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Set Goals

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Set aside time to think about your retirement goals. You need to ask:
  • What do you want to do in retirement?
  • When do you want to retire?
Your answers to these questions will determine how much money you will need during retirement — and how long it will take to accumulate.

What Do You Want To Do?

What are your retirement ambitions? If you are not sure, consider the retirement situations of family members or other individuals you know. While it is not necessary to set permanent goals at this point, you should have a general sense of your objectives. Ask questions such as these:
  • Do you expect to work during retirement? If you work, will it be part-time, or will you begin a new, full-time career?
  • Will you own your home or still have mortgage payments?
  • Will you live in your hometown or move to another location?
  • Do you want to travel extensively?
  • Will you pursue hobbies? Are they costly?
Remember, whatever your goals, the financial choices you make now will affect your retirement lifestyle.

When Will You Retire?

Whether you want to retire young or work until you are 75, you should consider the following:
  • The earlier you retire, the longer your retirement savings will need to last. The average American retiring at 65 should expect to pay for at least 18 years in retirement* — and could need funds for more than 30 years in retirement.
  • Age 591/2 is generally the earliest that you can withdraw qualified retirement funds without penalty.
  • The earliest you can begin collecting Social Security benefits, if eligible, is age 62. However, the age for receiving maximum benefits is 66 and will rise to 67 in 2022.
Remember, the earlier you plan to retire, the more aggressively you must save now.

* According to the U.S. Department of Labor.

How Much Will You Need?

A common rule of thumb is that you will need from 70 percent to 90 percent of your current income to maintain your lifestyle during retirement. The amount varies based on your expenses and desired lifestyle.

For Expert Advice

A retirement planning professional can help you set retirement goals and develop an appropriate savings strategy to reach them.
  • Ask individuals you respect for names of financial planning professionals they have used.
  • Ask about the planner’s background and work experience.
  • Ask as many questions as you need to understand and feel in control of your financial future.
  • Look for a CERTIFIED FINANCIAL PLANNER™ (CFP)® professional. These planners must pass rigorous tests, meet high standards of professionalism and abide by a strict code of ethics.
CERTIFIED FINANCIAL PLANNER™ (CFP)® is a certification mark owned by the Certified Financial Planner Board of Standards, Inc. This mark is awarded to individuals who successfully complete the CFP Board’s initial and ongoing certification requirements.

For Information

The U.S. Department of Labor publication, Savings Fitness: A Guide to Your Money and Your Financial Future, offers more information. View it online at www.dol.gov/ebsa/pdf/savingsfitness.pdf.
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Updated Thursday, August 16, 2007
© The USAA Educational Foundation, 2000 - All rights reserved.



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