Every month, your company may deposit money directly from your paycheck into a 401(k) without you paying much attention to it, except for a quick glance when your W-2 is mailed out each year.
Flashback for a moment. The Great Recession during the early 2000s was life-changing for many members of the workforce. Nearly 8.7 million people lost their job over that roughly three-year period and had to make several new transitions. Enrollment at four-year universities, community colleges and technical schools spiked as people prepared themselves for a career switch. That means their planning for retirement also changed.
We all think about that day when we’ll finally retire, but some of us are more prepared than others. It’s true, you can overthink retirement – but for most of us, planning for retirement involves careful consideration of many factors.
Whether you began thinking of these questions years ago, or haven’t thought of them for years, each is vital in planning for retirement:
1. When Should I Take Distributions?
Planning for retirement looks different for everyone, and those differences widen when you consider the various decades of life. Here is a look at how retirement planning changes during different seasons of your life:
The Roaring 20s
It’s important to get started with your investments early, and compound growth is something that should entice the interest of a 20-something. Compound growth is the gain on top of your previous gains. These snowball over the years and work to your advantage.