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The Smart Woman's Guide to Planning for Retirement

The Smart Woman's Guide to Planning for Retirement

Responsible and practical financial tips for every decade of your life
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You've likely heard more than a few times that hindsight is 20/20. It's true. Who among us cannot look in the rearview mirror of life and see things more clearly? While I am determined not to live my life with regret, there are a few things I wish I'd known sooner. Like how the decisions I made in my 20s would throw my 30s into a major tailspin. Had I known or cared, perhaps I could have avoided some very costly mistakes.

What follows are simple guidelines or benchmarks for each decade of life as it relates to preparing for retirement.

In Your 20s

This is your defining decade, and by far the most important decade for retirement planning. You're younger—and probably poorer—than you'll ever be again. Laying the groundwork now can make all the difference for you in the years to come. A few tips:

Start an emergency fund and get out of debt. Build your emergency fund as quickly as you can. This will give you the cushion you need to weather unexpected expenses and emergencies without having to raid your retirement savings. If you're in debt, fix that now—not later.

Open a retirement savings account. Join and participate in your employer's retirement savings plan, at least to the match, as soon as you qualify. Open and fund a Roth IRA as well. Consider yourself on track if you are regularly contributing five percent of your annual income to retirement savings.

Stay physically, emotionally, and spiritually fit. Retirement preparation is not all about money. It also involves building and maintaining physical health by watching what you eat and exercising—both of which are much easier to begin when you're young and filled with energy. Investing in relationships will nurture your emotional health, while deepening your walk with God will keep you spiritually fit.

In Your 30s

Your college loans are probably paid off, and you may be married and starting a family. You have career goals, but haven't reached your full earning potential. If you want to retire by age 67, you have about 30 years.

Fund your 401(k) and a Roth IRA. If your employer offers a 401(k), participate at least to the point of the match (if there is one), so you don't leave any free money on the table. Also open a Roth IRA, and make funding it to the maximum each year a top priority. Set up automatic deposits. Because you now have more financial responsibilities, you may be tempted to forgo saving for retirement, but don't do it. Time is still on your side, but the window is beginning to close.

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