Question 1

How much do I need to save for retirement?

Accepted Answer

Common guidelines: save 10-15% of income throughout career, or aim for 10-12x your annual salary by retirement. For $50,000 income, target $500,000-600,000. Social Security provides about 40% of pre-retirement income, so personal savings fill the gap.

Question 2

What age should I retire?

Accepted Answer

Full Social Security benefits: age 67 for those born 1960+. Early retirement at 62 reduces benefits by 25-30%. Delayed retirement at 70 increases benefits by 8% per year. Financial independence may allow earlier retirement if you have sufficient savings.

Question 3

How long will my retirement savings last?

Accepted Answer

The 4% rule suggests withdrawing 4% annually (adjusted for inflation) for 30+ years. $500,000 savings supports $20,000/year withdrawal. Higher withdrawal rates reduce years money lasts. Your actual duration depends on returns, inflation, and spending.

Question 4

Should I contribute to 401(k) or IRA first?

Accepted Answer

Contribute to 401(k) up to employer match first (free money). Then max IRA ($7,000/year). Then return to 401(k) up to limit ($23,000). Traditional accounts reduce current taxes; Roth accounts provide tax-free withdrawals. Choose based on current vs expected future tax rates.

Question 5

What return should I expect in retirement?

Accepted Answer

Pre-retirement: 7-10% for stock-heavy portfolios. In retirement, shift to conservative allocation (bonds, cash) targeting 4-6% to reduce volatility. Bonds provide stability but lower returns. Maintain some stocks for growth to offset inflation over 20-30 year retirement.

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