Half of all Americans haven’t even calculated their retirement needs. The numbers paint a worrying picture – the median retirement savings for households between 55 and 64 years was just $14,500 as of 2013.
Let’s break down retirement planning basics without complex financial terms. Your retirement consultant in Fresno CA will explore how this piece will help you build a secure financial future, whether you’re starting your career or getting ready to retire. Retirement shouldn’t cause anxiety – you can prepare for it confidently with proper knowledge and the right tools.
Understanding the Basics of Retirement Planning
Retirement planning in 2026 looks nothing like what our parents experienced. The security of guaranteed pensions and lifelong employer healthcare has disappeared. Workers now need to build their own financial security through savings and investments.
Recent statistics reveal a troubling reality. Only 40% of employees have saved more than $100,000 for retirement. Workers between 55-64 years old have saved just $185,000 on average. The situation looks even worse when you consider that 40% of Americans have barely $5,000 set aside for retirement.
These numbers make retirement planning one of the most important skills to master now. Retirees typically need 80% of their pre-retirement income to keep their lifestyle. Social Security covers only 40% of an average worker’s pre-retirement income. This leaves much of the gap to be filled through personal savings.
Building Your Financial Foundation
A strong retirement foundation depends on your grasp of savings options and future costs. You should make maximizing retirement accounts your top priority. Your employer’s 401(k) matching contributions are basically free money, so contribute enough to get the full match. The contribution limit for 401(k) plans will reach $23,500 in 2025, while those over 50 can contribute up to $31,000.
An Individual Retirement Account (IRA) can boost your savings further. Traditional IRAs let you deduct contributions from taxes, and Roth IRAs allow tax-free withdrawals when you retire. You can contribute up to $7,000 to IRAs in 2025, or $8,000 if you’re over 50.
Making Your Money Last in Retirement
After retirement, your priorities move from building wealth to making it last. A sustainable withdrawal rate is vital to ensure your savings survive long-term. Financial experts suggest taking 4% to 5% from your portfolio in the first year and adjusting that amount yearly for inflation. This strategy gives you a 90% chance that your money will be there throughout retirement.
Your retirement’s duration substantially affects how much you can safely withdraw. A 25-year retirement plan allows for 5% withdrawal rates that have worked 90% of the time, while a 35-year retirement needs 4.4%.
Your investment mix plays a vital role in success. Proper diversification in asset classes of all types helps manage risk and can boost returns. Your investments should spread across stocks with different market capitalizations, sectors, and geographic regions.
Conclusion
We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to see how we can help you Retire ”Your Way!”
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Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser. This commentary reflects the personal opinions, viewpoints and analyses of the author, Dale Soutas. It does not necessarily reflect the views of Foundations Investment Advisors, LLC (“Foundations”) and is provided for educational purposes only and the contents are solely maintained by and the responsibility of the applicable 3rd party . The 3rd party content is subject to change at any time without notice, and does not represent an express or implied opinion or endorsement of any specific investment opportunity, investment strategy or planning strategy. Foundations in no way deems reliable any statistical data or information obtained from or prepared by third party sources in this commentary, nor does Foundations guarantee its accuracy or completeness. No legal or tax advice is provided or intended.
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