Planning for Retirement: Early Steps You Need to Take

Creating a retirement spending plan is the highest-impact move a pre-retiree can make. Focusing on withdrawal rates, withdrawal order, and the tax implications of withdrawals can help retirement plans work through unpredictable markets.

For retirees, market performance is out of their control. A spending plan is controllable. A spending plan accounts for best and worst case scenarios, so retirees are prepared for whatever the market throws at them. Some retirees choose to make their spending plan flexible by taking higher withdrawals when the market performs well and lower withdrawals during down markets.

Spending in retirement is not static. Discretionary spending is typically higher in the early years, while healthcare expenses creep into the later years. For retirees with multiple account types (Tax-Deferred, Taxable, and Roth), sequencing withdrawals in line with spending habits can mitigate taxes and reduce the future burden of RMDs.

A retiree with no spending plan runs two risks. Running out of money from taking too much, or dying with un-lived experiences by taking too little.

The biggest piece of advice I would give is simple. Do something. Waiting for the perfect time or the perfect plan is one of the most common mistakes. Even setting aside a small amount consistently can meaningfully change outcomes over time because it builds the habit and lets compounding start working for you.

For many people, working with a CFP professional early on can also be valuable. A good planner can help you put structure around your goals, avoid obvious missteps, and keep you moving forward even if the plan changes over time. Early progress matters far more than early perfection.

The most important part of the retirement equation is not a spreadsheet, its actually YOU. What does your ideal day look like in retirement? Does it inspire you? You have to figure out the lifestyle you strive to attain, then look at the price tag.

Once you understand the potential annual cost, multiply it by 25. This is the ballpark amount you’ll need to conservatively sustain the lifestyle of your dreams. If you’re within striking distance of that number, find a professional to do a deep dive and stress test.

If you aren’t excited about the next phase, what’s the point? I’d rather go to sleep tonight actually looking forward to what’s coming next.

What you should actually think about in the first few years of retirement planning is simple. Get your pension started and claim the full employer match.

It’s the one people in their mid-twenties and thirties often ignore because retirement feels like a million years away. That’s the mistake I see the most and the thing that’s hardest to fix. Just an extra 1% from you can trigger a full match from your boss and that can earn its own compound growth for years to come. I once had a client who in her early thirties reduced her spending and pumped up her pension contributions by £40 a month, and when she turned 45 that one simple action had grown her pot by more than £30,000 because time did the work.

Second up, get your insurance. This is supposed to be the one you never forget to do and you certainly don’t want to. If you can’t work then your pension contributions fizzle out and you’re eating away at your savings. Get your match, your cover, and then everything else.

Having spent over 16 years leading retirement communities like Stuarts Draft and The Village at Mint Spring, I’ve seen that the most successful transitions focus on lifestyle design rather than just financial figures. My background in operations and marketing taught me that true quality of life comes from anticipating your future needs before they become urgent stressors.

My core advice is to audit the “hidden costs” of homeownership—not just the property taxes, but the time and energy spent on lawn care, snow removal, and repairs. In the early stages, prioritize stewardship by choosing a living environment that offloads these burdens, allowing you to invest your energy back into your relationships and health.

For example, we integrate maintenance-free duplexes with onsite care partners like Visiting Angels to ensure residents aren’t caught off guard by changing health or home needs. This shift to a service-oriented model, including shuttle services and community programming, transforms your home from a chore into a backdrop for meaningful connection.

Review your life insurance policies before you retire — not after. Most people buy life insurance to protect their family during their working years, but by the time they reach retirement, the policy has often outlived its original purpose. The kids are grown, the mortgage is paid off, and now you’re stuck paying premiums on something you no longer need. What most people don’t realize is that you have a third option beyond keeping it or surrendering it to the insurance company for a fraction of its value. Through a life settlement, you can sell that policy on the secondary market for significantly more than the cash surrender value — sometimes four to eight times more. I’ve worked with seniors who were about to let a policy lapse, not knowing it was worth six figures. That money could fund years of retirement. So my advice for anyone in the early stages of planning: take inventory of every policy you own, understand what each one is actually worth on the open market, and factor that into your retirement picture. Most people are sitting on an asset they don’t even know they have.

After three decades working with vulnerable populations—seniors aging in place, formerly homeless individuals, veterans transitioning to stability—I’ve watched housing insecurity derail people who never planned for it. The single most important thing you can do early is treat stable housing as the foundation of your entire retirement plan, not an afterthought.

