Will You Have Enough Money for Retirement?

by Megan Nye |July 24, 2023

When people joke that they will never retire, sometimes there is actually some truth to it. It might be because they truly enjoy their career and want to work as long as possible, but it could also be that, financially, they feel they have no alternative but to keep slogging away. And because you don't want that to be you, you need a smart retirement saving strategy.

It's safe to say the days of a traditional retirement (the kind where you would be given a retirement party, and then be supported by a fat pension along with your Social Security check) are long gone. Planning for a successful retirement now is more of a do-it-yourself endeavor.

In fact, we often don't choose our retirement date; circumstances, or fate, do. (According to a 2022 report from the Federal Reserve, for example, 45% of recent retirees in 2021 said that health problems, caring for family members and lack of work contributed to their decisions to stop working.)

If you're looking for ways to ensure you can stop working down the road and continue to live well, consider these strategies for jumpstarting your retirement plan.

A couple with two men enjoys cooking at home

Have a conversation (or two) with yourself

Certainly, at some point, you may want to hire a professional to give you guidance, but if you're not there yet, you can look at retirement planning as a DIY project. That means you (or you and a spouse or life partner) may want to play the role of both your own financial advisor and the client, asking and answering some key questions:

  • How do you envision your life when you're retired? Do you have expensive hobbies you'll want to continue, like boating or buying antiques? Or do you imagine your retirement being a happy one if you can afford a decent streaming service?
  • Do you hope to live a simple, uncomplicated life in your current home, or do you plan to, say, travel around the world or have a cottage on a beach somewhere?
  • Are you hoping to leave a lot of money in the bank for your descendants, or are you fine with spending every dime you earned?

It's a lot to think about, notes Andre Jean-Pierre, a financial advisor and founder of Aces Advisors, LLC, in New York City. "The art of financial planning includes managing lifestyles, expectations and emotions."

Be an early bird

Simply put, the more time you have to save, the more money you're going to eventually have. A bigger runway to retirement lets you harness the power of compound interest and the stock market. For instance, if at the beginning of the year 2000, you invested $5,000 in the S&P 500, a popular stock market index, by the end of 2022, you'd earn $21,229.37, assuming you reinvested all dividends and did nothing else. If between 2000 and 2022, you were also socking away more money into retirement accounts and interest-bearing savings accounts, you would, of course, have even more. But of course, please remember that past performance is not indicative of future results.

A man pushes a woman out on a kayak

Pace yourself

One of the best ways to stay on track with your retirement goals is to make sure you're setting realistic amounts of money to put away. "Any plan you establish should be comfortable enough to continue for the long haul," says Jean-Pierre. "This is an underrated truth in retirement savings: Consistency over time trumps speed." That's because, if you're too ambitious in what you put toward retirement and have nothing left over for your bills or vacations or whatever else is important to you, "you will more than likely quit before reaching your goal, he adds. "An important part of all planning is for the plan to be realistically livable."

Use every angle

Saving for the future can be a challenge, whether you're living paycheck to paycheck and having enough trouble just paying your bills or you're saving up for a house or have kids in college. We often have to "make tough choices" when it comes to bills, says Rui Yao, a certified financial planner and a professor at the University of Missouri, which is why financial planning is an important step in finding a balance between financing your present and future. And while this may be a do-it-yourself project, it doesn't have to be a do-it-yourself-completely-alone project.

"On a positive note," says Yao, "U.S. tax laws and often employers incentivize retirement savings by providing tax deductions, tax credits and matching contributions," all of which can give your savings a significant boost.

Meanwhile, you can probably do more on your own than you might think. Looking over their budget, most people can find some spots where they can make cuts, Yao points out, and the money they divert from unnecessary expenses into retirement and savings can be surprisingly meaningful. "Small amounts add up," she says. And that's especially true over time. After all, the sooner you get started, the more likely it is that someday when you make a crack about never retiring, you really will be joking.

— With additional reporting from Geoff Williams and the Life and Money by Citi editors.

Megan Nye

is a personal finance freelance writer. Her writing has been published by Business Insider, Credit Karma, Lending Tree, U.S. News & World Report, Personal Capital and Northwestern Mutual.

The content reflects the view of the author of the article and does not necessarily reflect the views of Citi or its employees, and we do not guarantee the accuracy or completeness of the information presented in the article.

This is for educational purposes only and the views expressed here are those of the author and do not necessarily reflect those of Citi.