Many financial professionals will, for a fee, help you navigate your way to and through retirement. However, using a financial advisor isn't mandatory.

If you can't afford or don't trust an advisor, or would prefer not to use one for another reason, managing your retirement on your own is always an option. Just be aware that you have to♋ map out a sensible plan and be willing—and discipline💯d enough—to follow it.

Read on for some of the 𝓰basics of a do-it-yourself retirement planning s😼trategy.

Start Well Before Retirement

If you are serious about taking 澳洲幸运5官方开奖结果体彩网:retirement into your own hands, as early as possible in your working years, adopt one simple habit: 澳洲幸运5官方开奖结果体彩网:Pay yourself first. Figure out 澳洲幸运5官方开奖结果体彩网:a consistent sum of money 🦄that you can set aside for the future and be disciplined about savꦗing it regularly.

Retirement plans like 401(k)s, which take money automatically out of your paycheck, make that almost effortless. Many 401(k) platforms also make it easy to enter the percentage of income you want deducted and placed into your retirement account. Though you can often easily change your contribution amount, it's importaꦛnt to treat this expense as a current bill.

If you don't have a 401(k), you can sign up for regular automatic withdrawals that will come out of your bank account and go into an 澳洲幸运5官方开奖结果体彩网:individual🧸 retirement account (IRA).

IRA contributions can't be deducted from your paycheck since you—not your employer—manage your IRA. But this gives you even more flexibility to select when and how much money gets taken out of your bank account.

Consider a 401(k)

There are two primary retirement account options: the 401(k) and the IRA.

When you start a new job, you may have the option to sign up for the company's 401(k) plan. Or you may find that you're automatically enrolled. Just make sure that a 401(k) is at the top of your new job to-do list. The employer will manage the plan, but you contribute to it and pick the investments. Be mindful to avoid excessive fees when you invest.

Another critical move: maximize your 澳洲幸运5官方开奖结果体彩网:employer's 401(k) match—these contributions are often very worthwhile to take. For example, an employer might offer to match up to 3% of your salary. To secure the match, you'd need to contribute at least 3% ꦕof your salary to the plan.

401(k) Contribution Limits

For 2024, you can contribute up to $23,000 into a 401(k) or 澳洲幸运5官方开奖结果体彩网:Roth 401(k). For 2025, you can contribute up to $23,500. Individuals who are 50 or older can make an additional $7,500 澳洲幸运5官方开奖结果体彩网:catch-up contribution in both 2024 and 2025.

There are also contribution limits on the total amount that an employer and employee can contribute to the account together:

• In 2024, this limit is either the employee's compensation or $69,000, whichever is less.
• In 2025, this limit is either the employee's compensation or $70,000, whichever is less.

These limits do not include catch-up contributions. So your total limit in 2024 can be $76,500 ($69,000 + $7,500). In 2025, it can be $77,500 ($70,000 + $7,500).

In addition, starting in 2025, employees who are 60, 61, 62, or 63 may make a higher catch-up contribution of $11,250.

401(k) Income Limits

There is also a limit on how much of your compensation can be taken into account for determining your and your employer's contributions. The IRS limit is $345,000 for 2024 and $350,000 for 2025.

Consider an IRA

Traditional

A traditional IRA provides a 澳洲幸运5官方开奖结果体彩网:tax deduction in the years that you make contributions, meaning the contribution amount reduces your taxable income.

However, in retirement, the withdrawals (also known as 澳洲幸运5官方开奖结果体彩网:distributions) are taxable at your 澳洲幸运5官方开奖结果体彩网:income tax rate in the year of the distribution. (A traditional 401(k) works the same way.)

Roth

A Roth IRA allows certain distributions to be made on a tax-free basis, assuming specific conditions have been met. However, Roth IRAs do not provide a tax deduction in the years they're funded, meaning that they're funded with 澳洲幸运5官方开奖结果体彩网:after-tax dollars.

For both Roth and traditional IRAs, your distributions can begin at age 59½ and not before‚ although there are exceptions. If you withdraw IRA funds before age 59½, you'll pay a 10% penalty tax in addition to paying federal income taxes on the distribution amount. You may pay 澳洲幸运5官方开奖结果体彩网:state taxes as well. (Again, bo𒁏th Roth 401(k)s and traditional 401(k)s 🌳work the same way.)

IRA Contribution Limits

The 澳洲幸运5官方开奖结果体彩网:Internal Revenue Service (IRS) limits how much you are allowed to contribute each year to an IRA. The annual contribution limit for both traditional and Roth IRAs is $7,000 for 2024 and 2025. In both years, individuals who are 50 or older can add a 澳洲幸运5官方开奖结果体彩网:catch-up contribution of up to $1,000. 

Keep in mind that there's a penalty for over-contributing. Excess contributions are taxed by the IRS at 6% per year for each year the excess amounts remain in the IRA.

Roth IRA Income Limits

It's important to understand that Roth IRAs have income limitations established by the IRS.

You could be prohibited from contributing, or the contributions allowed could be reduced, depending on your tax filing status and 澳洲幸运5官方开奖结果体彩网:modified adjustꦏed gross income (MAGI).

The 2024 and 2025 Roth IRA income limits are listed in the chart below.

Traditional IRA Limits on Deductibility

The IRS also limits the amount of traditional IRA contributions that you're allowed to deduct if you (or your spouse) are covered by a workplace retirement plan.