At LifeSTEPS, we work with residents across hundreds of affordable communities, and the ones who struggle most in later life are those who let housing costs become unpredictable. Lock in your long-term housing situation as early as possible—whether that’s paying down a mortgage aggressively or understanding what subsidized senior housing options exist in your area before you need them.

The people I’ve seen retire with the most peace of mind didn’t necessarily have the most money—they had the least exposure to sudden, uncontrollable costs. Housing stability is that lever. Everything else—healthcare, food, community—gets harder the moment your roof becomes uncertain.

The best early-stage retirement move is getting your “personal balance sheet” right: know what you own, what you owe, and what your monthly burn is before you start picking investments. In my world (real estate + private deals), the people who win long-term aren’t the ones chasing the hottest return—they’re the ones who can survive bad years because their liabilities don’t control them.

One practical rule I use from underwriting deals: de-risk the downside first. If you have any high-interest debt, that’s a guaranteed drag that usually beats whatever you *think* you’ll make in the market, and it reduces your flexibility if you lose income or have a big expense.

A case study from my background: in real estate development and bridge financing, projects blow up less from “bad ideas” and more from cash timing mismatches. Retirement is the same—build a cash buffer and a clear monthly plan so you’re never forced to sell investments at the wrong time.

In the early stages, focus on increasing your savings rate and keeping fixed costs low (housing, cars, recurring payments). That’s the closest thing to a cheat code I’ve seen across everything from family office oversight to middle-market investing.

My advice to someone starting is just go totally eliminate human willpower completely with absolute automation. The only thing you want to focus on early on is getting yourself set up so that money transfers from your paycheck into your retirement accounts before ever hitting your main checking account. Because if you’re counting on discipline to save whatever’s left over at the end of the month you’ll continually fail. If you get paid on the 1st, automate those contributions, on the very same day you get paid, and you structurally engineer your financial life so that building wealth happens passively, invisibly.

One thing that surprises many people early in retirement planning is how powerful income growth becomes over time. We see many professionals spend months studying investment options while overlooking the earning engine that funds those investments. In the early years the biggest lever is usually career growth and skill expansion. When income grows steadily, saving becomes natural rather than restrictive.

We learned this lesson while advising founders who built strong businesses but delayed structured saving habits. Once their income stabilized, even modest automated investments began compounding quickly. The key is to start contributing early while continuing to improve earning power. A growing income paired with consistent investing creates remarkable long term momentum.

One piece of advice I would give is to think of retirement not as a time to slow down, but as a stage of life where staying gently active becomes even more important.

Most people focus on finances early on, but what often gets overlooked is how they will actually live day to day. The real quality of retirement comes down to whether you can move comfortably, stay independent, and continue doing the things you enjoy.

In my work with the Feldenkrais Method, I’ve seen many retirees who assumed it was “too late” to improve. Some were never very active to begin with. Yet through small, guided movements and learning how to use their bodies more efficiently, they began to feel real changes. One student in her 70s told me she could get up from the floor for the first time in years without fear. Another found that walking became lighter and less tiring, even though she hadn’t exercised regularly before.

What makes this approach different is that it focuses on reeducating the nervous system, not pushing the body harder. That means it’s accessible even if you’re starting from stiffness, pain, or years of inactivity.

So in the early stages of planning for retirement, I would focus on building a habit of gentle, consistent movement and awareness. It doesn’t have to be intense or time-consuming, but it does need to be regular. Maintaining mobility, balance, and ease of movement is what allows people to stay independent and truly enjoy this phase of life, regardless of where they’re starting from.

A critical piece of advice for early retirement planning is to watch out for a phenomenon referred to as “lifestyle creep”. As your career is successful and your salary increases, it is very common to take that salary increase and immediately raise the baseline level of your living standard.

The key thing in the beginning phase is to force yourself to maintain your current baseline expense level as your income rises. When you’re receiving a year-end raise or a performance bonus, the best practice is to set up to automatically have a large share of your new annual cash flow automatically invested into your retirement accounts. This way, your daily expense level doesn’t drift higher than it is; instead you can allow your increased expenses to grow only from additional earning power, rather than rising alongside that increased earning power. The difference between your earnings and expenses is the engine of your ability to steadily increase your savings over time.

