Planning for retirement can feel overwhelming, but expert guidance makes the process manageable. This article compiles practical strategies from financial professionals who specialize in retirement planning. Readers will discover twelve actionable approaches to building a secure financial future, from automated savings systems to income projection techniques.
- Run A Comprehensive Projection With Safeguards
- Garnish Your Pay Then Compute Solvency Number
- Leverage A Cash Balance Plan With Advisors
- Target Bold Savings At Twenty Percent Yearly
- Divert Every Deposit And Tailor A Cushion
- Schedule Auto-Transfers And Consult Peer Benchmarks
- Skim Project Revenue And Quantify Real Needs
- Set Milestones And Hire A Fee-Only Planner
- Route Funds To Pensions And Adjust Annually
- Allocate Deal Proceeds And Add A Buffer
- Reverse-Engineer Income Goals Into Monthly Targets
- Build Rental Streams To Cover Household Costs
Run A Comprehensive Projection With Safeguards
If you are unsure if you are saving enough for retirement, or want to check in to see how your retirement could look, consider having a retirement projection built. There are a lot of calculators out there, or you could consult a trusted financial professional. But ensure whatever calculator or projection you employ takes into consideration: your current income, rate of savings, your assets, your debt, your expenses, taxes, Social Security, and any other form of income (like pensions or rental income).
You will want to see, using a conservative rate of return estimate and if you stay on the current path, how much money will be coming in the door when you retire and how much money will be going out the door. If more money is coming in than going out, you could be on the right track. If more money is going out than coming in, you most likely need to consider increasing your savings rate. But if you are concerned or very uncertain, or know that retirement is not a “DIY” project, consult a trusted financial professional who can help you.
Eric Mangold, Founder, Wealth Manager, Argosy Wealth Management, LLC
Garnish Your Pay Then Compute Solvency Number
In my practice, I often see clients arrive at retirement with a “hope and a prayer,” which, legally speaking, is not a recognized asset class. My strategy for ensuring I save enough is what I call “Mandatory Self-Garnishment.”
In the world of debt collection, a wage garnishment is a court order that forcibly takes money from your paycheck before you ever see it. It is painful, effective, and non-negotiable. I applied this same legal mechanism to myself voluntarily. I set up automatic transfers to my retirement accounts that occur the very second my direct deposit hits.
I do not “try” to save what is left over at the end of the month; I save first and force myself to live on the remainder. If the transfer doesn’t sting a little bit, you are not saving enough. Treat your “Future Self” like your most aggressive creditor—because if you don’t pay him now, he will show up later with a default judgment in the form of poverty.
Regarding how I determined the target, I rejected the standard “replace 70% of your income” rule of thumb. That is hearsay evidence. Instead, I conducted a forensic audit of my actual expenses. I calculated exactly what it costs to keep the lights on, the taxes paid, and the refrigerator stocked—assuming my mortgage is paid off.
Then, I added a significant buffer for healthcare, because the human body depreciates faster than a used car. I multiplied that annual “survival number” by 25 (based on the 4% withdrawal rule). I did not plan for a “dream” retirement of yachts and vineyards; I planned for a solvency retirement. If the market does well and I get the yacht, that is just punitive damages in my favor. But the goal is to never be a defendant in a bankruptcy court.
Lyle Solomon, Principal Attorney, Oak View Law Group
Leverage A Cash Balance Plan With Advisors
As someone who raised children before working full time and increasing my income, I was behind on retirement savings at the beginning of my 50s. IRAs and even SEP-IRAs did not let me save enough to catch up, but a cash balance plan did. I determined the savings target by working with an actuary and my CPA to maximize current tax savings and maximize eventual plan balance. Those targets are documented and reviewed annually because cash balance plans have characteristics of defined benefit plans, and they must meet certain funding criteria each year for the plan to be in compliance. The plan reduces current taxable income (by up to $342,000/year when you are in your 60s), and enforces a disciplined savings framework.
