Saving for Retirement
It's never too early—or too late—to start saving for your future.
The beginning of your career is a good time to start planning for retirement. Even if you’re further along, it's not too late to start or find ways to make your current plan better. The most important thing is to invest as much as you can now so you can enjoy your years after you stop working.
Step 1: How Do I Identify My Goal?
Conventional wisdom says you’ll need between 70% and 80% of your current income to live on in retirement. To get there, a good starting goal is to put away 5–10% of your salary. You may need to bump that up if you’re starting later.
Write down the amount you plan to invest and how often (monthly, quarterly, annually).
Estimate how many years you have to invest before retirement.
Use those numbers in our Future Value Calculator to figure out how much money you could have if you invest that amount now.
Consider whether you should invest more to reach your goal. Many people underestimate how much they’ll need.
Step 2: How Do I Build My Retirement Plan?
Your overall retirement plan includes the types of accounts you use, such as IRAs, 401(k)s or other workplace retirement plans. These accounts are designed to help you grow your money and save on taxes.
Consider which retirement investment accounts are right for your situation.
Use an employer’s retirement plan to your advantage. If there’s an employer match, think of it as extra money and invest enough to get the matching funds.
Consider if you could be doing more for retirement with other types of accounts, such as a Health Savings Account (HSA).
Step 3: How Do I Choose the Right Investments for Me?
One of the big retirement questions is what to invest in. Choosing investments that help balance risk and reward may help you have a better chance at retirement success.
Seek investments that give you the best potential results while minimizing risk.
Understand how diversification (a mix of different investments) can help you manage risk and volatile markets.
Choose investments that fit your timeline and how you feel about risk.
Build your own customized portfolio or consider a pre-diversified option built by investment professionals.
Explore: Choosing Retirement Accounts
Step 4: How Do I Maintain My Portfolio Over Time?
Investing for retirement isn’t a one-time strategy. Instead of putting your retirement plan on autopilot, keep good investing habits to help you get closer to your goals.
Explore: Staying on Track
Retirement Doesn’t Look the Same for Everyone
Some people are looking to retire sooner than the typical age 65+. Others may not have the luxury of a workplace retirement plan. Check out these strategies for outside-the-box retirement savers.
The Financial Independence, Retire Early trend speeds up the process, but some tactics could apply to those closer to retirement, too.
Can’t wait for full retirement? Give it a trial run with a shorter version now.
Saving On an Inconsistent Income
Gig and seasonal workers can save for retirement too. Check out these tips.
IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.
This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.
Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.
Diversification does not assure a profit nor does it protect against loss of principal.
You could lose money by investing in a mutual fund, even if through your employer's plan or an IRA. An investment in a mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.