It is important to build an emergency buffer alongside retirement savings. Early in a career, one unexpected expense can force a pause in contributions or lead to high-interest debt. Having a cash reserve for three to six months helps protect a retirement plan from being derailed by life’s normal events. This buffer provides peace of mind and ensures consistent savings.

The same idea applies to personal finance. Set up two automatic transfers on payday: one for retirement and one for an emergency fund. Keep the emergency fund simple and accessible. Once the buffer is funded, redirect that second transfer into retirement savings, maintaining consistency rather than trying to time the market.

My single piece of advice is to start early and automate your retirement contributions so saving becomes a habit. For example, investing $100 per week, about $5,200 a year, from your twenties and staying invested can grow substantially over decades. Focus first on capturing any employer 401(k) match and on tax-advantaged accounts like Roth IRAs when appropriate. At the same time, build a small emergency savings fund so you do not need to withdraw from long-term accounts. Use automated deposits into diversified index funds or target-date funds to avoid timing the market. In your twenties favor a higher equity allocation, roughly 70 to 90 percent, and then gradually shift toward bonds as you age.

Consciously follow a strategy of dollar-cost averaging and to make a concerted effort to tune out daily volatility of financial news. The only thing that early-stage new investors need to focus on is consistency, pure and simple. The stock market will experience many corrections, downturns, and bull markets over a 30-year period, and trying to time it out of the market by skipping out on putting the funds into the market during downturns too often will result in missing the subsequent up days as well. By investing the exact same dollar amount each and every month regardless of headlines about the economy, you are automatically buying more shares when prices are low and fewer shares when they are high, and this mathematic averaging out of the market causes a smoothing out of the average cost basis.

The most important thing in the early stages is simply to start as soon as you can. It sounds simple, but the later you begin saving for retirement, the higher your monthly contributions will likely need to be to maintain your costs after you retire. Focus on saving an amount that is realistic based on your income level, and as your income grows, aim to increase your contributions over time.

I have spent 25 years as a family law litigator in Orange County, managing the division of complex assets and high-value retirement accounts. My most critical advice for the early stages of retirement planning is to focus on the legal characterization of your contributions, specifically distinguishing between separate and community property.

In my experience, many people lose half of their nest egg during a divorce because they commingled pre-marital funds with marital earnings without a clear paper trail. I’ve seen cases where the lack of early documentation turned a solid retirement plan into a litigated nightmare during the asset division process.

You should utilize a Prenuptial Agreement as a foundational tool to ring-fence your early contributions and any future growth on those specific assets. This personalized legal strategy is as essential as the investments themselves for guaranteeing that the retirement you are building remains yours.

As CEO of Saga Infrastructure, I’ve guided dozens of construction firm owners through retirement via acquisitions that preserve their legacies—I’ve seen what works for sustainable exits.

My top advice: Build scalable operations and leadership early, so your business runs without you. Focus on aligning teams, systems, and strategy to create resilience.

Take RBC Utilities: Owner Bill Cummings stayed involved for 12 months post-acquisition, ensuring smooth handover while unlocking national resources—no layoffs, culture intact.

In early stages, document your processes and groom successors like we do at Saga; it turns retirement into a legacy win, not a scramble.

It is essential to master the differences between pre-tax and post-tax retirement accounts. The critical focus at this stage, when you are probably still in one of the low end tax brackets you will be in during your working life, is weighing up whether a Roth IRA or Roth 401(k) is a good choice for you. Once you choose to pay taxes on your contribution (at your current lower rate) all decades of compound interest growth (and subsequent withdrawal of retirement account money in retirement itself) will be tax-free. Getting the right match, between your retirement contribution and current and expected future tax rates is a simple approach that can save a fortune over the entire lifetime of your investments.

My top piece of advice is to stress-test your retirement plan by evaluating how much you will rely on Social Security and modeling potential benefit reductions. Early on, focus on calculating the share of your retirement income that will come from Social Security using the SSA’s tools and listing guaranteed income sources like pensions and annuities. Subtract those guaranteed amounts from your projected monthly expenses to identify any shortfalls you will need to cover with savings. Run scenarios that include a 20 to 30 percent reduction in benefits to see how resilient your plan is, and use calculators from Fidelity, Vanguard, or Personal Capital to assist with the modeling.