Whether you’re planning to retire early or late, you might run into unexpected trouble. So plan carefully.
Many people have made a big financial blunder — they’ve failed to come up with a comprehensive retirement plan. Sure, you might have a rough idea of what you expect to do, but you’re exposing yourself to a lot of risk if you haven’t thought through various scenarios.
Here are some points to consider, whatever your rough retirement plan is.
Image source: Getty Images.
Are you planning to retire early?
If you’re planning to retire early, be sure that you have saved enough money to do so — because you may live a gloriously long life. That can be great in many ways, but it can spell disaster financially.
For example, imagine retiring at age 55. If you end up living to 95 or even 100 — which is a real possibility for many people — your nest egg is going to have to support you for 40 or even 45 years. That’s a tall order, and many people are behind, not ahead, in saving for retirement.
Check out the findings below from the “2025 Retirement Confidence Survey.”
|
Amount in Savings and Investments* |
Percentage of Workers |
|---|---|
|
Less than $1,000 |
16% |
|
$1,000 to $9,999 |
9% |
|
$10,000 to $24,999 |
7% |
|
$25,000 to $49,999 |
7% |
|
$50,000 to $99,999 |
12% |
|
$100,000 to $250,000 |
13% |
|
$250,000 or more |
37% |
Data source: 2025 Retirement Confidence Survey. *Excluding the value of a primary home.
Granted, many of these folks are still far from retiring, but if they would need, say, $1 million or $2 million for retirement, they may have trouble getting there. The table below shows how a nest egg can grow over time.
|
Growing at 8% for |
$6,000 Invested Annually |
$12,000 Invested Annually |
|---|---|---|
|
5 years |
$35,192 |
$70,399 |
|
10 years |
$86,919 |
$173,839 |
|
15 years |
$162,913 |
$325,825 |
|
20 years |
$274,572 |
$549,144 |
|
25 years |
$438,636 |
$877,271 |
|
30 years |
$679,699 |
$1,359,399 |
|
35 years |
$1,033,901 |
$2,067,802 |
|
40 years |
$1,554,339 |
$3,108,678 |
Calculations by author via Investor.gov.
Those last years are the most powerful, so retiring early and losing those years can leave you with a much smaller nest egg.
Are you planning to work until you’re 70?
Meanwhile, plenty of people expect to keep working for a long time, perhaps until age 70 or beyond, often because they feel they need to due to insufficient savings. But consider this. According to the 2025 report, “Retirement Realities: The Experience of Retirees,” from the Transamerica Center for Retirement Studies (TCRS) and Transamerica Institute:
- 52% of retirees surveyed retired earlier than they had planned to
- 47% of those retiring sooner than expected did so due to changes at work, such as a job loss or unhappiness at work
- Around 40% did so due to health reasons, such as an illness or disability
That’s a sobering reminder that we can’t assume we’ll be able to work as long as we want. While you can certainly hope to keep working, it’s best to save and invest as if you won’t be able to — just in case.
It’s also smart to look into whether getting long-term care insurance makes sense for you.
What to do
Many people simply need to save more aggressively — while investing effectively. For long-term growth, it’s hard to beat the stock market, and you can invest in stocks easily via one or more simple, low-fee index funds, such as:
- Vanguard S&P 500 ETF (VOO 1.01%)
- Vanguard Total Stock Market ETF (VTI 1.12%)
- Vanguard Total World Stock ETF (VT 0.88%)
The first will let you invest in 500 of America’s biggest and best companies, making up about 80% of the U.S. stock market’s value. The second offers access to pretty much the entire U.S. stock market, and the third offers access to the world’s stock market.
You might take other actions, too, such as relocating to a less costly region or less costly house for retirement, or working a little during your first years of retirement, if you can. There are many other ways to generate income for retirement, and a little online research will turn them up.
Be sure to develop a solid retirement plan — and make sure you’re on track to have what you need when you need it.