You don’t have to believe the rumors about retirement: It doesn’t have to happen when you turn 65. It doesn’t have to mean the end of your working days. It doesn’t require moving to Florida. And just like there are different ways to retire, there are different ways to think about your retirement savings: It can be an untouchable pile of money in a diversified account—but it can be many other things, too.
In a week’s worth of reporting on how to save for retirement at any age, here are three universal truths we heard from our experts.
The term itself is a little confusing.
Don’t mistake retirement for a very long vacation that you’ve budgeted for. (It’s not dollars in the bank divided by the number of years you think you’ll live = your annual allowance.) You may still need income, but your savings will be the one working for it, not you. “Understand the underlying mechanisms for how retirement works in very broad strokes,” says Paco De Leon, author of Finance for the People: Getting a Grip on Your Finances. For many people, saving for retirement means investing a portion of their income over a long period of time and eventually amassing enough assets to generate a revenue stream that they can live off. “Do your best to stay consistent,” she says, “and if you can, enjoy the damn ride.”
You (yes, you!) could benefit from expert help.
You might think certified financial planners are reserved for the same people who hire butlers and personal umbrella holders, but that’s not the case. “A financial planner [can] help you navigate your financial goals,” says Zaneilia Harris, of Harris & Harris Wealth Management in the D.C. area and author of Finance ’n Stilettos. She can also decipher confusing documents and terms (liquidity and trusts and bonds, oh my!) and help guide your priorities as you consider your finances different life stages, whether you’re buying a home or deciding how to save for retirement. A conversation around how to save for retirement will involve “reviewing your current expenses, anticipated retirement expenses, reviewing what you are saving and what you have saved, your investment selections—all to see if you are on the right track with achieving the lifestyle you desire when you retire,” Harris says. “If not, your financial planner can help you map out a plan hopefully to meet your retirement goals.”
You’re not out of time!
“A lot of older people think talking retirement is [for] young people,” says Bola Sokunbi, author of the Clever Girl Finance books. “They think, ‘I have no time. Woe is me!’ But you can start to save at any point. And retirement is not a single day. You get to 65, you still have years to live. You can still grow your money. You can [still] earn money.” Instead of making retirement the endpoint, “you can think of it as an opportunity.”
More tips on minding your retirement savings at every age: