Preparing for Retirement: Small Steps You Can Take Now

Why Starting Small Beats Waiting for "Someday"

Did you know that putting aside just $25 a week starting at age 30 could grow to over $150,000 by retirement? The secret to a comfortable retirement isn't making huge sacrifices—it's about consistent, smart choices that add up over time. Whether you're 25 or 55, these manageable steps will put you on the right path without overhauling your lifestyle.

The Power of Early Action

A 25-year-old who saves $300/month could accumulate more than a 35-year-old saving $500/month, thanks to compound growth. Time is your most valuable retirement asset.

Step 1: Know Your Numbers (Without the Overwhelm)

The Quick Retirement Checkup

• Multiply current annual expenses by 25: This estimates your "retirement number" (for 4% annual withdrawals)
• Check your Social Security statement: Available at SSA.gov
• Use the 1x salary rule: Aim to have 1x your salary saved by 30, 3x by 40, 6x by 50

Example Calculation

If you spend $40,000 annually now, you'd want $1 million saved ($40,000 x 25). But remember—this includes future Social Security and any pensions.

Step 2: Automate Your Future

Set-and-Forget Strategies

• Increase 401(k) contributions by 1% annually: Most plans offer auto-escalation
• Direct deposit splits: Send $50/paycheck straight to a Roth IRA
• App round-ups: Acorns or Qapital invest your spare change

The Bonus Trick

Whenever you get a raise, divert half to retirement before lifestyle creep hits. A 3% raise means 1.5% more to savings.

Step 3: Reduce Future Expenses Now

Lower Your Retirement Cost of Living

• Pay off debt: Every dollar of debt retired is one less dollar needed later
• Downsize test drive: Try living on 80% of your income for 3 months
• Health investments: Daily walks and healthy eating reduce medical costs

Step 4: Smart Account Choices

Where to Put Your Money

Step 5: Boost Income Without a Second Job

Easy Side Income Streams

• Rent out unused space: Storage, parking, or a spare bedroom
• Sell unwanted items: The average home has $3,000 in unused goods
• Cashback apps: Rakuten or Ibotta earn on regular shopping

Common Mistakes to Avoid

Retirement Planning Pitfalls

• Overlooking fees: A 1% difference could cost $100,000+ over time
• Being too conservative: Inflation makes bonds risky long-term
• Counting on home equity: You'll always need somewhere to live

When to Seek Professional Help

Signs You Need a Financial Advisor

• You have multiple old 401(k)s to consolidate
• Your investments are all in company stock
• You're within 10 years of retirement

Finding Affordable Advice

Look for fee-only advisors charging by the hour ($150-$300) or flat project fees.

Retirement Readiness Checklist

Each Year, Ask:

• Did I increase my savings rate?
• Did I rebalance my investments?
• Did I review my beneficiaries?
• Did I learn one new financial skill?

Remember: Retirement planning is a marathon, not a sprint. Small, consistent actions today will give you freedom and security tomorrow.