Retirement Planning 101: Start Now, Retire Rich

Why Start Planning Now?

Every year you delay retirement planning costs you significantly. Thanks to compound interest, money invested in your 20s grows exponentially more than money invested in your 40s.

How Much Do You Need?

A common rule of thumb is the 25x Rule: multiply your desired annual retirement income by 25.

Want $50,000/year in retirement? You need $1,250,000
Want $80,000/year? You need $2,000,000

NOTE

This assumes a 4% annual withdrawal rate, which has historically sustained portfolios for 30+ years.

Choosing the Right Accounts

401(k) or 403(b)

Employer-sponsored retirement account
Pre-tax contributions reduce your taxable income
Many employers offer matching contributions (free money!)
2026 contribution limit: $23,500

Traditional IRA

Individual retirement account
Tax-deductible contributions (income limits apply)
2026 contribution limit: $7,000 ($8,000 if 50+)

Roth IRA

Contributions are after-tax, but growth is tax-free
No required minimum distributions
Ideal for those expecting higher taxes in retirement
Income limits apply

IMPORTANT

Always contribute enough to your 401(k) to get the full employer match. It’s a guaranteed 50-100% return on your money.

The Retirement Planning Checklist

Calculate your retirement number (25x annual expenses)
Maximize employer 401(k) match
Open and fund a Roth IRA
Increase 401(k) contributions annually
Diversify across stocks, bonds, and international markets
Review and rebalance annually

Common Mistakes to Avoid

Starting too late
Not taking advantage of employer matching
Being too conservative with investments when young
Withdrawing from retirement accounts early
Ignoring fees in your investment choices