Many people work their whole lives trying to achieve retirement.

Once the family is raised, the house is paid for and other financial challenges are achieved, it is time to live every day like it’s Saturday. So, how do we know if the target is likely to be reached?

As Ben Franklin said, “If you fail to plan, you are planning to fail.”

The first step is to set goals. What do you envision retirement looking like and how much does it cost you to accomplish? Once you know these figures you can work backwards to figure out how much you need to save. It is important to consider inflation and be realistic when calculating expected returns on your investments.

The earlier you start saving the better. If you are 30, save $600 per month and earn 7% per year, you will have one million dollars at age 65. If you started saving at age 20, you would only have to invest $300 per month to have a million dollars. Starting early is important, but starting late is much better than never starting at all.

After starting to save, it is important to never stop. You must pay yourself first. That means you put away your savings goal and then pay your bills. This will help you control your discretionary spending. A survey by Bankrate suggests that 1 in 5 Americans aren’t saving anything and only 1 in 6 save over 15% of their income.

There are two variables that control how much you can save.

First are income earnings and the second is spending. According to one survey, 38% of working Americans have too many expenses. For example, Americans shell out more than $2,900 a year on restaurants, prepared drinks and lottery tickets. Probably the two biggest expenses people faces are going through a divorce and the vehicles they purchase over their lifetimes. Both of these things can have a major effect on savings.

To increase the chances of building a retirement dream, get a holistic, written financial plan.

A holistic plan considers all elements of financial planning such as taxes, health care and legacy planning. Make sure that you save in the right types of accounts. Too many people end up with most of their money in qualified accounts such as IRAs and 401(k)s. This can cause a tax nightmare during retirement. It can cause more of your Social Security to be taxed and also increase your Medicare premiums. If all of your savings are in qualified accounts, required minimum distributions may force you into costly tax decisions.

Make sure you have sufficient emergency money to meet your liquidity needs.

We saw during the pandemic how quickly many people ran out of money. This may be able to keep you from having to take money out of the stock market when it is down. Also strive to pay off debts. This is especially true about credit card debt. They have some of the highest interest rates in the country.

It is never too late to start saving, but you will have a lot more options in retirement if you start sooner.

Your Financial Future is written by certified financial planner Gary W. Boatman, MBA and CFP, who also wrote the book, “Your Financial Compass: Safe Passage Through The Turbulent Waters of Taxes, Income Planning and Market Volatility.” If there is an area that you would like to see discussed in the column, send your suggestions to

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