The following are key points that you might consider as you develop a retirement savings plan.
- Determine how much income you will need in retirement. Use the models presented in this guide if you want a rough estimate.
- Save early, consistently, and over as long a period of time as possible. Use the American Savings Education Council’s Ballpark E$timator model to estimate how much you need to start saving for retirement.
- If you are managing your investments, then diversify. Remember, you should be investing over the long run.
- Consider purchasing an annuity with your 401(k) balance to address longevity risk. Insurance companies and financial advisors offer a variety of annuities. Some of these protect against longevity risk and some do not. Before buying any such product, consult a financial advisor who won't get a commission by selling you an annuity product.
- Consider other risks and ways you can address them.
- Take into account medical costs in retirement. Purchase supplemental insurance if necessary and set aside an emergency fund for unexpected medical costs.
- Talk to your HR professional, benefits counselor, or financial planner if you need professional advice or help developing a comprehensive retirement savings plan.