5 Steps to Retirement Planning: How-to Guide

Although 71% of adults in the US claim to have a high level of financial literacy, nearly half of Americans risk retiring without savings. In fact, 37% of adults don’t have any financial retirement planning strategy, yet this should be a priority for anyone who wants to experience comfortable, fun, and secure golden years. 

Pointing fingers aside, what are the basics of retirement planning? And why do you need a tax planning advisor to offer guidance before you choose a savings strategy? Explore this retirement plan guide to learn more and get started in 5 easy steps. 

What is Retirement Planning? 

This is a game plan or type of investment planning that can help retirees manage their finances even if they decide never to work again in the future. 

The benefits of having such a strategy are immeasurable whether circumstances push you to retire early or late. 

Most importantly, having this plan as early as now can help you avoid future economic uncertainties that may take a toll on your spending power.  

How Much Do You Need to Save for Retirement? 

Although needs vary with individuals, a general rule of thumb recommends having at least 10% to 15% of your pre-tax income in annual retirement savings. 

A  high-income individual can retire successfully if their savings hit the top of this range, while low earners don’t necessarily have to hit above the range, given that social security may supplement their income when they stop working. 

When Can You Start? 

General financial advice for retirement that most experts give is beginning your journey early. 

Starting early means coming up with a comprehensive plan as soon as possible, whether you’re fresh from college or decide to turn on a new leaf when approaching your 40s. 

While you can plan for your retirement at any stage of your life, beginning allows your money to grow and likely amass a stupendous fortune in the long haul. 

Factors to Consider 

Knowing how to start retirement planning can be tricky at first. The process combines your regular savings and long-term investments, allowing you to pay bills even when you’re not earning an income or to retire and invest in your dream family business. 

Some of the factors that you may need to consider for this goal include the following: 

  • Your risk appetite, depending on dynamic goals and commitments as you add more years
  • Your time horizon, whether short-term, medium, or long-term 
  • Do you have any family plans? 
  • The likelihood of future inflation eroding the value of your saved money
  • Professional help with retirement planning 
  • The affordability of your basic plan or other considerations

5 Easy Steps for Successful Retirement Planning 

As noted earlier, knowing how to do retirement planning takes more than just depositing a certain amount of money to your bank account every month — it’s a multi-step process that evolves gradually to build a financial cushion that will help you retire peacefully. 

That said, here is how to start retirement planning in 5 easy steps: 

Decide on a Time Horizon 

Time horizon refers to the duration in which you want to grow your savings. You can get a clear picture of this by considering your current age and the expected age of retirement before laying down an effective strategy. A longer time horizon will give your money more time to grow and help your portfolio withstand prevalent investment risks. 

Define and Understand Your Retirement Spending Needs 

While everyone wants to retire wealthy, your savings’ longevity largely depends on the future withdrawal rate or spending habits. 

You need to have a clear future of how much you will likely spend on mortgage, property tax, medical expenses, or even an annual family vacation. If unsure of these expenses, seek professional retirement planning advice

Consider the After-Tax Rate of Investment Returns 

Calculating the true after-tax rate of return will help you gauge the feasibility of the portfolio generating the desired outcome. 

While considering this, it’s worth noting that high pre-tax return rates in excess of 10% can be far-fetched even if you’re in for the long term. Moreover, return rates are likely to decline when you shift to low-risk retirement portfolios. 

Assess Risk Tolerance Against Investment Goals

Ideally, your investment portfolio should balance risk aversion with return objectives so that you get the most out of your plan. In other words, you need to be comfortable with the risks taken and clearly distinguish between luxury and necessities. 

Embark and Stay on Estate Planning 

Lastly, you might need to seek professional wealth management services in Portland and plan your estate. On top of having life insurance coverage, doing so gives a legal framework for distributing your wealth as you desire, especially if it outlives you.  


Follow the above steps for retirement planning to achieve what many people often fail to accomplish—a balance between desired lifestyle and realistic return expectations. 

If you get it right, you won’t have to worry about either of these because your money will most likely outlive you.


Writing has always been a big part of who I am. I love expressing my opinions in the form of written words and even though I may not be an expert in certain topics, I believe that I can form my words in ways that make the topic understandable to others. Conatct:

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