Author
BetterProduct Editorial Team
Retirement planning is about ensuring you have enough money to live comfortably when you stop working. The earlier you start, the easier it is ā thanks to compound interest, money invested in your 20s is worth far more than money invested in your 40s. But it's never too late to start improving your retirement outlook.
BetterProduct Editorial Team
Checked against standard finance formulas and representative planning scenarios.
March 2026
Budgeting, comparisons, and what-if planning.
7 language editions aligned from the same source formulas.
The most common guideline is the 25x rule: save 25 times your expected annual expenses. This supports a 4% annual withdrawal rate, which research shows has historically lasted 30+ years. For $60,000/year in expenses, you'd need $1.5 million. Adjust for Social Security income, which reduces how much you need to save.
A 401(k) is employer-sponsored with a 2024 contribution limit of $23,000 ($30,500 if 50+). Traditional accounts give you a tax deduction now; Roth accounts give you tax-free withdrawals in retirement. IRAs have a $7,000 limit ($8,000 if 50+). Always contribute enough to your 401(k) to get the full employer match first.
In your 20sā30s, invest aggressively (80ā90% stocks) since you have decades to recover from downturns. In your 40sā50s, gradually shift toward a 60/40 or 70/30 stock/bond mix. In your 60s, focus on capital preservation with 40ā60% stocks. Target-date funds automatically adjust this allocation for you.
You can claim Social Security as early as 62 (reduced benefit) or as late as 70 (maximum benefit). Delaying from 62 to 70 increases your monthly benefit by about 76%. If you're healthy and have other income sources, delaying is usually the better financial decision. Married couples should coordinate claiming strategies.
Healthcare is often the biggest unexpected expense in retirement. Medicare starts at 65, but you may need to bridge the gap if you retire earlier. Consider a Health Savings Account (HSA) ā contributions are tax-deductible, growth is tax-free, and withdrawals for medical expenses are tax-free. It's the only triple-tax-advantaged account available.