Back to Basics: Tips for Retirement Planning


Because life expectancy is longer for today’s retirees than in previous generations, people need to save more money for a longer period of time. The good news is awareness on this issue is high; the bad news is savings efforts are not. A 2018 survey by the Federal Reserve found that one-quarter of non-retired adults had no savings at all.1

T. Rowe Price recommends saving about 11 times your preretirement salary by age 65. However, the rate at which you save depends on how early you start and how consistent you are. Ideally, young adults should aim to save at least 15 percent of their annual income consistently throughout their careers. If you start later, consider increasing that share over time to help shore up the effort. Many employers now make this easy to do by automatically enrolling workers in a payroll deferment retirement savings plan and even periodically increasing that savings rate.2

Deciding where to invest your money can be confusing. As a general rule, diversify your choices over a range of asset classes, such as stocks, bonds and cash instruments. This can help reduce risk and take advantage of growth opportunities in different sectors. However, pay attention that you don’t overlap many holdings. For example, a growth mutual fund may have many of the same securities as an S&P 500 index fund. Also recognize that your IRA investments could overlap with your employer-sponsored retirement plan.

Speaking of growth, most investors will want to incorporate a growth component in their retirement portfolios. This is true even for retirees since, over a long retirement, they’ll want their income to keep pace with inflation. The key is to determine an appropriate percentage of your assets to allocate to stocks or a stock mutual fund. Investors typically reduce that percentage as they get older.

You may want to consider diversifying your retirement portfolio across a combination of tax-deferred, tax-free and taxable investments. For example, if you have an employer-sponsored plan at work, you also may want to save through an individual Roth IRA, if you meet the income limitations. The money you save in a Roth cannot be deducted from your current taxes like 401(k) deferrals. However, the money contributed to a Roth (up to $6,000/year in 2019; $7,000 if you’re age 50 or older) grows on a tax-deferred basis, and qualified withdrawals are not subject to taxes when withdrawn.3

Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

1 The Board of Governors of the Federal Reserve System. May 2019. “Report on the Economic Well-Being of U.S. Households in 2018.” https://www.federalreserve.gov/consumerscommunities/files/2018-report-economic-well-being-us-households-201905.pdf. Accessed Nov. 6, 2019.

2 Judith Ward. T. Rowe Price. Aug. 23, 2019. “Aiming for a 15% Savings Goal.” https://www.troweprice.com/personal-investing/planning-and-research/t-rowe-price-insights/retirement-and-planning/retirement-savings/why-and-how-to-save-15-a-year-for-retirement.html. Accessed Oct. 10, 2019.

3 IRS. “Retirement Topics – IRA Contribution Limits.” https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits. Accessed Oct. 30, 2019.

Communications such as this are not impartial and are provided in connection with advertising and marketing of the financial services offered by Guardian Capital Management, LLC. Guardian Capital Management, LLC is not an attorney or a tax professional and the information contained herein should not be considered tax or accounting advice, legal or regulatory advice. 

The information provided herein is educational in nature and not designed to be a recommendation for any specific investment product, strategy, plan feature or other purposes. Accordingly, it should not be construed by any consumer and/or prospective client as solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation. Prior to making any investment or financial decisions, an investor should seek individualized advice from a personal financial, legal, tax and other professional advisors that take into account all of the particular facts and circumstances of an investor’s own situation. Guardian Capital Management, LLC offers investment advice through Belpointe Asset Management, LLC, 125 Greenwich Avenue, Greenwich, CT 06830 (“Belpointe”). Belpointe is an investment adviser registered with the Securities and Exchange Commission (“SEC”). Registration with the SEC should not be construed to imply that the SEC has approved or endorsed qualifications or the services Belpointe offers, or that or its personnel possess a particular level of skill, expertise or training. Insurance products are offered through Guardian Resources. Important information and disclosures related to Belpointe are available at http://www.belpointe.com. Additional information pertaining to Guardian Capital Management, LLC and/or Belpointe’s registration status, its business operations, services and fees and its current written disclosure statement is available on the SEC’s Investment Adviser public website at https://www.adviserinfo.sec.gov/.

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