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Crush Your Retirement Goals With These 3 Moves

By Maurie Backman - May 9, 2021 at 5:36AM

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Your dream retirement is waiting. Go after it.

What do you see yourself doing in retirement? Are you hoping to travel extensively, move to a bustling city, or own a lake house where you can spend your days relaxing by the water? No matter what goals you have for your senior years, the right strategy could be your ticket to achieving them. Here's how to rock those goals -- and secure the retirement of your dreams.

1. Save from an early age

When it comes to building wealth for retirement, time is your greatest weapon, and the sooner you start contributing money to your nest egg, the more impressive a sum you stand to wind up with. In fact, imagine you're able to contribute $400 a month to your IRA or 401(k) plan, and that your investments in that plan generate an average annual 8% return (we'll talk about that in a bit). Here's what your ending balance will look like based on the length of your savings window:

Savings Window

Ending Balance

45 years

$1.86 million

40 years

$1.24 million

35 years


30 years


25 years


20 years


Table and calculations by author.

As you can see, adding just five years to your savings window makes a huge difference in terms of the nest egg you bring with you into your senior years, so push yourself to save from as young an age as possible.

Smiling older man and woman clinking wine glasses

Image source: Getty Images.

2. Invest your savings wisely

The average annual 8% return we used as an example? That's a reasonable assumption for a stock-heavy portfolio. And while there's risk involved when you invest your savings in stocks, over time, the market has a strong history of performing well. On the other hand, if you play it too safe with your nest egg (namely, by doing heavy on bonds when retirement is still many years away), you might generate just a 4% average annual return. And at that point, saving $400 a month over 45 years will leave you with $581,000, which is a nice sum of money, but nowhere close to the $1.86 million you'd retire with if your portfolio were to deliver an average annual 8% return.

3. Choose the right retirement plan

Chances are, you want financial flexibility during your senior years -- and the right retirement savings plan could be your ticket to it. Specifically, it could pay to house your savings in a Roth IRA for a couple of reasons. First, Roth IRA withdrawals are yours to enjoy tax-free. That means you'll have less of a tax burden in general and you also won't have to worry about losing a portion of those withdrawals to the IRS. Secondly, Roth IRAs are the only tax-advantaged retirement plan to not impose required minimum distributions, or RMDs. This means that if you have a year when you don't need to tap your savings, you'll have the option to leave that money alone and continue to let it grow in a tax-free fashion.

After a lifetime of hard work, you deserve the rewarding retirement you've always imagined for yourself. Follow these simple tips, and there's a strong chance you'll manage to accomplish the goals you set for yourself -- and maybe even knock out a few new ones along the way.

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