The table below outlines the deduction amount allowed based on your MAGI and tax 澳洲幸运5官方开奖结果体彩网:filing status. Note that if neither you nor your spouse is covered by a workplace retirement plan, these deduction phase-outs do not apply.

Note: If you weren't covered by a retirement plan at work but your spouse was, your phase-out range in 2024 is $230,000 to $240,000. In 2025, it is $236,000 to $246,000.

Choose the Appropriate Investments

Because your retirement could be years—even decades—in the future, you need to put money into investments that will generate interest, pay 澳洲幸运5官方开奖结果体彩网:dividends (oꦓr cash payments), and grow in value so they can be sold 🐬later for a profit.

That is, they probably should fall into the broad category of growth and income (the allocations of each wiღll chaꦯnge over time).

You need to be aware of the need to keep up with 澳洲幸运5官方开奖结果体彩网:inflation—the pace of rising prices—since inflation is not going to stop when you retire. It will erode the value of your money. Generally, that means you need investments that grow in value.

Gauge Your Risk Tolerance

The first step in choosing your appropriate investments is to assess your 澳洲幸运5官方开奖结果体彩网:risk tolerance. Your risk tolerance aligns with how you fee🌃l about financial risk and taking investment c💙hances. Questions to help you assess your risk tolerance include:

• Would you be up at night worrying about your portfolio during an economic downturn?
• Do you see market crashes as buying opportunities, or are they worrisome since your account value drops (or you may lose actual money if you sell)?
• Would you prefer riskier investments that may gain/lose more money, or would you prefer safer investments that may not grow as much?

Very broadly speaking, stocks/equities are riskier forms of investments compared to bonds. An investor usually sets a 澳洲幸运5官方开奖结果体彩网:portfolio allocation to divide their po🌠rtfolio into riskier (e.g., stocks) and safer (e.g., fixed income securities) investments.

Mutual funds have 澳洲幸运5官方开奖结果体彩网:many advantages, as do 澳洲幸运5官方开奖结果体彩网:exchange-traded funds (ETFs), and should probably ❀be the centerpiece of most retirement portfolios. You can buy mutual funds that invest in stocks, bonds, a combin🦹ation of the two, or many other types of assets.

澳洲幸运5官方开奖结果体彩网:Index funds also have the advantage of relatively low fees and costs—another impo💧rtant thing to keep an eye on as you invest.

While 澳洲幸运5官方开奖结果体彩网:buy and hold is a time-honored investing strategy, you will also want to review your asset allocation over time. Investments that are appropriate for a 24-year-old may not be for a 64- or 74-year-old🤪.

You can lower your risk by finding bonds with a short maturity date, 澳洲幸运5官方开奖结果体彩网:certificates of deposit (CDs), 澳洲幸运5官方开奖结果体彩网:fixed annuities (not 澳洲幸运5官方开奖结果体彩网:equity-indexed or variable), safe dividend stocks, physical real estate, or other a♏ssets that you would consider yourself an experඣt in.

What To Do as Retirement Draws Closer

Before you retire, try to make a reasonable estimate of how much money you and your family will need to live comfortably during retirement. Then, add up all your likely income sources and compare the two. If your income won't be adequate to cover your expenses, you'll need to make some adjustments.

Note how your drawdown percentage may compare to your projected rate of return. For example, if you anticipate needing only 3% of your portfolio each year and expect annual growth of 4%, you will have enough retirement money. Howeve𝔉r, should the market not groಌw one year, your portfolio balance will decrease and impact future withdrawal periods.

Social Security

You will probably have multiple sources of retirement income, starting with 澳洲幸运5官方开奖结果体彩网:Social Security. You can get an estimate of your f🐎uture benefits at the Social Security Administration (♛SSA) website.

If you earned at least 40 credits (roughly ten years of work), you can obtain a personalized estimate using the SSA's . You can pl🌊ug your current income and planned retirement date into the Social Security for a ballpark figure.

If you're married, bear in mind that even if your spouse isn't eligible for Social Security benefits based on their work record, they may be entitled to 澳洲幸运5官方开奖结果体彩网:spousal benefits based on yours.

You can also 澳洲幸♐运5官方开奖结果体彩网:increase your Social Security income substantially by taking benefits later, rather than when you're first eligible (at age 62). Your benefit increases by 8% every year you delay taking benefits past your full retirement age (age 67, if you were born in 1960 or later), up to age 70. (At age 70, there's no further financial incentive to delay your payments.)

Other Sources of Income

Your other sources of retirement income might include one or more 澳洲幸运5官方开奖结果体彩网:defined-contribution plans, such as a 401(k) or 403(b), a traditional 澳洲幸运5官方开奖结果体彩网:defined-benefit penꦯsion, and any IꦯRAs you established over the years.

Outside of retirement accounts, you might have other assets, such as individual stocks and bonds, mutual funds, ETFs, 澳洲幸运5官方开奖结果体彩网:annuities, and CDs.

At some point (the earlier, the better for your planning purposes), you will also want to read up on 澳洲幸运5官方开奖结果体彩网:withdrawal strategies that can help you maximize your retirement income, minimize your tax bill,ꦕ ♐and—especially important—not deplete your savings prematurely.

The Bottom Line

It is not necessary to hire a professional to plan for your retirement. There is a tremendous amount of information with which to educate yourself 𓂃that is easily accessible.

Start now to learn some of the best strategies and tips for creating a retireme🐬nt nest egg that will allow you to li❀ve a comfortable life in your post-working years.