Julia Rueschemeyer, Attorney, Attorney Julia Rueschemeyer Divorce Mediation
Target Bold Savings At Twenty Percent Yearly
I handle my retirement savings like I handle my work income goals. I set a number that feels a little ambitious, then I put it on autopilot. After reading what Danish financial advisors suggest, I started putting 20% of my yearly income into pension funds and some index ETFs. I revisit that number each year based on how my income is doing. Honestly, this system takes the worry out of my financial future. It’s not something I just hope for anymore, it’s a plan.
Karsten Madsen, CEO, Morningscore
Divert Every Deposit And Tailor A Cushion
My one simple rule is that whenever money comes in, a chunk automatically moves to my retirement fund. It keeps me from touching it. When I started Tutorbase, my income was all over the place, so I got a financial advisor to help me make a plan. We figured it out based on what I’d need later and those leaner months. Sticking to those numbers saved me when things got tight, so I always pass that tip along to other founders.
Sandro Kratz, Founder, Tutorbase
Schedule Auto-Transfers And Consult Peer Benchmarks
Here’s what actually worked for me. I set up an automatic transfer to my retirement account every month. Running restaurants, you never know what expense is coming, so I needed something that didn’t depend on my willpower. I figured out how much to save by asking a few other local business owners and plugging numbers into an online calculator. It wasn’t a perfect science, but having that target kept me from spending it.
Allen Kou, Owner and Operator, Zinfandel Grille
Skim Project Revenue And Quantify Real Needs
I take a fixed percentage of revenue from every project, basically taxing myself. I figured out my goal number by researching actual retirement costs in Singapore, factoring in healthcare and travel. Seeing the real amount made it concrete. I also check my progress every quarter, which keeps me honest and on track. It’s a simple system that works.
Alvin Poh, Chairman, Singapore Domain Names
Set Milestones And Hire A Fee-Only Planner
I maintain my retirement savings stability through the use of personal life milestones which replace my need to worry about financial numbers. The early 2000s market volatility which my parents experienced made me understand the need for developing a better investment strategy. I scheduled a meeting with a financial planner who operates on a fee-only basis to create a plan starting from the end. What would my daily existence become if I decided to leave my position at Stingray Villa? I spend fewer nights standing but I get to start my days near the ocean while keeping enough safety margin to deal with unexpected events.
The image I saw turned into my retirement fund objective. The number shows the actual monthly expenses which combine lifestyle costs with inflation and healthcare expenses. I automate contributions so I don’t have to think about them, the same way we used to set up automatic bill pay in the AOL days and forget it. The amount I save varies between different years. The main requirement for success involves maintaining steady behavior. Progress beats perfection, every time.
Silvia Lupone, Owner, Stingray Villa
Route Funds To Pensions And Adjust Annually
I automatically put money into my pension and ISA each month. Every year I adjust the amount with my accountant, depending on how business went. I figured out what I’ll need to live on later and added a bit extra for inflation. It’s worth checking those numbers as things change. Setting it up this way means I barely have to think about it anymore.
Ben Sztejka, Managing Director, Your Ecommerce Accountant
Allocate Deal Proceeds And Add A Buffer
Here’s my system. Every time I close a deal, I take a set percentage of the commission and put it into more property and some index funds.
For my retirement number, I used an online calculator then added a 20% buffer because markets are unpredictable. If you’re starting out, just begin with a small amount. You can increase it as you do more deals, which helps you see progress and stick with it.
David Bokman, CEO, Philly Home Investor
Reverse-Engineer Income Goals Into Monthly Targets
Running Hire Fitness taught me a thing or two about planning. I treat my future retirement income like a business goal. I figured out the yearly income I want later, worked backward to a monthly number, and left some extra space. It turns a scary big number into a small monthly payment. I check my numbers at least once a year, just to make sure things are still moving in the right direction.
Paul Healey, Managing Director, Hire Fitness
Build Rental Streams To Cover Household Costs
I’ve been in real estate for years, so my retirement plan is about owning enough rental properties to cover my monthly expenses. I’m not after a huge lump sum, just a steady stream of cash. It took some time to figure out which properties to buy, but it’s paid off. If you’re starting out, I’d mix traditional savings with assets that pay you regularly and check on everything twice a year.
Ryan Nelson, Founder, RentalRealEstate