How Should I Plan for Retirement? – A Smart Checklist

Planning for retirement is essential to safeguard your financial future and to ensure you have the retirement and lifestyle you worked hard for. A well-structured retirement plan can help to:

• Create a stable income and rely less on Social Security
• Reduce financial stress
• Ensure you can maintain your desired lifestyle
• Cover future healthcare expenses
• Leave a legacy for loved ones or causes you care about

 I Regularly Contribute a Percentage of Each Paycheck to My Savings

Low and Slow Strategy

Along with putting money away when you can, $10 here, $100 there, it helps to contribute to your savings using what is called dollar-cost averaging. Each paycheck, a set amount of money is transferred to your brokerage account which you can then invest. This is done consistently regardless of how the market might be performing because your goal is long-term growth, not short-term gains. 

The idea is to invest over an extended period in low-risk investments such as mutual funds, index funds, high-yield savings accounts, money markets, treasury bills and established dividend-paying companies, such as dividend aristocrats. Dividend aristocrats are companies that have increased their dividends each year for 25 years or longer. As of 2025, there are 60 dividend aristocrat companies within the S&P 500 index. Some examples include 3M, AT&T and Exxon Mobile.

The idea of long-term saving and growth is to be patient. You can take inspiration and learn from those who have benefitted from similar strategies. 

 I Participate in My Employee Stock Purchase Program

Employee Stock Purchase Plans (ESPPs) offer employees the chance to buy company stock, generally at a discounted price by way of payroll deductions. For an individual who isn’t a regular investor or may be uncomfortable investing due to volatility in the stock market on their own, if you work for a public company and they offer this benefit, you may want to participate. Consider the pros and cons of this decision carefully.

Pros

• Discounted Stock Price: Companies often offer a discount on the stock price, usually ranging from 5% to 15%.
• Convenience: Once you sign up, payroll deductions automatically purchase the stock for you during specific buy windows.
• Flexibility: You can increase your buy amount (there is usually a ceiling to how much you can contribute per month such as $100- $300) or withdraw at various points giving you flexibility over your decision-making.
• Tax Advantages (Qualified ESPPs): If the ESPP is qualified and certain holding periods are met, employees may be eligible for preferential tax treatment, paying lower long-term capital gains rates on a portion of their profits.
• Building a Retirement Nest Egg: Money going automatically into your ESPP is money out of sight and out of mind.

Cons

• Reduced Take-Home Pay: Your payroll deduction may reduce your disposable income.
• Market Risk: There is always risk when it comes to investing. There is no way to predict market volatility or how unforeseen events may impact it. There is no guarantee of any profit with any type of investment strategy.
• Concentration Risk: Heavily investing in one company can lead to vulnerability to company-related risks.
• Tax Consequences: Just as there are tax advantages to an ESPP, there may also be tax implications due to the complexity of the tax code. Meeting a financial consultant and careful planning is critical before making any financial decisions.

 I Have One or More Retirement Accounts

A good benchmark to start with when planning your retirement saving strategy is determining how much money you may need to consider retirement an option. Because everybody lives a unique life with their own goals, there is no one set figure. However, you can get a ballpark figure by analyzing averages. 

Estimating How Much You’ll Need

According to the National Library of Medicine, the average man who retires at 65 will live another 18.3 years and 20.4 years for women. However, everyone is different based on lifestyle, genetics and luck.

In a survey by Consumer Finances, the average retirement savings for all families is around $334,000. The median number is far less at $87,000.

It is recommended you save around 10%-15% of your pre-tax income for retirement . This number includes employer-matching contributions if you have a retirement plan through work. If your job offers it, and you haven’t already, it is highly recommended that you take full advantage of this opportunity.

If you have been participating in a 401k program, stay with it. Even if reaching that 10%-15% mark feels daunting, consider increasing your contribution by 1% each year. 

Contribution Limits

401k

For traditional and Roth 401(k)s contributions limits for 2025 are $23,500 for individuals under age 50, and $31,000 for those age 50 and up.

IRA

Traditional and Roth IRAs have contribution limits in 2025 is $7,000 for individuals age 50 and under and $8,000 for those 50 and over.

Employer Matching Opportunity

Also, ensure you are getting the most out of the employer matching option if they offer it. The combined employee and employer contribution for a 401(k) is $70,000 for those under age 50, increasing to $77,500 for those age 50 and older. Individuals aged 60-63 can contribute up to $81,250 due to catch-up contributions.

Retirement Planning Calculator

Try our Retirement Planning Calculator to estimate how much you need to save to work toward your retirement goals.

 I Have Paid Off My Debt

Carrying debt, especially “bad” debt is a significant burden for anyone but could prove to be a particularly stressful and unwanted obstacle for someone nearing or entering retirement. Make it a point to work to pay off your debt as soon as you can. There are strategies that may be able to help you with this challenge.

• Debt Avalanche: A repayment strategy in which you focus on paying off debts with the highest interest rates first which helps to save money in interest.
• Debt Snowball: A debt-reduction strategy in which you pay off the smallest of your loans as quickly as possible, building psychological momentum. Once that debt is knocked out, you take the money you were putting toward that payment and start paying off the next smallest and so forth until all the debt is paid off.
• Debt Consolidation: A financial strategy that combines multiple debts into a single new loan or credit account with the goal of lowering interest rates and reducing the payment burden. Work with a financial professional to help you carefully consider this approach. It usually requires your credit to take a significant hit as you will stop paying the monthly payment while a third party works with your creditors to establish a new payment structure.

