Retirement may seem like an abstract, far-off goal (unless you’re already independently wealthy or a 401(k) ninja, in which case—respect). But you’ll never drink mai tais on the beach in your seventies unless you start saving money now.


Retirement is expensive. Your costs in retirement will probably include:

  • Housing.
  • Health care.
  • Food.
  • Taxes.
  • Leisure.


Your income and assets in retirement may include:

  • Investment and savings accounts—including what you’ve saved in retirement accounts.
  • Social Security—which is paid by the government.
  • Traditional pension—if you worked for an employer that provides one.
  • Your house—if you own your home.

What You Can Do

Paying into Social Security generally happens automatically when you work. Unfortunately, you probably don’t have any control over whether your employer offers a traditional pension.

The main thing you can do to plan for your retirement is to save—particularly in a tax-advantaged retirement account where your money can grow. The main types of accounts include:

  • 401(k)s—tax-deferred accounts offered by many employers. (Employees of nonprofits and public-school systems may have 403(b)s instead.)
  • Individual Retirement Accounts (IRAs)—tax-deferred accounts you can open on your own, with a financial institution.
  • Roth 401(k)s and Roth IRAs—accounts similar to their non-Roth counterparts, but which let you contribute after-tax dollars and take withdrawals tax-free in retirement.


Saving enough for retirement takes some planning and effort. Many experts recommend that you:

  • Start ASAP, such as with your first job that offers a retirement savings plan. (Or, open an IRA on your own.)
  • Try to save 15% of your annual income each year while you’re working.
  • Invest heavily in stocks while you’re young, since they generally grow your money faster over the long term.
  • Invest enough in your 401(k) or other workplace plan to capture the full amount of any match your employer offers.

Fun Facts

Why do retirees love Florida so much? It’s not just the sunshine and beaches—it’s also one of the seven states with no personal income tax.

The country with the youngest retirement age is the United Arab Emirates, where citizens become eligible for pensions and retirement benefits at forty-nine (expats have to wait until they’re sixty-five).

Key Takeaways

  • Retirement is expensive, so you need to start saving for it while you’re young.
  • Tax-advantaged retirement accounts, such as 401(k)s and IRAs, are the best retirement savings options for many people.
  • Saving 15% of your income and investing heavily in stocks while you’re young can help you get there.

“Retirement is like a long vacation in Las Vegas. The goal is to enjoy it to the fullest, but not so fully that you run out of money.”

From NAPKIN FINANCE: Build Your Wealth in 30 Seconds or Less by Tina Hay. Published with permission from Dey Street Books. Copyright Tina Hay 2019.

Follow us here and subscribe here for all the latest news on how you can keep Thriving.

Stay up to date or catch-up on all our podcasts with Arianna Huffington here.