Retirement may represent your most important long-term financial goal, and the best savings strategies are personalized to your situation. Yet it’s important to avoid common pitfalls that could prove to be a setback as you work toward financial security in retirement.
This quiz will help you understand how to steer clear of potential mistakes in your retirement planning.
Get more information on saving, preparing for and living in retirement in our retirement planning toolkit.
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The process of saving and investing your money for retirement works best if you take advantage of the opportunities available to you. Start early and set aside as much as you can, ideally at least 10-12 percent of your gross income, toward retirement.
Workplace savings plans such as 401(k)s and 403(b)s allow you to put money to work before your income is taxed, and earnings in these accounts grow on a tax-deferred basis. IRAs offer several option depending on how you qualify based on your income. Contributions can be pre-tax or after-tax, earnings are tax-deferred, and Roth IRAs offer the opportunity for tax-free distributions in retirement.
Once you reach age 50, you can take advantage of catch-up contributions to your workplace retirement plan or IRAs. As you close in on your retirement start date, you’ll want to consider making adjustments to your portfolio to protect against unexpected but potentially dramatic downturns in the market.
Social Security can provide a regular stream of cash for you in retirement, but if you’re like most people, it can’t fulfill all your income needs. More than ever, you need to be responsible for your financial well-being. Save as much as you can, as soon as you can, for retirement.