Blog Post

Planning for retirement—at age 20

May 31, 2013

    Paige Baschuk, Daily Briefing

    Will you be ready for retirement? A new piece in the Wall Street Journal  explains how you can prepare for your career's eventual end during every decade of your life. Even in your 20s.

    Experts recommend putting upwards of 12% of your income away your 20s—even if it only serves to get you in the practice of saving. In the accompanying video to the piece, MarketWatch's Jim Jelter says that this early decade is critical to the creation of good habits that will help you get the most out of your "golden years" later.

    He says that planning for retirement is "more than an endless math problem" on how to stretch one's salary—it is a lifestyle. Jelter advises forming strong healthy habits like exercising and eating well; such behaviors not only will lengthen your life, but lower your health care costs in retirement.

    In your 30s and 40s, you should put a portion of any raises or bonuses away for retirement, experts say. And in the 10 to 15 years before retiring, calculate how well you have saved for health care costs.

    According to the Employee Benefit Research Institute, a 65-year-old couple retiring in 2012 would need at least $163,000 in savings to stand even a 50% chance of covering their health care costs. To up those odds to 90%, the same couple should save at least $283,000.

    Jelter advises against setting a date or age when you will retire, but a dollar amount. He also recommends taking a "retire to" instead of "retire from" attitude to avoid feeling a void when you leave the workforce.

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