STUDIO CITY ( — Mary Hunt, author of The Smart Woman’s Guide to Planning for Retirement, visited the KCAL9 studios Monday to discuss guidelines and benchmarks for each decade of life as it relates to preparing for retirement.

In Your Twenties

Develop your financial intelligence

Start by becoming an effective money manager (chaps. 4 and 5). Get your act together now by putting together a spending plan. That is the best way to take control of your finances. Assign every dollar that flows into your life a job to do, then follow up to make sure it did as it was told.

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 5 percent of your annual income to retirement savings. For example, if you are contributing 3 percent to get the match at work, make sure you are funding your Roth IRA with an additional 2 percent. And don’t forget to adjust those deposits as you receive salary increases, even if the amounts feel so minuscule to be insignificant. That’s the point! Start small and the impact is far less, well, impactful!

In Your Thirties

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 to do this so you won’t have to rely on your memory or make that “Will I or won’t I?” decision every time you get a paycheck. 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.

Lots of things are going to compete for your savings and 401(k) contributions. Your career by now is on course, and perhaps you are ready to start a family or buy a house. You and your spouse are sure to experience lifestyle “creep” as you feel it’s time to add things to your life. A new car or two, new furniture, and much-deserved vacations will challenge your determination to live an understated lifestyle. Your biggest challenge is to hold the reins on your spending.

Build your Contingency Fund and get out of debt

Your Contingency Fund should be your first priority for all the reasons outlined in chapter 6. Unfortunately, you don’t have time to devote your attention to just one area at a time. So at the same time you are saving for emergencies, you must pay o% your unsecured debt (chap. 7). Once you are free of debt, you’re ready to devote 10 percent of your annual income to some combination of a 401(k), Roth IRA, and personal investing.

Your thirties matter because these are the years that you’ll make the big financial decisions of life—kids, house, and career. This is the busy decade, and with all of the joy and high-speed living that comes with raising a family, it’s easy to lose sight of planning for the future. I know how easy it is to assume there will be plenty of time for that later.

If you’re nearing the end of your thirties and have to admit you’ve not begun to prepare for retirement, don’t despair. But understand that you need to get started right away. Your first step is to drastically reduce your expenses to free up money to catch up.

In Your Forties

Make retirement savings your main goal

This may sound counterintuitive when your kids are getting older and college for them is much closer than retirement for you. But beware of that trap. Make sure you are on track to secure your retirement before funding college accounts or (gasp!) taking out parental college loans. Do not gut your own future to ensure theirs.


If your savings have grown beyond what you’ve needed to cover emergencies, you have a decent cash nest egg. It’s time to aggressively build an index fund portfolio.

If you’re feeling way behind due to what life has thrown at you over the past decades, it may be time for a serious look at your lifestyle to find all the places that money is leaking out of your life. By plugging those leaks, you will free up money to put into your emergency fund, pay o% your debts, and fund your retirement savings. You still have years to work hard, but they are ticking o% fast. Don’t waste another day assuming things will just magically turn out okay. No one can promise you that.

In Your Fifties

Play catch-up

If you are behind and if you qualify, consider taking advantage of the IRS catch-up contributions. Once you’re fifty or over, you can contribute thousands more to your 401(k) plan than your younger colleagues. In 2012, you could have contributed an additional $5,500 over the annual limit of $17,000 for a total of $22,500.

Meet with a financial and estate planner

Now that you have amassed a sizable amount in your retirement account, savings account, and investment portfolio, you should consider meeting with a fee-only planner who can look at what you have and make strategic recommendations.

In Your Sixties

Zero in on living expenses

It’s time to assess, or reassess, your retirement income needs to see if they are in alignment with the sources of income you’ll have available in retirement. One rule of thumb is that once you retire you are going to need about 80 percent (plus more for inflation) of the amount you need to cover your lifestyle now. If you don’t know how much you need to live now, you will have no good way to project your needs in retirement. Be sure to consider inflation while you continue to find ways to spend less. Never forget that it is a lot easier to cut expenses than to increase income or create a higher return on investments. A good saver will beat a good investor every time.

Weigh your Social Security options

You are eligible to file for early benefits at age sixty-two, but your monthly check will be reduced by about 30 percent for the rest of your life. Wait until your full retirement age (sixty-five, sixty-six, or sixty-seven, depending on your birth year) for full benefits, or until seventy to receive 32 percent more each month. But wait. There’s a lot to consider before making that decisi


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