Learn how much you need to retire comfortably, and how to prepare for the "unexpected." Plan for everything from living expenses, to healthcare, to planning that trip you've always wanted to take.

Letter from The Editor

Caleb Silver Editor-in-Chief, Investopedia

Our relationship with money has changed.

The pandemic accelerated a lot of those changes, but many of the forces were already set in motion over a decade ago. Investing apps and platforms, zero-commission trading, a historic bull market for stocks coming out of the Great Financial Crisis followed by record-breaking inflation, the emergence of cryptocurrencies, and the evolution of financial planning are just some of the forces that have reshaped the way we think, use, plan, save, and invest our money.

Our notions about retirement have changed, as well.

Younger generations are less likely to work at the same company their entire careers, collect a pension, and ease their way out of the workforce at the age of 65. We are living longer, and we need to be able to afford the lives we want to live when we stop working. For most people, retirement is not their end of work, but the end of being able to depend on a regular paycheck with benefits and a 401(k) match, if we were lucky enough to get one.

While over half of working adults in the U.S. are invested in the stock market, the average 401(k) balance for baby boomers and Generation X is only around $161,000 according to Fidelity. With the cost of living rising higher every year, and questions about the staying power of Social Security, the numbers just don't add up for most people nearing retirement.

There is no magic bullet solution to these problems. There are, however, some fundamental practices and approaches that younger adults and those approaching retirement, can focus on:

  • Financial awareness: Do you really know what it costs to be you?
  • Investing appropriately for your age: Are you too risky, or not risky enough, or well-balanced?
  • Balanced portfolio: Is the 60/40 portfolio still the answer, given the shake-out in the stock market?
  • Saving and budgeting in a world of rising prices: Inflation is not a bug in the system—it's a feature that we need to accept and incorporate into our personal budgets.
  • Planning and caring for yourself or family members: The cost of care keeps rising, but few are prepared for those bills when they come due.
  • Estate planning: If you can and want to pass along your savings to charity or the next generation, are your affairs in order?

Investopedia's special issue on retirement is our first foray into magazine publishing. We are honored to have been a go-to resource for millions of readers for the past 23 years, but we, like you, realize that the game has changed in retirement planning and investing. Therefore, we have dedicated those pages to laying out those changes and offering solutions that can help you change with the times.

Pick up your copy at your nearest retailer or buy now online. We hope you enjoy the issue and learn from it. The first step in financial awareness is to educate yourself, so let those pages help you get on the right path.

Frequently Asked Questions
  • What should I do in the 5 years before retirement?

    If you haven’t been tracking all this already, this is the time to calculate how much money you will need and how much income you can expect to have. Do the math, figure out whether you’re on track, and decide what to do next–everything from changing needs or retirement income to working a few more years. 

  • What is the best way to invest for retirement?

    Start by understanding your investment options–both the different types of retirement accounts and the various investment categories. Then start saving early, track your net worth, keep your cool, and watch out for fees that sap your gains. And unless you’re really good at this, don’t go it alone.

  • What are the stages of retirement?

    Retirement isn’t just one step called “stop working at a job.” After the pre-retirement stage and the big good-bye, expect to move through a honeymoon phase, disenchantment, the job of building a new identity, and finally settling into a routine. 

  • Where are the best places to retire?

    If you’re thinking of relocating after you retire, here are the best places in both the U.S. and abroad, according to retirement researchers. Be sure to make extended visits to any new location you’re considering before making the move, especially if it involves living in another culture where people speak a different language. 

  • What is a good retirement income?

    One rule is that people generally need 80% of their current income in retirement. Will you have that much? Start by estimating your future expenses, looking at how much you’ll get from Social Security, and reviewing your retirement savings accounts and any pensions, plus other savings you may have. 

  • What are the worst mistakes you can make in planning for retirement?

    Not thinking ahead can decimate your retirement. Among the bad steps: quitting your job before checking on your retirement-plan vesting status, not saving or planning, not maxing out employer matching funds, investment mistakes, poor tax planning and taking Social Security early. 

Key Terms
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Financial Planning Like a Pro
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Investing in Foreign Dividend Stock in a Roth IRA: What You Need to Know
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Roth IRAs for Americans Living/Working Abroad
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Can You Be a Retirement Plan Educator?
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How to Find Unclaimed Retirement Benefits
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Inherited 401(k) Options and Rules You Must Follow
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How the Superrich Use 401(k)s
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Are 401(k) Custodians Fiduciaries?
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What Are the DOL Rules for 401(k) Cybersecurity?
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What Are the Safest Investments for a 401(k)?
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What’s Prohibited in Reverse Mortgage Advertising?
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SECURE 2.0 Act of 2022: Overview, Rules, Limits
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Best Roth IRA Real Estate Investments
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Can an Adult Child Inherit a Parent’s Social Security Benefits?
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Can You Have a Robo Roth IRA?
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How Getting Divorced Affects Your Roth IRA
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How Getting Married Affects Your Roth IRA
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Favorite FIRE Investments in Your Roth IRA
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How to Invest in a Socially Responsible Roth IRA
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Generation X Guide to Roth IRAs
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What Do I Need to Set Up a Roth IRA?
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Gen Z Guide to Roth IRAs
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What Fees Do You Pay in a Roth IRA?
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What’s the Most You Can Earn to Invest in a Roth IRA?
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Social Security Benefits for for Same-Sex Couples: History and How Survivors Benefits Work
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How to Invest in Both a Traditional and a Roth IRA
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How Fees Impact Returns on Your Roth IRA
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Thrift Savings Plan (TSP) vs. 401(k)
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Preparing for Retirement as an LGBTQ+ Person
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Finding LGBTQ+ Friendly Retirement Options
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Retirement Savings by Gender
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Retirement Savings by Race
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Eligible Designated Beneficiary (EDB): Definition and Categories
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Should COVID-19 Change Your Retirement Strategy?
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Required Minimum Distribution (RMD): Definition and Calculation
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401(k) vs. Pension Plan: What’s the Difference?
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Employee Stock Ownership Plan (ESOP): What It Is, How It Works, Advantages
What Is the 4% Rule for Withdrawals in Retirement and How Much Can You Spend?
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Risk Profile: Definition, Importance for Individuals & Companies
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Financial Planning for Veterans
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