How Can I Tell If I’m On Track to Retire?

Retirement planning is much like preparing for a long journey—it requires careful planning, timely starts, and consistent effort. At Harvest Wealth Partners, we believe it’s not too soon to start saving for retirement. Beginning your savings journey now, regardless of your age, can significantly improve your ability to pursue your financial goals for the golden years of your life. Our team is dedicated to helping you determine your retirement goals and assess whether you are making adequate progress toward them.

You’ve Selected a Suitable Savings Plan

One of the first steps in staying on track for retirement is choosing a suitable savings plan. Whether it’s an employer-sponsored plan, a Traditional or Roth IRA, a SEP-IRA for the self-employed, or a Solo 401(k), selecting the right plan is crucial. It should align with your employment situation, income level, and retirement goals. At Harvest Wealth Partners, we guide our clients through the maze of options to find a better-suited fit for their individual needs.

You’re Utilizing Compound Earnings

The magic of compound earnings cannot be overstated. By reinvesting the interest you earn, you’re essentially earning interest on your interest. The key to managing your compounded earnings is to start early and make consistent contributions. Automating these contributions can help keep your savings on track without requiring constant attention. If you’re leveraging compound earnings effectively, you’re likely on a path toward your retirement objectives.

You’ve Created an IRA If Necessary

Not everyone has access to an employer-sponsored retirement plan. In such cases, opening an Individual Retirement Account (IRA) becomes essential. Whether you choose a Traditional IRA, a Roth IRA, or if you’re self-employed, a SEP-IRA or Solo 401(k), making the maximum allowable contribution each year can add to your retirement savings. If you’ve taken this step, you’re demonstrating proactive behavior in regard to your financial future.

You’re Close to Retirement Savings Milestones

Understanding whether you’re on track for retirement also involves knowing where you stand relative to retirement savings milestones. Consider how much you could have saved at various ages based on your current age, expected retirement age, and anticipated lifestyle in retirement. As a rule of thumb, planning to replace 80% of your pre-retirement income can give you a ballpark figure for your savings goal. If your savings are aligned with these milestones, you’re likely in a decent spot.

The Rule of Thumb for Retirement Savings

Aiming to replace 80% of your pre-retirement income is a widely accepted guideline. If you have a significant portion of your retirement income accounted for through savings, Social Security, and any other sources, you’re doing well. For some individuals, withdrawing 4% of their retirement portfolio annually may be feasible. This strategy helps preserve your savings throughout your retirement.

Talk to Our Financial Advisors

Determining if you’re on track to retire involves several important considerations, from selecting the right savings plan to understanding the impact of compound earnings and aligning with retirement milestones. At Harvest Wealth Partners, we’re committed to providing personalized, comprehensive financial planning to help you navigate these considerations. If you’re unsure about your retirement readiness or simply want to make the most of your savings, contact us today.