Even the longest and most difficult ventures have a starting point. Retirement readiness generally requires an early start, followed by continued, consistent saving.
Today’s workers have a median tenure of just 5 years, and most will have 10, 11, 12 or more employers. Other studies show that workers currently aged 50, have had an average of 11.9 different employers, and that most workers ages 58 to 62 have changed employers since their fiftieth birthday.
Because all employers do not sponsor plans, and because many work in a “gig” or on-demand role, preparing for retirement requires workers (that’s you) to prioritize saving for retirement.
To improve your odds of success, follow these tips:
Save early, save often
You don’t need to know your destination to start. If you are not eligible for an employer-sponsored plan, save in an IRA. IRAs have been available since 1982 and are a more than adequate, tax-favored, retirement savings vehicle for almost all workers.
Investment expertise helps, but is not required
Consider using a target date fund, a diversified fund whose asset allocation becomes more conservative as you approach retirement.
Don’t go into it alone
Get help from Uncle Sam in the form of tax-preferred savings on retirement accounts and save enough to get the maximum employer match. If your employer offers a 401(k) and a Health-Savings-Account-qualifying health plan, make sure you maximize the tax preferences and employer support from both plans.
After-tax Roth accounts may be best for those just getting started — your marginal tax bracket may never be lower than it is today.
For married couples, preparation may be a lot easier if you both save in every available employer-sponsored plan and IRA.
Approximately ten-thousand Baby Boomers will reach age 65 today, and this month, tens of thousands will successfully retire. Almost all workers who have retirement as a financial priority.