Course 3
Retirement Planning
Your golden years should be spent enjoying life, not worrying about finances. Learn the strategies to build a robust retirement portfolio that outlasts you.
Start Early
Time is more important than timing. The earlier you start, the less you have to save monthly thanks to compound interest.
Set a Goal
Calculate your estimated annual expenses in retirement, then multiply that by 25 to find your target portfolio size (the 4% rule).
Diversify
Don't put all your eggs in one basket. Mix US stocks, international stocks, and bonds based on your target retirement year.
Understanding Account Types
Traditional IRA
Contributions are often tax-deductible in the year they are made. Your investments grow tax-deferred, meaning you don't pay taxes until you withdraw the money in retirement. Best if you expect your tax rate to be lower in retirement than it is now.
Roth IRA
Contributions are made with after-tax money, meaning no immediate tax benefit. However, your investments grow tax-free, and qualified withdrawals in retirement are completely tax-free. Best if you expect your tax rate to be higher in retirement or prefer tax-free income later.