How to plan for retirement

When you start to plan for retirement, you must consider what your funding sources will be. Social Security and your company pension won’t be enough. In addition to considering 401(k)s, IRAs, and 403(b)s, here are four steps you can take to help you figure out how to plan for retirement:

  1. Budget for expenses by determining how much money you'll need for retirement
  2. Get started by understanding the different ways to save
  3. Grow your savings by investing your retirement assets over time
  4. Stretch your retirement income after you have retired

How much money will I need for retirement?

Retirement planning expenses

Not only do you have to undergo retirement income planning (how you’ll pay for your retirement), but you also must figure out what your expenses are likely to be in retirement. Plan now to avoid sudden surprises by creating a retirement budget. Also consider saving for retirement.

Health care and long-term care costs

The longer you live, the more likely it is that your health care costs will increase. Later, you’ll be glad you had the foresight to take these expenses into account.

Types of retirement accounts

When it comes to retirement accounts, you can choose among such vehicles as:

  • 401(k)s
  • Individual retirement accounts (IRAs)
  • 403(b) savings plans

Here are some of the pros and cons offered by each of these:


  • High contribution limits
  • Eligible for income tax deduction
  • Deferred taxes
  • Your contributions are often matched by your employer
  • You can make emergency withdrawals
  • Limited choice of investment vehicles
  • IRA deductibles excluded
  • Withdrawals are taxable income
  • Withdrawals required at age 70 ½
  • Waiting period before creating one with an employer

Individual retirement accounts (IRAs)

  • Tax-deferred
  • Easy to create
  • More investing options
  • More flexible allocation
  • Tax deductible
  • Contribution limit
  • Penalties for early withdrawal
  • Withdrawals required at age 70 1/2

403(b) savings plans

  • Reduces your taxable income
  • You may be eligible for a tax credit based on deferred income placed in your account
  • You can grow the sum through targeted investments. No taxes on growth until withdrawal


  • Eligible only for government employees, public school teachers and employees of nonprofits or other tax-exempt organizations
  • Limited choice of investment vehicles
  • Tend to invest in annuities
  • Penalties for early withdrawal
  • Contribution limit
  • Withdrawals required at age of 70 ½
  • Restrictions on beneficiary designation


Does your employer offer a 401(k) retirement savings plan? As you start your retirement planning, read about what differentiates these plans and how enrolling can help you reach your savings goals.

Also consider how to handle your 401(k).

Individual retirement accounts

Looking to save for retirement without the help of an employer? Learn more about how individual retirement accounts (IRAs) work.

403(b) savings plans

403(b) savings plans are offered to employees of schools, hospitals, nonprofits and churches that have a significant impact on the communities they serve. They often focus on smart beta, factor investingsustainable investing and ESG (Environmental, Social and Governance) strategies.

How do I manage my retirement investments?

Retirement investing strategies & portfolios

Investing for retirement can help you grow your savings. As you formulate your retirement plan, keep in mind that your investment needs will likely change in the future; for example, you may want to take less risk down the road. Explore which retirement portfolio option might work for you.

Target date funds

Target date funds can help take the guesswork out of investing as you consider how to plan for retirement. Learn how they work and how they can help you reach your retirement savings goals.

How can I make the most out of my retirement income?

There are many ways to maximize the value of your retirement income, from Social Security to company pensions to withdrawing from your savings at the right time.

Social security
Social Security
When can I claim? How do I claim? We cover these questions - and more.
Retirement withdrawals
Retirement withdrawals
The name of the game: Don't outlive your savings. We take you through some commonly-used strategies for withdrawing your funds.
Estimate spending potential
Estimate spending potential
As you consider your income needs in retirement, the LifePath® Spending Tool can help estimate potential retirement spending.

Annuities are another way to save. Some provide fixed payouts throughout retirement. Learn how they work, as well as some potential pros and cons.

How can I protect my retirement account?

Planning for retirement can be a cause for worry. Retirement concerns, like income risks and tax implications, can keep us up at night.  You can gain peace of mind by understanding these issues and planning for them. This is where professional advice can help. A financial professional can help answer any questions you may have.