Expert strategies from TFA certified financial advisors to secure your financial future
Retirement planning is one of the most critical aspects of financial wellness. With the right strategies and guidance from TFA certified advisors, you can build a robust retirement plan that ensures financial security in your golden years.
The earlier you start retirement planning, the more time your investments have to grow through compound interest. Even small contributions can make a significant difference over time.
Your 401(k) is often the cornerstone of retirement planning. Here's how to maximize its potential:
Contribute at least enough to get the full employer match - this is essentially free money. Most employers match 3-6% of your salary.
Start with your employer match, then increase contributions by 1% each year until you reach the maximum contribution limit ($23,000 in 2024).
If your employer offers a Roth 401(k), consider contributing to it for tax-free withdrawals in retirement, especially if you expect to be in a higher tax bracket later.
| Age | Recommended Contribution | Annual Target |
|---|---|---|
| 25-30 | 10-15% of salary | $5,000-$10,000 |
| 30-40 | 15-20% of salary | $10,000-$20,000 |
| 40-50 | 20-25% of salary | $15,000-$25,000 |
| 50+ | Maximum allowed | $30,500+ (with catch-up) |
Individual Retirement Accounts (IRAs) provide additional tax-advantaged savings opportunities:
Traditional IRA: Tax-deductible contributions, taxable withdrawals. Best for those who expect lower tax rates in retirement.
Roth IRA: After-tax contributions, tax-free withdrawals. Best for those who expect higher tax rates in retirement.
High earners can use the backdoor Roth IRA strategy by making non-deductible contributions to a traditional IRA and then converting to a Roth IRA.
Some 401(k) plans allow after-tax contributions that can be rolled into a Roth IRA, potentially allowing contributions up to $69,000 annually.
Strategic tax planning can significantly increase your retirement savings:
Systematically realize losses to offset gains and reduce your tax burden, especially in taxable accounts.
Place tax-inefficient investments (like bonds) in tax-advantaged accounts and tax-efficient investments (like index funds) in taxable accounts.
Convert traditional IRA funds to Roth IRAs during low-income years to minimize taxes and create tax-free income streams.
The Financial Independence, Retire Early (FIRE) movement focuses on aggressive saving and investing:
Save 25 times your annual expenses and withdraw 4% annually for a 30-year retirement. For FIRE, consider a 3-3.5% withdrawal rate for longer retirement periods.
Consider retiring in areas with lower cost of living to stretch your retirement savings further.
Develop multiple income streams and side businesses to accelerate your path to financial independence.
Avoid these common pitfalls that can derail your retirement plans:
Waiting until your 40s or 50s to start saving seriously can require much larger contributions to catch up.
Healthcare expenses in retirement can be significant. Plan for Medicare premiums, supplemental insurance, and out-of-pocket costs.
Factor in inflation when calculating your retirement needs. $1,000,000 today will have much less purchasing power in 30 years.
Don't put all your eggs in one basket. Diversify across stocks, bonds, real estate, and other asset classes.
Follow this step-by-step guide to start your retirement planning journey:
Connect with TFA certified advisors who specialize in retirement planning strategies.
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