Saving for retirement can feel like guesswork when you're decades away from needing the money, and that's exactly why Time turned to our Managing Principal, Daren Blonski, for practical guidance in its latest piece on realistic retirement savings. The feature, "How to Realistically Save for Retirement", makes the case for automating contributions and saving a steady percentage of income rather than fixating on a specific dollar target decades out. Daren weighs in specifically on why an IRA belongs in the mix alongside a workplace 401(k). "This tax flexibility can be advantageous in retirement planning, particularly if you anticipate changes in your tax bracket over time," he says. "Additionally, IRAs offer a broader range of investment options compared to many employer-sponsored 401(k) plans, empowering you to customize your investment strategy to align with your specific financial goals and risk tolerance."
Key Takeaways
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Saving a consistent percentage of income, generally 10% to 15%, matters more than trying to calculate an exact retirement number decades in advance.
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Contributing enough to a 401(k) to capture the full employer match is one of the simplest ways to boost retirement savings.
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IRAs offer broader investment choices than many workplace 401(k) plans, along with tax flexibility that can help if your tax bracket changes down the road.
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The IRS treats 59.5 as the standard retirement age, and early withdrawals typically trigger taxes and penalties.
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Rolling over an old 401(k) into an IRA when changing jobs can simplify accounts and potentially reduce fees.
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For 2024, the 401(k) contribution limit is $23,000 and the IRA limit is $7,000 for savers age 50 and younger.
Building the right mix of workplace and individual retirement accounts is exactly the kind of planning we help clients work through every day. Learn more about our Financial Planning services.
Read the full piece, "How to Realistically Save for Retirement," on Time