Retirement planning tips for any stage of your career

Man-Young Working Cropped

April is National Financial Literacy Month, and we at Covenant Trust Company want to encourage healthy financial practices for people of all ages. With that in mind, here are some helpful tips for you, whether you’re just starting your career, nearing the end, or are already enjoying retirement.

New employee

Whether you’re starting your first job or beginning your career, it’s important to save for retirement. It may be a long ways away, but that’s something to use to your advantage; the earlier you invest, the more time compound interest has to help your investments grow.

If your employer offers a retirement plan, be sure to contribute to it. If they offer a match, make sure you contribute as much as you can to maximize the match. If your employer doesn’t have a retirement plan (or even if they do!), you can open an IRA and make up to $5,500 in contributions in 2013. 

Nearing retirement

Do you know what you want your retirement to look like? You don’t need to know the exact details, but you should have a general plan and an estimate of how much money you’ll need during retirement.

General guidelines suggest spending 4% of your retirement funds on an annual basis. Will you be able to afford retirement at that rate? If you’re not sure, consider adjusting your financial plan and get more aggressive in saving!


As you saved for retirement, you may have used a handful of different retirement vehicles resulting in a collection of taxable, tax-deferred, and tax-free accounts. Knowing the tax status of your investments can help you strategize your withdrawals and make the most out of your retirement funds.

Always withdraw money from any account with a Required Minimum Distribution (RMD) first, such as a Traditional IRA. There is a hefty fine for not taking your RMD, so be sure to make this withdrawal when you are legally obligated to do so.

Generally, after your RMD, you should withdraw from your taxable accounts, then tax-deferred, and lastly, your tax-free accounts. Doing so can potentially produce the smallest tax bill, allow for more tax-deferred growth, and extend the life of your retirement portfolio.

Do you have a retirement plan?

Saving for retirement is great; having a plan is better. What do you want to do during your retirement? How much money will you need to do it? How do you plan on saving that much money? Figuring out your answers might seem like a daunting task, but having answers sooner can make reaching your goals easier.

So what are your retirement goals? Do you have any questions about getting there?

2 thoughts on “Retirement planning tips for any stage of your career

  1. Whether you are just starting a career or your retirement is on track, some tips are really helpful. It is important to set the retirement goals because they will help to make the financial decisions as you get older.

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