Retirement Planning

It’s never too early to start.

The sooner you start saving, the easier it will be to hit—and even exceed—your goals for retirement.

The most common goal people are planning for on the Range platform is for their retirement. People know that this is important, and often have programs through their employer to start saving. Even though people know this, according to The Fed, in 2022 only 31% of people believed they were on track with their retirement planning.

That’s not a lot of people. We’re here to help with that. Let’s start with the why.

Why should I start saving for retirement?

Aside from wanting to play a lot of golf or rollerblade, there are some legit reasons to start saving for retirement at an early age.

• Social Security will not be enough to live on. Sadly, Social Security—the government program that provides benefits to retirees—is not designed to be your sole source of income in retirement. So you’ll need to save additional money to supplement those benefits.
• You’ll live longer than you think. The average life expectancy in the United States is now over 78 years old. So if you want to retire at 65 - you’ll need at least enough runway for 13 years, and likely much longer.
• Healthcare costs are rising. Healthcare costs are rising faster than inflation. As you get older, you may need a significant amount of money to cover the costs of healthcare.

When should you start saving?

Right. Now. If you’re not already, it’s probably time to start. Even if it’s just a little each month. The earlier you start saving, the more time your money has to grow. You can thank compound interest for that. Compound interest means each year, you earn money not only on your principal, but the other interest you’ve earned.

For instance, if you have $10,000 saved at a 5% interest rate, this year you’ll earn $500. But NEXT year, you’ll earn 5% of $10,500. Each year that grows. The longer your money is invested, the more compound interest you earn. So get started early.

When saving for retirement, there are a few important factors to consider:

• Your age. The earlier you start saving, the more time your money has to grow.
• Your income. If you're living paycheck to paycheck, it may be difficult to save much money.
• Your risk tolerance. If you're young, you might be able to invest in riskier assets with the potential for higher returns.
• When do you want to retire? The average age of retirement in the US is 62.
• Your target lifestyle. Consider what kind of lifestyle you want after retirement, as it informs your savings needs.

Common retirement savings methods:

• Employer-sponsored retirement plans. Such as 401(k)s, which offer tax breaks and often matching contributions from your employer.
• Individual Retirement Accounts (IRAs). IRAs are available to anyone with earned income and offer tax breaks, but there are income limits.
• Annuities. Purchased from an insurance company for guaranteed income in retirement, though they can be complex.

Getting started with retirement savings.

It’s NEVER too early to start saving for your retirement. Here are three things you can do to get a head start.

1. Create a budget. Track your income and expenses to see where you can cut back.
2. Set financial goals. Determine how much you need to save for retirement and develop a plan.
3. Automate your savings. Set up automatic transfers from your checking account to your savings and investment accounts.

Whether you’re looking to sail around the world or settle down in the countryside, retirement is what we work our whole lives for. It’s worth the time and effort to get started early.