Retirement Planning: Never too Early to Plan Ahead

January 11, 2011 Updated: September 18, 2014

Retirement planning, infinitely dull or top of the New Year resolutions? It’s never too early to start to plan for retirement, according to the Social Security Administration.

The agency helps workers to plan ahead. Anyone who pays into Social Security gets an annual statement about three months before each birthday. The statement gives a lifelong portrait of earned income, and estimates what benefits a person could expect, based on different retirement ages.

Retirement planning is about much more than Social Security, of course. The federal program was intended to keep elderly people from poverty, not to provide for all their financial needs. The essential components are savings, investments, and pensions.

The earlier a person starts saving, the better. To develop a habit of saving and avoiding debt is one of the strongest choices a person can make for a comfortable old age. Even a person who is already retired would be wise to save a portion of his income.

Once a worker has saved enough for an emergency fund, it is time to begin investing.

For investments, diversifying one’s portfolio is essential. No one should depend on a single stock, or even on a single type of investment. While stocks have performed well over the long term, they can be volatile in the short term. As a person nears retirement, it is wise to reduce the percentage of investments allocated to stocks.

AARP is a rich source of information about retirement planning. It has charts, calculators, and advice.

A retiree generally needs about 70 percent of pre-retirement income to live well, according to the AARP.

The organization recently published an article about pension detectives, who will track down nearly forgotten pensions a person might have earned. Funded by the U.S. Administration on Aging, the detectives can be found through local councils on aging.

For tools and calculators about retirement planning, please visit: