your retirement portfolio can help balance risk and return. Stocks offer growth potential, while bonds provide stability and income. You can adjust your allocation based on your risk tolerance and time horizon.

Mutual Funds and ETFs

Mutual funds and Exchange-Traded Funds (ETFs) allow you to invest in a diversified portfolio of stocks, bonds, or other assets. They offer a convenient way to achieve diversification without having to choose individual securities yourself.

Certificates of Deposit (CDs)

CDs are low-risk, time-deposit savings accounts that typically offer higher interest rates than regular savings accounts. These can be an excellent option for conservative investors who want a guaranteed return on their investment and are willing to lock up their funds for a specified period.

Money Market Accounts

Money market accounts provide higher interest rates than traditional savings accounts and are considered safe investments. They offer liquidity and can be a good place to park your cash while earning some interest.

3. Manage Debt Wisely

It’s important to manage your debt – otherwise, you may have to delay your retirement.

Pay Off High-Interest Debt

Before focusing solely on retirement savings, it's crucial to manage and pay off high-interest debt, such as credit card balances. Reducing debt not only improves your financial health but also frees up more money to contribute to your retirement accounts.

Consider Your Mortgage

If you have a mortgage, think about strategies for paying it off before retirement. Entering retirement without a mortgage payment can significantly reduce your monthly expenses and provide financial peace of mind. However, also weigh the benefits of keeping a low-interest mortgage versus using those funds for potentially higher-yielding investments.

4. Use Financial Calculators

Financial calculators are useful tools that can help you make informed decisions, ensuring you stay on track with your financial goals and make the most of your retirement planning efforts.

Retirement Calculators

Retirement planning calculators can help you estimate how much you need to save for retirement based on your current savings, expected retirement age, and desired lifestyle. They can also help you determine the impact of different savings rates and investment returns.

Looking for a specific calculator for retirement planning? Browse our retirement calculators: Roth IRA Calculator, Roth IRA Conversion Calculator, Traditional IRA Calculator, Social Security Calculator, and 401k Calculator.

Loan Calculators

If you're managing debt, loan calculators can help you understand the total cost of your loans, including interest, and develop a repayment strategy. They can also assist in comparing the benefits of paying off debt versus investing.

Check out our loan calculators: Existing Loan Calculator, Home Equity Line of Credit Calculator, Loan Comparison Calculator, Loan Amortization Calculator, Debt Consolidation Calculator, Line of Credit Payment Calculator, and many more.

5. Take Advantage of Catch-Up Contributions

If you're 50 or older, you can make catch-up contributions to your retirement accounts. This allows you to save more than the standard contribution limits, helping to boost your retirement savings as you approach retirement age.

For example, in addition to the annual standard contribution limit for a 401(k) in 2024 – which is $23,000 – you can contribute an additional $7,000.

6. Create a Budget for Retirement

Developing a retirement budget is essential for understanding your future financial needs. Estimate your retirement expenses, including housing, healthcare, travel, and leisure activities.

Compare these expenses to your expected income from retirement accounts, Social Security, pensions, and other sources to ensure you can maintain your desired lifestyle.

7. Stay Informed and Flexible

Your retirement plan should be dynamic and adapt to changes in your financial situation, goals, and market conditions. Regularly review your investments, savings progress, and overall retirement plan to ensure you're on track.

Then, be prepared to adjust your plan as needed. This might include increasing your savings rate, adjusting your investment allocation, or modifying your retirement budget. Staying flexible and proactive can help you navigate unexpected changes and keep your retirement goals within reach.

Academy Bank Is Here as You Plan for Retirement

Preparing for retirement involves careful planning and informed decision-making. By opening the right accounts, diversifying your investments, managing debt, utilizing financial calculators, budgeting and more, you can create a robust retirement strategy.

At Academy Bank, we offer a range of financial products and services to help you achieve your retirement goals. Whether you're interested in a CD IRA,* Money Market IRA,** or need assistance with financial planning, our team is here to support you.

Ready to take the next step? Visit your nearest Academy Bank branch or explore our website to learn more about how we can help you prepare for a secure and comfortable retirement.

What else can we help you find?
CD IRAs* and Money Market IRAs**
Premier Money Market Accounts
Certificates of Deposit (CDs)
All Financial Calculators

 

 

 

Member FDIC

*CD IRA

• Minimum balance of $500 required for opening to obtain the disclosed annual percentage yield.
• There are penalties for withdrawing funds before set term.
• 7-91 days: 60 days loss of interest
• 92-182 days: 182 days loss of interest
• 183-<60 months: 1 year loss of interest
• 60 months: 2 years loss of interest
• Fixed rate of interest is earned on the entire balance.  A penalty may be imposed for early withdrawal. CD rates are subject to change at any time and are not guaranteed until CD is opened. Fees charged to the account could reduce earnings on the account.

**Premier Money Market IRA

• A minimum deposit of $25 is required to open a premier money market account.
• Debit cards, ATM cards, or checks are not available because IRS regulations require withdrawals to be properly coded for IRS reporting requirements.
• A minimum balance fee of $10.00 will be imposed every month or statement period if the balance in the account falls below $1,000 on any day of the month or statement period.
• You will have view or inquiry only access to Digital Banking. An account statement will be provided monthly. You are limited per the IRS regulation regarding contributions based on age, income, and other factors. Early or premature withdrawals from an IRA may be subject to a 10% early withdrawal tax from the IRS.
• The interest rate and annual percentage yield may change. At our discretion, we may change the interest rate on the account daily. Interest begins to accrue no later than the business day we receive credit for the deposit of noncash items (for example, checks). Interest will be compounded monthly and will be credited to the account monthly.
• If you use mobile banking to access your account, message and data rates charged by your mobile carrier may apply.
• Fees charged to Academy Bank Premier Money Market & CD IRA accounts could reduce the earnings on the account. If the account is closed before accrued interest is credited, you will receive the accrued interest.