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
federal employees discussing health benefits for retirement
Thrift Savings Plan (TSP) vs. 401(k)
Older gay couple walking to a cabin in the countryside
Preparing for Retirement as an LGBTQ+ Person
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Finding LGBTQ+ Friendly Retirement Options
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Retirement Savings by Gender
Older Black couple using a laptop
Retirement Savings by Race
Generations of a Black family walking in park
Eligible Designated Beneficiary
Man getting blood glucose testing by home health nurse during COVID-19 pandemic
Should COVID-19 Change Your Retirement Strategy?
Small Business
Association Retirement Plan (ARP)
Questions for your financial advisor
10 Questions to Ask A Financial Adviser About Retirement
Two Black women cooking together
What Is the SECURE Act and How Could It Affect Your Retirement?
Senior couple reviews paperwork and uses a laptop
Required Minimum Distribution (RMD): Definition and Calculation
Couple at home looking at investments on laptop
Spend or Save: Should I Pay off My Mortgage, or Invest for Retirement?
Two senior couples toast with glasses of wine.
401(k) vs. Pension Plan: What’s the Difference?
Bulk candy aisle at WinCo Foods, an example of a company that’s partially owned by its employees.
Employee Stock Ownership Plan (ESOP): What It Is, How It Works, Advantages
runcation-beach-running-exercise-vacation
What Is the 4% Rule for Withdrawals in Retirement and How Much Can You Spend?
Hipster senior man with beard using laptop and woman watching
Supplemental Executive Retirement Plan (SERP) Pros & Cons
Ethnic Senior Couple With Financial Advisor
The Importance of Updating Retirement Account Beneficiaries
Making Money Work for Her Business
Risk Profile: Definition, Importance for Individuals & Companies
Older couple with paperwork discussing retirement strategy
Best Places to Retire on Earth
How to Retire in the U.K. as an American
A man taking notes during a meeting.
Retirement Savings by Age: Where Do You Stand?
Investor watching the markets on multiple screens and a laptop
Should I Trade My Retirement Account?
An elderly couople smiling and drinking at a family barbecue in a courtyard.
Living Frugally and Happily in Retirement
A retired couple on the deck of a cruise ship
What Is a Substantially Equal Periodic Payment (SEPP)?
Simple wooden three legged stool, Finnish design
What Is the Three-Legged Stool?
Will Your Retirement Income Be Enough?
Will Your Retirement Income Be Enough?
The Most Expensive States to Retire in
Dual Income No Kids
Dual Income No Kids (DINK)? Ignore This Retirement Advice
In-Kind Redemptions
Distribution-in-Kind
Businesswoman on the move
Financial Independence, Retire Early (FIRE) Explained: How It Works
Senior couple using tablet on couch at home
Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)
Safe Withdrawal Rate (SWR) Method
How to Create a Retirement Portfolio Strategy
Senior couple cuddling on a cruise ship
The 11 Worst Retirement Mistakes: Sidestep Them
Older people ice skating at a rink
How to Plan for Travel in Retirement
Internal Revenue Service building, with stop light
Now You Can Save More for Retirement: 2022 Contribution Limits
Retirement Planning Doesn’t Stop When You Retire
Man looking at screen that says "guarantee income."
Interest-Only Retirement: Can It Be Done?
How RESA Could Reform Workplace Retirement Plans
How the U.S. Ranks on the Global Retirement Index
Close up Businessman using calculator for do math finance on wooden desk in office, tax, accounting, statistics and analytic research concept
Actual Deferral & Actual Contribution Percentage Tests (ADP/ACP)
Older couple in kitchen, looking at computer with papers in hand
10 Low-Risk Income Sources for a Safer Retirement
How to Manage Income During Retirement
4 Mistakes People Make When Downsizing in Retirement
Financial advisor helps retirees review paperwork
10 Ways To Borrow When Retired
Retired Couple Planning Once in a Lifetime Vacation
Retirement Planning Tips in Your Mid-60s and Beyond
A man comparing numbers on his calculator to numbers in a binder.
What Does Paying Yourself First Mean? How It Works and Goal
What Is Retirement Planning? Steps, Stages, and What to Consider
A businessman with glasess off holding glasses and papers in the office.
Systematic Withdrawal Plan (SWP)
Mature couple canoeing on tranquil lake, Alberta, Canada
Best Cities for Retirees to Age Successfully
Businessman and businesswoman having a meeting in office with laptop.
Guaranteed Lifetime Withdrawal Benefit (GLWB)
Can Retirees Live in Military Housing?
A view of the backs of two older men in caps sitting side by side.
How To Combat Depression After Retirement
A young businesswoman writing notes at an office desk.
What's Your Net Worth Telling You?
5 Countries With Easy Citizenship for Retirement
Happy Senior Woman Leading Her Family to Perfect Picnic Place on the Hill
The Most Popular States to Retire to in the U.S.
Mature woman reads portfolio near open laptop in bright room
Journey Through the 6 Stages of Retirement
Close Up Of Lady Justice Against Gavel On Book
How to Protect Your Retirement From Lawsuits
The Grestest Generation -- Dennis Smith’s tribute to the veterans of World War II
The Greatest Generation: Definition and Characteristics
5 Companies With the Best Retirement Plans