Retirement Planning 101: Start Building Your Future Today

Planning for retirement might seem distant, but the earlier you start, the easier it becomes. Here's everything you need to know to get started.

Why Start Now?

Thanks to compound interest, money invested early has more time to grow. Someone who starts at 25 could have significantly more at 65 than someone who starts at 35, even if they invest the same monthly amount.

Retirement Account Types

401(k)

• Employer-sponsored
• Often includes matching contributions
• Contribution limit: $23,000/year (2024)
• Traditional (pre-tax) or Roth (after-tax) options

IRA (Individual Retirement Account)

• Personal accounts
• Contribution limit: $7,000/year (2024)
• Traditional or Roth options
• More investment choices than most 401(k)s

Roth vs. Traditional

Traditional: Tax deduction now, pay taxes in retirement Roth: No tax deduction now, tax-free withdrawals in retirement

Choose Roth if you expect higher taxes in retirement; Traditional if you expect lower.

How Much to Save

General guidelines:

• Minimum: Enough to get full employer match
• Target: 15% of income (including employer match)
• Catch up: More if you started late

Investment Strategy

• Young (20s-30s): Mostly stocks (80-90%)
• Middle (40s-50s): Balanced mix (60-70% stocks)
• Near Retirement (60s): More conservative (40-50% stocks)

Target date funds automatically adjust this for you.