Retirement Planning Guidelines for Every Age

You’re never too young or too old to save for retirement; here are some guidelines by age group:

Under 25:  If you graduated from college with debt, you are certainly not alone – the average debt burden is currently $26,500 for 65 percent of college graduates.  Once you are able to get a good job, you should enroll in your employer’s 401(k) or other retirement savings plan and contribute enough to qualify for your employer’s match – usually six percent of salary.

25-40:  You need to be putting away about 10 percent of your income towards retirement, and that should come before you save for a house or the kids’ college fund.

40-54:  You are in your prime earning years and should be able to contribute 15 percent or more to your retirement savings.

55-70:  Retirement is within sight now, so you may need to start adjusting your asset allocation to risk.  The closer you are to retirement, the less risk you should be taking.  You should also look into long-term care insurance to protect retirement assets.

Over 70:  Your withdrawal rate should generally be no more than four percent of your total portfolio value, not including an emergency reserve fund, to supplement your income from Social Security or pension.  Once you are over 70 ½, you must take the Required Minimum Distribution (RMD) from your traditional IRA and 401(k) every year, which is calculated based on your life expectancy according to IRS Publication 590.

To your family’s health, wealth and happiness!

David Feakes

P.S.  Want to get started on the most important planning you’ll ever do for your family?  Give our office a call at (978) 263-6900 to get started.  You’ll be so glad you did.

David Feakes is the owner of The Parents Estate Planning Law Firm, PC – a law firm for families in the Acton, Massachusetts area.   David helps parents protect the people they love the most.  If you would like to receive David’s exclusive, free report, “Six Major Mistakes To Avoid When Choosing An Estate Planning Attorney,”  you can get it right here.

 

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At The Parents Estate Planning Law Firm, we answer your questions at your convenience; we stay in frequent communication; and we meet to discuss changes in life circumstances and in the law to ensure that your assets are protected.

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