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The Top 5 Ways to Begin Securing Your Retirement

If you enter the phrase above into an internet browser search bar, you will receive hundreds of relevant articles to read. Our list below is influenced by our own experiences and those of our clients, and we hope that our perspective inspires you to take one step towards securing the type of retirement you envision for yourself.

1. Start Saving for Retirement NOW!

The best time to have started was when you earned your first paycheck, whether that was 1, 5, 10, 20, or 30 years ago. The next best time is today, because of the power of compound interest1. There are three main variables that affect the amount of retirement savings and, therefore, your retirement income: (i) The amount you save; (ii) the length of time your savings are growing; and (iii) the investment rate of return. YOU have the most control over variables (i) and (ii), and we believe those are the most powerful inputs to the equation. So, do not wait until that next promotion or raise, do not save for your children’s college fund first (there are government and private loans available for education but not for your retirement!), and start saving for your retirement today.

2. Use All the Investment Accounts Available to You.

You need to be aware of the many “tools in the toolbox” of retirement savings and investments. If your employer provides a matching contribution, it is essential that you contribute to that plan and save at least enough to earn the full match. For example, many employers will match 50% of your contribution up to 3% of your salary. In this case, you should put the 3% into the plan and receive 1.5% of your salary from the employer. That is a 50% return on your investment, potentially the best investment return you will ever realize! If your employer does not offer a retirement plan, then we suggest opening a Traditional IRA or a Roth IRA.  Both account types allow investments to grow tax-free, but the Traditional IRA provides a tax deduction when you make a contribution but requires tax payments on future distributions, while the Roth IRA provides tax-free distributions but no tax-break on the contribution. Basically, the younger you are and the higher you expect your future marginal tax rate to be, the more you should consider the Roth IRA option. A final thought in this brief document would be that we suggest you also have a regular brokerage account, without any tax advantages, because it will provide additional flexibility and liquidity while you save for retirement as well as when you are spending down your retirement savings.

3. Build an Emergency Fund

One great use of a brokerage account can be a place to park, separate from your banking accounts, your emergency funds. These funds, which we believe should total 6-18 months of your annual living expenses, are meant to protect you from unforeseen negative life events, which may include the loss of a job, injury from an accident, a healthcare emergency, auto repairs, or dozens of other curveballs that life can throw at you. These funds should be invested in a highly liquid and safe savings account or money market fund that is meant to shield you from the need to raid your own retirement funds, which usually comes with penalties or fees and could also be subject to bad timing from a market valuation perspective. In short, this is to keep you from wiping out your retirement savings.

4. Do the Back of the Envelope Math for Your Nest Egg2.

Most people know they should be saving for retirement, but fewer people have identified a target value. The average retirement length in the United States is between 15 and 20 years and you should typically plan on needing 70-90% of your pre-retirement working income. So, a couple earning $140,000 might expect to need $100,000 of retirement income, and if their estimated Social Security retirement benefits are $45,000/year, that leaves $55,000/year for their nest egg to provide, without any other retirement income sources such as pensions or annuities. A popular and simple rule of thumb retirement withdrawal strategy is called the 4% rule3, which states that a 4% withdrawal rate should allow for a sustainable and steady income stream during retirement. In this case, that would indicate a required retirement fund of $55,000/0.04 = $1,375,000; considering a 3% or 5% withdrawal rate provides a range from $1,100,000 to $1,833,333.

5. Create a Simple and Prioritized Budget.

Be intentional about your retirement savings and start with a goal of saving 3-5% of your income, then the next dollars of your budget go towards non-discretionary items like housing costs, food, healthcare, transportation, and children. The remainder of your income can go towards more discretionary items, you know… the fun stuff, like eating out, going to movies or concerts, and vacations. Review the budget 1-4 times per year to evaluate your success, and if you can save more, do it. Also, make sure that you step up the amount of retirement savings anytime your salary increases.

If you have any questions or would like to discuss any of the above in greater detail, please feel free to reach out to Jeremy Kirkland or Scott Redmond at 804-288-6080, and we’d be happy to provide a free in-person consultation about your investments and a path to the retirement you want.





  • Past performance is not indicative of future results. Investing always involves uncertainty; therefore, risk of loss is something clients should be prepared to bear.

  • This information is provided for educational and illustrative purposes only and should not be construed as individualized investment advice. We recognize that each client’s investment needs and goals are different, and that the investments or strategies discussed herein may not be suitable for all investors. Any opinions or estimates contained herein constitute the judgment of Redmond Asset Management, LLC and are subject to change without notice. 

  • Equity Securities Risk. Stock markets are volatile, and the price of equity securities such as common and preferred stocks (and their equivalents) will fluctuate. The value of equity securities purchased by a fund could decline if the financial condition of the companies in which the fund invests decline or if overall market and economic conditions deteriorate.

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