A senior couple crouching and petting a dog.

It’s always the right time to prepare for retirement. No matter your age, the planning you do today can help make you financially ready for retirement and the lifestyle you want later.

Just getting started: 18 to 34 years old

When you’re just getting started in the workforce, you have your entire working career to save for retirement. The earlier you start saving, the more time your money has to accumulate and grow. Your retirement plan may change over time, but today’s planning is a start in the right direction.

Learn to live within a budget. Know your income and expenses. If there’s money left over in your budget, save it; don’t spend it. To help you stay on track with spending and saving, try Compass, LGFCU’s complimentary online money management service.

Enroll in your job’s retirement plan. Many employers offer either a 457 plan for government employees, or a 401(k) plan. If your employer offers matching funds, make sure you contribute enough money to qualify. By contributing, you reduce your taxable income and the money you invest in the plan grows tax-free until it's withdrawn.

Contribute to an Individual Retirement Account (IRA). If your workplace doesn’t have a retirement plan or you want to save even more, open a Roth IRA. Check the IRS website for annual contribution limits. The benefit here is that a Roth IRA offers tax-free withdrawals on earnings and dividends during retirement.

Alternatively, a Traditional IRA may meet your retirement goals. This retirement savings  offers upfront tax deductions. The contributions you make may be fully or partially tax-deductible. Contributions grow tax-deferred, which means you aren’t taxed on the gains until the funds are distributed.

As long as you have earned income, you can keep putting money away. Another benefit is the required minimum distribution age is now 72, up from age 70 ½.

Your accumulation years: 35 to 54 years old

You’re likely earning more at this stage in your career, so review your retirement plan. Ask yourself, “Am I on track to meet my financial goals?” If you are, great! If not, now’s the time to step up your savings and revise your retirement strategy to meet your goals.

Review your mix of assets. Dig deeper into your retirement portfolio, making sure your asset mix matches your retirement timeline and savings comfort level. A financial advisor can help guide you toward investments to help you meet your financial goals. Continue to review your plan each year and make changes, if necessary.

Contribute more toward your retirement accounts. As your earnings increase over time, be sure your retirement savings keep pace. Once you reach age 50, the IRS allows you to make catch-up contributions above the normal limits to your IRAs, 401(k) and 457 plans.

If your assets are in several different retirement plans because you’ve changed jobs over the years, you may want to bring them together in an IRA. This may offer broader investment choices, more control and lower expenses than workplace retirement plans.

Nearing retirement: 55 years old and up

Now’s the time to get practical. There’s much to consider — income streams such as Social Security, savings and investment payouts, health care costs and life expectancy. This retirement income estimator calculator can help you start planning.

If necessary, wait and retire when you can afford to. You can also consider semi-retirement, holding a part-time job instead of going into full retirement.

When to sign up for Social Security benefits? If you wait until full retirement age to collect, you’ll receive your full benefits. You can take benefits as early as age 62, but your benefits will be reduced. It may make sense for you to take reduced benefits or it may not, depending on your financial situation. Visit the Social Security Administration website for more information and talk to your financial advisor for recommendations.

Budget for health care expenses. Health care costs in retirement could represent a significant chunk of your budget. Consider purchasing a Medicare supplemental insurance plan to help cover out-of-pocket costs. Also, reach out to your insurance provider to learn if long-term care insurance is right for you.

Consider downsizing. You may be able to generate more retirement income by selling your current home and moving to a smaller house, apartment or retirement community. You may have other reasons to downsize, such as being closer to family or the desire to live in a different climate. Consider your options and make the choice that’s right for you.

Getting retirement ready is not a set-it and forget-it arrangement. Check in on your plan often. For additional guidance, call or visit your local branch to get help preparing a financial plan for retirement.

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