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12 Essential Steps To Help Keep Your Retirement Strategy On Track

Expert Panel
POST WRITTEN BY
Forbes Finance Council
This article is more than 6 years old.

Saving enough money for a comfortable and worry-free retirement is still an area where many Americans are falling behind. While retirement preparedness has improved over the last few years, four in 10 Americans are not saving any money or altogether failing to put together a strategy for retirement, according to this year’s Retirement Confidence Survey by the Employee Benefit Research Institute. Additionally, only 18% of those actively saving for retirement say they are feeling very confident in their ability to live a comfortable life after retiring.

Below, 12 Forbes Finance Council members share their expert advice on what steps any working American should take to ensure their retirement strategy is on track and to feel secure about their financial future.

Twelve financial experts share how to best prepare for retirement.

All photos courtesy of Forbes Finance Council members.

1. Don't Rely On Rules Of Thumb

A major reason Americans aren't prepared for retirement is that they rely on rules of thumb or ballpark figures. For instance, the idea that you need a million dollars for retirement is overreaching for some, and too little for others. These figures can either seem impossible or leave you lacking. Instead, you should get a sense of your specific needs in retirement (such as traveling expenses). - Elle Kaplan, LexION Capital

2. Don't Be An Ostrich With Your Head In The Sand 

As much as you may not like the answer, start using a tool that projects your retirement income. As a general rule of thumb, start with your current take-home pay. If your retirement income projection meets your current take-home pay and you're content with your lifestyle, you're in a good shape, so stay the course. If you don't like the answer, make the necessary recommended adjustments ASAP! - Paul Ewing, Prosperity Advisory Group

3. Don't Forget The Cash Flows 

Meet with a financial planner. Financial planners can help you run cash flow projections which are an integral component of retirement planning. Focusing solely on investment management is not enough. Financial planners have the tools and experience to help you define your goals, assess your financial condition, and project your probability of success with respect to your retirement. - Amir Eyal, Mylestone Plans LLC 

4. Take Advantage Of Free Online Tools From Trusted Services 

Fidelity, Schwab, and Vanguard are among the most trusted names in financial planning. Each provides free calculators and guides to help you calculate how much you should aim to save. As a start, go to a search engine and enter "Fidelity retirement calculator." You will be guided through every step of a process the way a Certified Public Accountant (CPA) might do in person. - Atish Davda, EquityZen

5. Seek A Financial Planner's Advice

Most financial planners use software programs for retirement planning. The plans are customized for each client using their current data and their desires for retirement. The plan is then tested using a Monte Carlo simulation to determine probability. The goal is to modify the plan until the simulation meets the retirement needs with the highest probability of achievement. - Rob Gabridge, Tarfis Wealth Management

6. Use Helpful Benchmarks 

There are very helpful benchmarks to keep in mind as you near retirement age and are trying to measure how much should be saved by age. In Charles Farrell’s book, Your Money Ratios, he uses a set of formulas to determine how much you must accumulate to be on the right track for retirement. By age 35, you should have about 1.4 times your annual salary; by 45 - 3.7 times; and by 55, you should have 7.1 times, eventually going up to 12 times your pay. - Stacy Francis, Francis Financial, Inc.

7. Develop A Simple Strategy 

The idea of retirement preparedness warrants a high level of consideration. However, if someone wants a "feel" for their health, then lean into the heuristic of withdrawal rates. Most experts recommend a withdrawal rate of 4%. So, if you want a $50,000 retirement income, divide this number by .04 and you'll arrive at $1,250,000. After you have your gut check, dig in the details to ensure accuracy. - Darryl Lyons, PAX Financial Group LLC 

8. Get Better At Managing Your Money

Maybe it’s just me, but I think it’s a rare individual that overestimates what it’s going to take. You need to get good at saving and investing. There’s just no way around it. So, automate your contributions. Put it on autopilot. Have your bank automatically move a certain amount of money (preferably a fixed percentage) into investment accounts every single month. Max out your 401(k). - Ismael Wrixen, FE International

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9. Save Until It Hurts (Then Save A Little More) 

We regularly advise our younger clients to set aside at least 10% of their income for retirement, 15% if they can. This "pay yourself first" mentality, done at the beginning of their working years, establishes good habits that will pay off in the future. Many unexpected events can happen in life, so it's better to oversave so as to create retirement flexibility. - Erik Christman, Oxford Financial Partners

10. Determine What Your Retirement Looks Like 

Most people know the word retirement well. However, they haven't really identified what retirement looks like for them. In order to have a strategy, you have to know what you're aiming for. So Americans need to take a hard look and define what they want their retirement to be. Without having a clear goal, they won't be able to estimate what they'll need later in life, whether they get professional help or not. - Justin Goodbread, Heritage Investors 

11. Write It Down 

Just ask yourself one question: Do I have a written plan? If it's not in writing, then it's probably not going to happen. A certified financial planner can put a strategy in writing that you can understand. Imagine pulling out a simple plan on a given day and knowing exactly where you stand. You will know you're on the right track. - Casey Weade, Howard Bailey Financial, Inc. 

12. Find Ways To Consistently Save 

After paying off your housing, food, travel and other expenses each month, do you manage to consistently save money? Most Americans do not. So for starters, make sure you are not one of them. If you are, figure out a way to not be. Increasing mortgage payments or setting up automatic monthly contributions to your 401(k) are good ways to enforce discipline so that you don’t have to. - Seth Allen, Pinkowski-Allen Financial Group