TOP 10 WAYS TO 

PREPARE FOR 

RETIREMENT
Top 10 Ways 

to Prepare for 

Retirement

Financial security in 

retirement doesn’t 

just happen. 

It takes planning 

and commitment 

and, yes, money.

Facts

n Fewer than half of Americans have calculated how 

much they need to save for retirement. 

n In 2016, almost 30 percent of private industry 

workers with access to a defined contribution plan 

(such as a 401(k) plan) did not participate. 

n The average American spends roughly 20 years in 

retirement. 

Putting money away for retirement is a habit we can 

all live with. 

Remember...Saving Matters! 

1. Start saving, keep saving, and stick to 

your goals

If you are already saving, whether for retirement or 

another goal, keep going! You know that saving is a 

rewarding habit. If you’re not saving, it’s time to get 

started. Start small if you have to and try to increase 

the amount you save each month. The sooner you start 

saving, the more time your money has to grow (see the 

chart below). Make saving for retirement a priority. 

Devise a plan, stick to it, and set goals. Remember, it’s 

never too early or too late to start saving.
2. Know your retirement needs

Retirement is expensive. Experts estimate that you

will need 70 to 90 percent of your preretirement

income to maintain your standard of living when you

stop working. Take charge of your financial future.

The key to a secure retirement is to plan ahead. Start

by requesting Savings Fitness: A Guide to Your

Money and Your Financial Future and, for those near

retirement, Taking the Mystery Out of Retirement

Planning. (See back panel to order a copy.)

3. Contribute to your employer’s retirement

savings plan

If your employer offers a retirement savings plan,

such as a 401(k) plan, sign up and contribute all you

can. Your taxes will be lower, your company may

kick in more, and automatic deductions make it easy.

Over time, compound interest and tax deferrals make

a big difference in the amount you will accumulate.

Find out about your plan. For example, how much

would you need to contribute to get the full employer

contribution and how long would you need to stay in

the plan to get that money.

Years 5 15 25 35

$760,303

$347,870

$138,210

$31,629

THE ADVANTAGE OF STARTING EARLY

Start now! This chart shows what you would 

accumulate at 5, 15, 25 and 35 years if you 

saved $5,500 each year and your money 

earned 7% annually. 
4. Learn about your employer’s pension plan

If your employer has a traditional pension plan, 

check to see if you are covered by the plan and 

understand how it works. Ask for an individual 

benefit statement to see what your benefit is worth. 

Before you change jobs, find out what will happen 

to your pension benefit. Learn what benefits you 

may have from a previous employer. Find out if 

you will be entitled to benefits from your spouse’s 

plan. For more information, request What You 

Should Know about Your Retirement Plan. (See 

back panel for more information.)

5. Consider basic investment principles

How you save can be as important as how much 

you save. Inflation and the type of investments 

you make play important roles in how much you’ll 

have saved at retirement. Know how your savings 

or pension plan is invested. Learn about your 

plan’s investment options and ask questions. Put 

your savings in different types of investments. 

By diversifying this way, you are more likely to 

reduce risk and improve return. Your investment 

mix may change over time depending on a number 

of factors such as your age, goals, and financial 

circumstances. Financial security and knowledge 

go hand in hand.

6. Don’t touch your retirement savings

If you withdraw your retirement savings now, you’ll 

lose principal and interest and you may lose tax 

benefits or have to pay withdrawal penalties. If you 

change jobs, leave your savings invested in your 

current retirement plan, or roll them over to an IRA 

or your new employer’s plan.

7. Ask your employer to start a plan

If your employer doesn’t offer a retirement plan, 

suggest that it start one. There are a number of 

retirement saving plan options available. Your 

employer may be able to set up a simplified plan 

that can help both you and your employer.

For more information, request a copy of Choosing 

a Retirement Solution for Your Small Business. 

(See back panel for more information.)
8. Put money into an Individual Retirement 

Account

You can put up to $5,500 a year into an Individual 

Retirement Account (IRA); you can contribute even 

more if you are 50 or older. You can also start with 

much less. IRAs also provide tax advantages.

When you open an IRA, you have two options – a 

traditional IRA or a Roth IRA. The tax treatment 

of your contributions and withdrawals will depend 

on which option you select. Also, the after-tax value 

of your withdrawal will depend on inflation and the 

type of IRA you choose. IRAs can provide an easy 

way to save. You can set it up so that an amount is 

automatically deducted from your checking or savings 

account and deposited in the IRA.

9. Find out about your Social Security 

benefits

Social Security pays benefits that are on average 

equal to about 40 percent of what you earned 

before retirement. You may be able to estimate 

your benefit by using the retirement estimator 

on the Social Security Administration’s Website, 

www.socialsecurity.gov. For more information, 

visit their Website or call 1-800-772-1213.

10. Ask Questions

While these tips are meant to point you in the right 

direction, you’ll need more information. Read our 

publications listed on the back panel. Talk to your 

employer, your bank, your union, or a financial 

adviser. Ask questions and make sure you understand 

the answers. Get practical advice and act now.
For More Information:

Visit the Employee Benefits Security Administration’s 

Website at dol.gov/agencies/ebsa to view the 

following publications:

• Savings Fitness: A Guide to Your Money and Your

Financial Future

• Taking the Mystery Out Of Retirement Planning

• What You Should Know About Your Retirement

Plan

• Filing a Claim for Your Retirement Benefits

• Women and Retirement Savings

• Retirement Toolkit

• Choosing a Retirement Solution for Your Small

Business

To order copies, contact EBSA electronically 

at askebsa.dol.gov or by calling toll free

1-866-444-3272.

The following Websites can also be helpful:

AARP

www.aarp.org

American Savings Education Council

choosetosave.org/asec

Certified Financial Planner Board of Standards

LetsMakeAPlan.org

Consumer Federation of America

consumerfed.org

The Actuarial Foundation

actuarialfoundation.org

U.S. Department of the Treasury

irs.gov/retirement

U.S. Securities and Exchange Commission

investor.gov

EMPLOYEE BENEFITS SECURITY ADMINISTRATION

UNITED STATES DEPARTMENT OF LABOR

September 2017