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3 Steps to Meeting Your Retirement Goals, No Matter What They Look Like

By Maurie Backman – Dec 8, 2021 at 6:48AM

Key Points

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These moves could be the ticket to your dream retirement.

When you imagine yourself retired, what does that look like? Are you traveling a lot? Have you opened the bake shop you've always wanted to run? Or are you simply enjoying your days tending to your garden and spending time with family without the pressure of a full-time job holding you back?

No matter what your specific retirement goals consist of, a few key moves on your part could make it easier to achieve them. Here are three steps worth taking.

Smiling person outdoors wearing backpack.

Image source: Getty Images.

1. Save for retirement from an early age

When it comes to growing retirement wealth, time is potentially the most effective tool at your disposal. And that's why it really pays to start setting money aside for retirement as early as possible.

Now if you're already in your 30s or 40s and have yet to start funding an IRA or 401(k) plan, don't worry. You still have plenty of time to build up a solid nest egg.

And besides, Americans are living longer these days, so if you have to extend your career a few more years to make up for lost savings, that's a possibility, too. The key, either way, is to give your money plenty of time to grow.

2. Keep funding your savings consistently

You may reach various stages of life where it's tempting to let your retirement savings fall by the wayside, such as when you're trying to put your kids through college or pay for one of their weddings. But it's really important to keep funding your IRA or 401(k) consistently, even if you're being pulled in multiple directions from a financial standpoint.

The more money you put into your retirement plan, the more you can invest. And so while you might think that putting your IRA or 401(k) contributions on pause for a year won't make a difference, in reality, it might.

3. Load up on stocks in your retirement plan

Some people are risk-averse when it comes to investing, and if you're one of them, you may not love the idea of putting your long-term savings into stocks. But if you play it safe and stick with bonds, you may not enjoy the same robust returns the stock market is known for. And that could leave you with a much smaller nest egg than you'd like.

Let's assume you follow the above steps -- you start socking $500 a month away for retirement at age 30, you contribute that sum to your savings every month, and you go heavy on stocks in your IRA or 401(k). If your retirement portfolio delivers an average annual 8% return, which is a few percentage points below the stock market's average, you'll end up with a $1.2 million nest egg by age 67, which is full retirement age for Social Security purposes.

That sum of money might make it possible to do whatever it is you've always dreamed of during retirement. And just as importantly, it might buy you the financial security you're after.

Your picture of retirement might look different than your neighbor's, and it also might evolve over time. But if you follow these steps, there's a good chance you'll manage to achieve whatever goals you set for yourself.

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