Financial essentials
Discover what your future retirement may look like
Time to read: 6 minutes
A look into the future
For many people December is the quintessential time to gather with family and friends to look back on the past while also looking toward the future. While finances are often top-of-mind during the holiday season, it may also be the perfect time to take a moment to assess where you are with your long-term retirement goals and contemplate what your future retirement could look like.
What does your future retirement look like?
No matter where you are in your retirement journey, there are key questions you should be asking yourself to help visualize what your retirement could look like.
Early career – what age do I hope to retire?
Whether you’re planning to retire at 62, 67 or later, having a good understanding of the age you hope to retire can give you a better idea of how much money you may need to make ends meet during retirement. When deciding on your ideal retirement age, you should consider longevity and how much time you may spend in retirement. This may affect your overall financial goals.
How much am I contributing to my retirement plan? Am I matching all my potential employer match contributions?
If it’s been a while since you’ve checked in on your retirement plan contributions,
What retirement goals do I have and what steps can I take now?
Everyone’s goals in retirement are different. Some people may hope to
At any point in your career lets make sure you are on track for your retirement goals.
If you have questions about the future of retirement, your future retirement, or on your current long-term investment strategy, we can help.
Established career – Am I on track to reach my goals? If not, how can I adjust?
If you already have goals in mind for retirement, use them to evaluate where you are with your retirement savings and if you’re on track. If you find a gap and need to adjust, you don’t have to figure it out by yourself. Consider
Do I have it in my budget to increase contributions by 1%? 2%? Or more?
Increasing your contributions by just 1-2% may have a significant impact, especially if your employer is matching your contributions. Be sure to look at your budget as a whole and decide if a small percentage can be allocated towards your retirement plan. If it’s not possible now, reevaluate periodically to see where you’re at.
What will my retirement look like?
Now that you’re more established in your career, you may have a better understanding of what you want your retirement to look like. During this time, you’ll want to establish what your goals are, your path to get there, and gain a greater understanding of
Late career – when do I plan on retiring?
If retirement is no longer feeling like a distant dream, and instead a fast-approaching goal, it’s time to assess where you’re at. It’s important to solidify your retirement timeline and the amount of money you will need to live comfortably and enjoy all of your retirement years.
Do I have a retirement strategy in place to take any required minimum distributions (RMDs)?
It’s crucial to have a plan in place to take RMDs. Federal tax rules require you withdraw from your retirement account once you reach your required beginning date (RBD) or retirement, if later.1 The RBD is April 1st of the next year based on your age and birth date.2
Age |
Birth Date |
70 1/2 |
Born before July 1, 1949 |
72 |
Born on or after July 1, 1949 or in 1950 |
73 |
Born between 1951 and 1958 |
75 |
Born in 1960 or later |
Note: If you were born in 1959, federal guidance is needed to determine if your RBD is age 73 or 75.2
Ready to create a RMD action plan? Here’s what you
What role will guaranteed income play in my retirement?
Depending on your role, you may receive guaranteed income through Social Security, pension plans or annuities like TIAA Traditional.* Consider having a mix of fixed and variable annuities to build a more
Understanding longevity — a closer look
Even if you have a general idea of what your future retirement looks like, you may be surprised to find out how long you could spend in retirement. In fact, the average retiree can expect to spend about two decades in retirement.3 That’s almost double from just 50 years ago.3 Having a strong grasp on longevity literacy, paired with a deeper understanding of your retirement goals will benefit you now and in the future.
Understanding longevity goes hand-in-hand with how much you are budgeting for your retirement. Commonly, it’s advised to budget at least 70% of your total pre-retirement income to make ends meet during retirement.4 This amount assumes that some of your employment related expenses will go away, and you will only need around 70% to 90% of your pre-retirement income to cover the essentials.4 It’s vital to understand how far your money will go in retirement and adjust based on your goals.
The cost of health care during retirement is a crucial factor to consider as well. According to the Employee Benefit Research Institute (EBRI), “A couple with particularly high prescription drug expenditures will need to have saved $413,000 to have a 90 percent chance of having enough money to cover their health care costs in retirement.”5
Knowing how far out your retirement strategy should extend and what factors to consider will help you feel confident and secure as you head toward your retirement years.
We are here to help
While it’s natural to gravitate toward asking a trusted family member, friend, or co-worker for answers to these questions, there may be a better option. If you need to unpack your retirement plan and strategize for your future, a retirement professional is a great resource to help. TIAA makes it simple to schedule a call and connect with our team of financial professionals.
Other helpful resources
Advice
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*Issued by Teachers Insurance and Annuity Association of America (TIAA), New York, NY. **Any guarantees under annuities issued by TIAA are subject to TIAA's claims-paying ability. Retirement check refers to the annuity income received in retirement. Guarantees of fixed monthly payments are only associated with TIAA's fixed annuities.
1Source: TIAA,
2Federal tax rules require that you take RMDs from any individual (non-workplace) tax-advantaged retirement plan at your RBD regardless of your employment status.
3Source: TIAA,
4Source: TIAA,
5Source: Employee Benefit Research Institute (EBRI),
This material is for informational or educational purposes only and is not fiduciary investment advice, or a securities, investment strategy, or insurance product recommendation. This material does not consider an individual’s own objectives or circumstances which should be the basis of any investment decision.