by D. Victor

Created on: March 05, 2009   Last Updated: March 06, 2009

The concept of a 'road to retirement' is a somewhat archaic way of phrasing the retirement conundrum. The truth is that the road to retirement actually continues as the 'road through retirement'. That retirement planning is for all (or most) ages does not automatically suggest that it should be undertaken in a standard way. Age, lifestyle, retirement dreams, preparedness, current and future circumstances all play a role in determining how you plan. However, your age influences your retirement planning activities significantly.

20s

The good news for those in their 20s is that they have a number of options available. They can plan for early retirement and have their retirement savings accumulating for a longer period. If you are in this group, planning can be simple. You wouldn't even need to use a complex retirement calculation.

Use the rule-of-thumb of saving 10% of your after-tax income towards retirement. For more serious young adults, using a retirement calculator would be a better option. However, making the small sacrifice is the ultimate concern here.

Those in their 20s should have more than 70% of their retirement fund in growth options as well because of their investment horizon. Participating in employer-sponsored retirement plans, especially those that match contributions, is particularly prudent.

30s

Those in their thirties have a bit of time on their side still. However, some in this age group may wish to retire at 50. In this age group, you may have a few retirement plans that work for you already. What you must first do is assess your current situation. In your 30s, you should be more methodical.

Those in their 30s could safely have a bit more than 60% of their retirement savings in growth options. The rest of the portfolio could be divided among income options like fixed annuities and high-yield savings accounts. It is important for those in their 30s to set their retirement goals realistically and construct a retirement plan in spite of debt and other financial hindrances.

40s

In your 40s, retirement is pretty close. You should have been using a retirement calculator annually to monitor your progress. If not, you have to start doing what folks in their 30s should do. Necessarily, you'd be the slow-coach that risks being overtaken by the donkey-cart.

In your 40s, the emphasis would de-shift markedly from growth to income options. If you start planning in your 40s, you may have to take more risk. However, in your 40s, it's important to take stock of your

• 1
• 2
• Next Page >>