I Have a Diversified Portfolio to Weather Market Ups and Downs

Having a diversified, low-risk portfolio that can outpace inflation and help combat inflation-eroding purchasing power may help to lessen the stress of watching your money fluctuate or the impact of a short-term volatile market. However, there is always the chance of experiencing a loss and no guarantees of any profit. With that said, historically, low-risk, diversified investments have proven to be beneficial in preserving and growing capital.

I have these accounts: 

• 401k
• Traditional IRA
• Roth IRA
• Real Estate
• Stocks, Bonds, Mutual Funds
• Money Market, Certificate and Lower-Risk Investments
• Collectibles (Art, Wine, Gold)
• Cash (Treasury Bills)

Depending on your investing strategy and time, you may even consider simplifying your portfolio with the help of a financial consultant.

 I Have Signed up for Medigap or Medicare

Health care can be a budget-buster. Make sure you’re covered. If you are 65 or older, you will apply for Medicare coverage. If you plan to retire early, you will most likely look for supplemental insurance to cover you until you are eligible to apply for Medicare. 

In 2025, the average monthly premium for Medicare Supplement Insurance (Medigap) is estimated to be approximately $150. However, the cost can vary widely depending on factors such as age, sex, location of where you live and tobacco use. Depending on your financial situation or health conditions, some plans like Plan A, are less expensive with less coverage; whereas, a more comprehensive plan like Plan G, could have higher premiums.

 I Have a Strategy for Managing Tax Responsibilities

Retirement Account Distributions

• Traditional 401ks and IRAs: Withdrawals from pre-tax retirement accounts get taxed as ordinary income.
• Required Minimum Distributions (RMDs): Once you hit age 73 (as of 2025), you must begin taking RMDs from traditional 401(k) and IRA accounts. These distributions are taxed as ordinary income.
• Annuities: Whatever portion of annuity payments that constitute earnings is typically taxed as ordinary income, unless the annuity was purchased with after-tax dollars.
• Pensions: Pensions are generally taxable as ordinary income.

Investment Income

• Capital Gains: If you sell assets such as stocks, other securities, or real estate, and they were held for over a year, the profits are taxed at long-term capital gains rates.
• Dividends: Qualified dividends are taxed at lower-long-term capital gains rates, while non-qualified dividends are taxed as ordinary income.
• Interest Income: Interest earned on bonds, savings accounts, and other investments is generally taxed as ordinary income.

Social Security Benefits

• A portion of your Social Security benefits could be taxable based on your income.
• Up to 85% of your Social Security benefits could be subject to federal income tax.

Other Income

• Part-Time Work/Side Gig: If you continue working retirement, your earnings will be taxed as ordinary income.
• Rental Income: Earnings from rental properties is taxed as ordinary income.

Other Tax Considerations

• State Income Taxes: Several states tax retirement income; however, in some circumstances individuals can get exemptions or no income tax at all.

 I Have Prepared a Retirement Budget

Having a budget in retirement is essential to being able to maintain the kind of life you want to live without running out of money.

Mandatory Expenses

• Bills (Electric, water, trash pickup, mortgage/rent, medical, car payment, gas, lawn care)
• Weekly and monthly food costs
• Transportation needs (if you don’t have a car)

Discretionary Expenses

• Hobbies and activities
• Travel
• Child’s wedding or other family related events

Emergency Fund

•    Unexpected expenses such as home repairs and medical bills

I Have Applied for Social Security Benefits

In 2025, individuals can apply for Social Security retirement benefits as early as age 62; however, the full, unreduced retirement benefit is typically available at age 67. Applying for benefits before your full retirement age typically results in a permanently reduced monthly benefit.

Delayed Retirement

In some cases, you may not want to stop working. You can continue working beyond your full retirement age, and doing so you can increase future Social Security benefits in two ways.

1. Each extra year you work adds another year of earnings to your Social Security record. Higher lifetime earnings can translate to increased benefits when you retire.
2. Your benefit will increase from the time you reach full retirement age, until you start to receive benefits, or until you reach age 70. The Social Security Administration will add 8% to your benefit for each full year if you delay receiving Social Security benefits beyond full retirement age.

Keep in mind that if you choose to keep working and you are younger than full retirement age and make more than the yearly earnings limit, the Social Security Administration may reduce your benefits using these earnings limits:

• If you are under full retirement age for the entire year, $1 is deducted from your benefit payments for every $2 you earn above the annual limit. For 2025, that limit is $23,400.
• In the year you reach full retirement age, $1 in benefits for every $3 you earn above a different limit ($62,160). This only counts earnings before the month you reach your full retirement age. Starting with the month you reach full retirement age your benefits will not be reduced no matter how much you earn.

Social Security Benefits by Age

• Earliest Eligibility Age: 62
• Full Benefit Age: 67
• Bonus for Waiting: Increase 8% annually up to age 70

 I’ve Met With a Financial Consultant

Our experienced financial consultants are here to help you craft a smart retirement strategy centered around your goals. Set up a complementary consultation with the Landmark Investment Center today. 

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Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect against loss in declining markets. (67-LPL)

Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company. (147-LPL)

The S&P 500 is a stock market index tracking the stock performance of 500 of the largest companies listed on stock exchanges in the United States. Indexes are unmanaged and cannot be invested in directly. (102-LPL)

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. (26-LPL)

This information has been provided for educational purposes only. Each individual situation will vary. For more information and answers to many questions about Social Security benefits, go to ssa.gov.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This material was prepared by LPL Marketing Solutions and Landmark Investment Center.

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