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Timing Your Retirement: When to Start Planning for Financial Independence

By Marjorie L. Rand, CPA, CFP®, RICP®

If you’re working, you should start planning for retirement now.

That’s not a flip response to “When should I start planning for retirement?” Starting with your first job—or as soon as you can—gives you a great shot at retiring when you want and with more money. The longer you save, the longer you can take advantage of compounding interest, giving you more money for retirement.

While retirement means different things to different people, early planning can help you experience the retirement lifestyle you envision. Planning early allows for time to make adjustments as needed. For instance, you can invest money aggressively in stocks when you’re younger and begin to move your money into more conservative securities, such as bonds, as you get closer to retirement.

You should not wait until right before retirement to begin planning. Your goal should be to retire with enough money to do what you want. There are many steps you can take to help you experience the kind of retirement you desire, and the Rand Financial Planning team can help you start planning it.

Where to Start

To begin planning for retirement, start with deciding what a great retirement looks like to you. You don’t have to worry about the money to pay for retirement yet, but write down what you want to do, where you want to live, and how you want to live. Be as specific as you can.

Knowing what your retirement lifestyle will likely be is key to building a financial plan to enjoy your retirement long into the future.

Follow These Steps in Planning for Retirement

Now that you have your retirement lifestyle written out, build the road map that can get you to and through your retirement.

Here are four steps to move toward your retirement goals:

1. Take Stock of Where You Are

Whether you want to stop working or continue working in retirement, you need to know where you’ll get the money to pay for your expenses. Take inventory of your current income and where your money will come from after retirement, how much money you have in checking and saving accounts, and the value of your retirement and investment accounts.

As you move closer to retirement, take advantage of catch-up contributions to your 401(k). In 2024, if you are 50 years or older, you can contribute an additional $7,500 on top of your $23,000 maximum contribution. For an individual retirement account (IRA), your maximum contribution in 2024 is $7,000, with a $1,000 catch-up contribution for people 50 and older. 

2. Set a Retirement Budget 

Many experts say you need to replace 70 to 90 percent of your income for your retirement. Social Security—which you should take as late as possible—will replace only about 40 percent of your income, so you will need other income sources. Write out how much money you will have coming in and how much you will spend during retirement, including your debt. 

3. Check on Your Health

Depending on when you retire, you may live as long as 30 or 40 years in retirement. Keeping up your health can allow you to experience the retirement you dream about. Just like starting early with savings, now is the time to check on your health.

This also is a good time to think about future medical needs, including medical care coverage, long-term care insurance, and long-term care expenses.

4. Stay on Course

Once you’ve created your retirement plan, stick to it. This may be difficult, but it’s necessary. To realize the retirement experience you dream about, follow your plan and review it at least annually.

If you take these four steps and start early, you have a better chance of attaining your desired retirement lifestyle. Even if you don’t start early or you’re starting later than you wanted, it’s truly never too late to start planning for retirement. 

Start Planning Today

Now that you know when and how to start planning for retirement, consider working with Rand Financial Planning to help you pursue the retirement you want with confidence. While many advisors are general practitioners, I use my experience and skills to specifically help you prepare for a safe and stable retirement. As a fiduciary, I put my clients’ best interests first, and take my core values of honesty and integrity very seriously.

Schedule a 20-minute introductory call or reach out to me at 908-895-2406 or marge@randfinancialplanning.com to see if I’m the right fit to help you on your financial journey.

About Marge

Marjorie Rand is founder and financial advisor at Rand Financial Planning, a comprehensive, fee-only, fiduciary financial planning firm based in Flemington, New Jersey. Marge specializes in helping her clients plan for a secure retirement and navigate life’s many transitions through customized, tax-efficient retirement planning. She is passionate about empowering her clients to make the best financial decisions for their life and being by their side no matter what life throws at them. Marjorie spent many years as a CPA, specializing in estates, before founding Rand Financial Planning so she could be a go-to source for all her clients’ financial needs and help them avoid costly mistakes. She has a bachelor’s degree in accounting from Rutgers University and a Master of Science in Taxation from Fairleigh Dickinson University, along with the Retirement Income Certified Professional® (RICP®) and CERTIFIED FINANCIAL PLANNER™ certifications. When she’s not working, Marge enjoys boating, horseback riding, traveling, and hiking with her husband and her dog, Rangeley. To learn more about Marjorie, connect with her on LinkedIn.
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