Tips to retirement plans for all ages

Retirement. It’s the 10-letter word that sits in the back of the minds of millions of Americans each year.

The key to it is simple, according to bankers: save, save and then save some more. And preferably, save at an early age.

Then when you’re older, guess what? Keep saving.

“You can never be too ready and you can never save enough,” CitiBank’s retirement website reads.

Those with the biggest advantages, according to bankers, are those who start early, primarily new college graduates in the workforce.

That’s because the 20-somethings have the luxury of maximizing the years of interest they accumulate on savings.

“The very fact that you’re young gives you a huge edge if you want to be rich in retirement,” Bankrate.com writer Leslie Haggin Geary explains. “That’s because when you’re in your 20s, you can invest relatively little for a short period and wind up with far more money than someone older who saves much more over a longer period.”

For example, Geary said that a 25-year-old who saves $2,000 per year for 40 years with 8 percent annual interest will have $560,000 in retirement. A 35-year-old would just have $245,000 with equal interest rates.

“Seems like a no-brainer, right? Save a little now and reap big rewards later,” she said.

Just stashing a little bit of money in the bank is one thing, but financial experts explain that those beginning in the workforce need to also look to get into the 401(k) plan, as well as pursing a Roth retirement fund if not yet included in a retirement package by your employer.

Despite this being the most fruitful age to save, many don’t, because of a lack of education on the topic, as well as accumulated debt from student loans or just a lack of income.

Banking experts all agree that no factor should stand in the way of early saving.

“Make the most out of those few dollars you can get hold of by allocating them wisely,” Geary wrote. “Don’t squirrel them away under the mattress. You will want them to be invested in a way that will encourage your assets to grow as quickly as possible.”

If a person wasn’t able to save in their 20s, that doesn’t mean they are destined to a shortage of funds upon retirement.

Bankers explain that there is no set benchmark for when to start saving, just adding that those who start later might just need to go the extra mile in their saving efforts to catch up.

That’s the case for many people who get their first crack at saving when they are in their early-to-mid 30s.

“Consider a more aggressive investment strategy which could potentially help you build your balance faster,” CitiBank.com‘s retirement and savings page reads. “You can also work longer to delay tapping retirement funds and give them more time to grow.”

The 30s are also a unique time for retirement planning, because that’s a time in people’s lives where houses are traditionally bought and children are usually born, which sometimes can put added expenses in people’s minds ahead of retirement saving.

That should be avoided at all costs, according to experts who urge 30-Somethings to stay true to the plan they previously made, even if it means staying at a slightly lesser-paying job to remain in that company’s retirement program.

“Breathe easy. You won’t have to reach all of your goals at once,” Geary said. “But, retirement should remain your top priority. That means you’ll need to work hard to balance spending with saving.”

Geary also explained that the 30s are a time where a person’s accumulated assets are substantial enough to begin pursing company stock options, while also looking into disability insurance.

“Safeguard your financial future,” Geary said. “If you’re hurt or injured and can’t work, disability insurance will replace up to 60 percent of lost income, but only for a period of time. Most employers offer short-term benefits up to a couple of months.”

The culmination of all of this saving is when a person heads toward the 60s and is ready to exit the workforce.

Even then, the work is not done. Experts say that all throughout the days leading to retirement, people should continue to save, while also gauging if what they have accumulated is enough to last the rest of their lives.

If what you’re doing is enough, experts tout soon-to-be retirees need to come up with an income plan. With bi-monthly checks no longer coming into and out of a person’s home, some retirees struggle to budget their money properly.

“Ask yourself question, such as: How will you pay for essential expenses like food or housing? How much will you need for discretionary spending like travel or entertainment? How will you address inflation?” Wells Fargo’s retirement checklist states.

It’s a 10-letter word that takes 30-40 years to sufficiently prepare for.

Save early and often and enjoy your finest years of life.

* Information from Bankrate.com, Citibank.com and Wells-Fargo.com was used in this article.