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
Pension retirement plan
What Is a Collective Defined Contribution (CDC) Plan?
Three Women of Different Ages Sitting at a Conference Table
Why Women Have Less 401(k) Savings than Men on Average
Woman Managing Bank Account Online With Smartphone compound interest
How to Open a Compound Interest Account
Mother and adult daughter
How to Talk to Your Kids About Your Retirement Years
Senior couple using laptop at home to open up an IRA
How to Open an IRA
Financial Planning Like a Pro
What’s the Difference Between Pretax and Roth Contributions?
Woman saving money for college and retirement in jars
Should Investors Put Crypto in Their Retirement Accounts?
Plants that grow in a flower pot with fertilizer of coins
Investing in Foreign Dividend Stock in a Roth IRA: What You Need to Know
Couple drinking coffee
Roth IRAs for Americans Living/Working Abroad
Businesswoman doing a presentation
Can You Be a Retirement Plan Educator?
Person with baby looking at account statement
How to Find Unclaimed Retirement Benefits
Hispanic man paying bills on computer
What To Do if Your Company Offers a Subpar 401(k) Option
Adult woman using a laptop with her father at home
Inherited 401(k) Options and Rules You Must Follow
Couple Spa Day
How the Superrich Use 401(k)s
A couple plans for retirement by discussing life-cycle funds with an advisor.
Are 401(k) Custodians Fiduciaries?
Colleagues working on cyber security issues in control room
What Are the DOL Rules for 401(k) Cybersecurity?
Worried woman looking at past due financial bills at home
What if My 401(k) Isn't Performing?
Woman looking over finances
What Is the Impact of Inflation on My 401(k)?
A woman choose ultra-short bond investments for her portfolio using her computer.
What Are the Safest Investments for a 401(k)?
Senior man watching TV
What’s Prohibited in Reverse Mortgage Advertising?
Businesspeople exiting the Wall Street subway station in New York City
SECURE 2.0 Act of 2022: Overview, Rules, Limits
Businessman as a property agent or investor calculating growth of return on investment in real estate before signing contract at the office
Best Roth IRA Real Estate Investments
Parent holding adult child
Can an Adult Child Inherit a Parent’s Social Security Benefits?
A woman uses her smartphone to access her investment robo-advisor.
Can You Have a Robo Roth IRA?
Divorced woman taking off wedding ring
How Getting Divorced Affects Your Roth IRA
A couple discusses finances
How Getting Married Affects Your Roth IRA
A couple drives a rental while on vacation in Colorado.
Favorite FIRE Investments in Your Roth IRA
Socially responsible investing
How to Invest in a Socially Responsible Roth IRA
Teen summer job
How Old Do I Need to Be to Open a Roth IRA?
Women small business owners figuring out finances, budget, scheduling
Generation X Guide to Roth IRAs
Coins in a bottle and a plant growing with savings money put on the wood.
What Do I Need to Set Up a Roth IRA?
Image of cryptocurrencies and computer chip
Can You Own Crypto in Your Roth IRA?
Teen summer job
Who Can’t Have a Roth IRA?
Young employees socializing at work
Gen Z Guide to Roth IRAs
Learning how to read your brokerage account statement is vital to understanding your portfolio, its investments, the fees your broker may charge you, and more. In this article, I’ll help you do just that.
What Fees Do You Pay in a Roth IRA?
A yacht owner takes in the view.
What’s the Most You Can Earn to Invest in a Roth IRA?
Lesbian couple paying bills and using laptop at kitchen table
Social Security Benefits for for Same-Sex Couples: History and How Survivors Benefits Work
A young investor reviews investments on a laptop and tablet
How to Invest in Both a Traditional and a Roth IRA
A person stresses over financial documents.
How Fees Impact Returns on Your Roth IRA
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
A couple sits on a couch looking at a laptop.
Finding LGBTQ+ Friendly Retirement Options
A man holds a coffee cup while chatting with a woman who is sitting with a laptop at a counter
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 (EDB): Definition and Categories
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): Meaning, Sponsors, Benefits
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?
Required Minimum Distribution (RMD): A specific amount of money you must withdraw from a tax-deferred retirement account each year after reaching a certain age.
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?
Employee Stock Ownership Plan (ESOP)
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
Man in military uniform salutes in front of graves in a cemetery.
Financial Planning for Veterans
How to Retire in the U.K. as an American