No matter what stage of life you’re in, there are financial steps you can take today that will help set you up for a secure, comfortable retirement tomorrow. Here’s how to prepare for — and make the most of — your golden years.
Understand how much income Social Security replaces
According to the Social Security Administration, benefits replace about 40% of the average worker’s pre-retirement income. Since most people need 70–80% of their former income to maintain their lifestyle, you’ll likely need additional savings to bridge the gap.
Review your income sources well before retirement
Take inventory of your income streams: retirement accounts, pensions, taxable savings, Social Security benefits, and any part-time or consulting work. The earlier you assess these resources, the more time you have to adjust your strategy, increase savings, or modify your plans.
Take advantage of tax breaks for retirement savings
In 2026, you can contribute up to $24,500 to a 401(k), 403(b), or 457(b) plan, according to the IRS. If you’re 50 or older, you’re eligible for an additional $8,000 catch-up contribution — for a total of $32,500.
You can save for retirement through:
- Employer-sponsored plans (401(k), 403(b), etc.), where contributions grow tax-deferred.
- Individual Retirement Accounts (IRAs), which have a 2026 contribution limit of $7,500. Individuals who are 50 and older are eligible for a catch-up contribution of $1,100. For those age 60-63, the so-called super catch-up contribution for 2026 is $11,250.
Depending on your income, you may also qualify for a tax deduction for contributions to a traditional IRA.
Don’t sacrifice your retirement savings for your kids
It’s natural to want to help your children, especially with rising education costs. But pulling from your retirement savings can set you back significantly. Your kids can borrow for school, but you can’t borrow for retirement.
Additionally, retirement withdrawals can:
- Trigger taxes or penalties
- Increase your taxable income
- Affect your child’s FAFSA eligibility
It’s generous to help, but protecting your retirement should remain the priority.
Plan to save more than 10% of your income
The old idea of saving 10% of your income rarely holds up today. Most financial planners recommend a total savings rate of 15–20% of your pretax income, including employer contributions.
Women, who statistically live longer than men, may need to aim on the higher end of that range to ensure their savings last.
Prepare for the unexpected
More than half of retirees stop working earlier than expected — often due to layoffs, caregiving responsibilities, or health issues. Unexpected life events can significantly disrupt retirement plans.
It’s also a misconception that Medicare will cover most healthcare expenses. In reality, retirees face substantial out-of-pocket costs, and Medicare does not cover long-term care services such as extended nursing home stays.
Building an emergency fund and understanding your insurance options can help safeguard your retirement strategy.
Learn how to maximize your Social Security benefits
Your Social Security benefit is based on your highest 35 years of earnings, adjusted for inflation. If you claim benefits before reaching your full retirement age (FRA), which falls between 66 and 67 depending on your birth year, your monthly check will be permanently reduced.
Waiting until FRA (or delaying benefits up to age 70) can significantly increase your monthly income.
We’re here to help! No matter your age, career stage, or financial goals, Everwise Credit Union can help you choose the right savings tools to build a confident retirement. Stop by your nearest branch to talk with us about your options.
