Retirement playbook: Here are five steps to a winning game plan

Kevin Price

For many, football season means bundling up, tailgate parties and gathering around the TV with friends and family for exciting action. It’s also a good time to pencil out some goals and a game plan for retirement.

Here’s a five-step playbook to consider in planning for retirement:

Protect the quarterback: The most important player on the field is you. If you’re put on the disabled list or change jobs, you need to meet your fixed expenses such as the mortgage, rent and health insurance. Take steps now to protect yourself. Build a six- to eight-month emergency or rainy day fund before you start funding your retirement. If you have a family and dependents, consider buying some form of life insurance.

Keep an eye on the goal line: When do you hope to retire? How many years will you spend not working? What do you want to do once you retire? In addition to imagining what life could look like in retirement, also consider the costs of taking up a new hobby or traveling. Remember that you’re more likely to live longer and enjoy a more active lifestyle than your parents.

While setting goals, it’s critical to understand your opponent. The biggest obstacles to a secure retirement could be not having enough money to retire comfortably and delaying the decision to start saving. Experts suggest it will take 75 percent to 85 percent of pre-retirement income to maintain the same standard of living once you stop working. Depending on your desired retirement lifestyle, you could need to increase or decrease this amount. The sooner you start to save, the longer your money has to grow. It is never too early, or too late, to start.

Field your best players: Retirement planning takes teamwork from top players committed to helping you succeed. The players include your employer, the Internal Revenue Service and your retirement plan. 

Employers that offer pretax savings plans give you all the motivation you need to get in the game. Thanks to Uncle  Sam, retirement account earnings are tax-deferred. This means you pay taxes on your money only when it is withdrawn. Your plan itself offers a range of investment options to meet your needs — whether growth,  income or preservation of principal.

Need more coaching? Your plan administrator can explain benefits, eligibility and options. Get general  information on the tax treatment of retirement plans at

Manage the clock: In planning for retirement, time is your biggest ally. A dollar invested in your 20s can grow far larger than the same dollar invested later in life thanks to the power of time and compounding. As you enter your 30s and 40s, you likely will have competing uses for your income, including a mortgage or saving for your children’s educations.

Although it’s easy to get distracted when so many needs compete for your money, stay focused on your retirement plan. Children can get financial aid or loans for college, but you can’t borrow for retirement.

Consider these tips:

Plow in more savings. In your 50s and 60s, such major expenses as mortgages and child-rearing should begin to wind down. Consider investing the extra dollars that might free up into your retirement plan.

Play “catch up.” Workers age 50 or over can put more dollars into their retirement plans once they’ve maxed out regular contributions. This is known as the “catch up” amount and for 2012 totals $5,500 if your plan allows this feature.

Hire a financial coach. A financial advisor or planner can help put together a retirement income strategy, including giving you a good sense for how much you can expect to withdraw once you retire.

Play until the whistle blows. Once you’ve retired, keep some of your money invested in stocks. With potentially 20 years or more in retirement, inflation can eat away at your nest egg. Although past performance can’t guarantee future results, stocks historically have beaten the rate of inflation. However, their returns vary to a much greater degree than such other types of investments as bonds or cash.

Winning on or off the field: Whether you choose to retire or keep working, it’s important to develop a game plan now so you’ll have more options later. Retirement can be an exciting time to go back to school, volunteer or simply take a breather and play golf. Whatever life you envision, the important thing is to keep mentally, physically and socially active so you get maximum enjoyment from your golden years.