Key Points
How much you need to retire depends on many factors, including what you want your retirement years to look like.
Starting small has the same benefits as making larger contributions to your retirement plan.
Getting a late start on retirement planning doesn't mean you're out of luck.
For many, the idea of planning for retirement can be overwhelming. After all, how is the average person supposed to invest enough to end up with over $1 million -- or whatever the latest amount is they're told they need to retire? Factor in the high cost of living and everyday life goals, and it can be hard to even get started.
The reality is that no two people are alike. What one needs to retire happily may be nothing like what another needs. For example, one may plan to relocate to their dream location after retiring, while another simply wants to stay put.
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Self care
Experts agree that planning for retirement is an important part of financial preparedness. In fact, it's one of the most concrete things you can do for your mental and physical health.
Planning doesn't have to be big and dramatic to improve your life. Imagine you earn $50,000 a year and start out by contributing 1% of your annual salary to a qualified retirement account or individual retirement account (IRA). The first year, you contribute a total of $500, or around $42 per month. A year later, you realize that you're doing fine without the 1% you've been contributing, so you raise the amount to 2% of your annual salary, or $1,000 annually.
The payoff is two-pronged: You're less stressed knowing you're doing something to prepare for retirement, and you feel hopeful as the account grows. That feeling is likely to encourage you to raise your contributions annually.
How saving for retirement calms your mind
Once you have a plan, regardless of how long it might take to reach your goals, you no longer have to constantly worry. The fact that you're actively working toward building a retirement account means your mind can shift away from a sense of helplessness and uncertainty. You can even begin to consider things like your withdrawal strategy in retirement.
Research has found that people who maintain consistent saving habits report healthier levels of emotional, physical, and social well-being. What's more, these reports are similar, regardless of income level. Even making relatively small, regular contributions can restore a sense of control. Instead of simply hoping things work out, you actively define what retirement will look like for you.
The feeling of progress you experience each time your account balance grows or you increase your contribution slightly is strongly linked to better mental health, including a reduced risk of depression and greater resilience to setbacks in life.
Naturally, the earlier you start, the more time your retirement account has to grow. Still, that doesn't mean you're out of luck if you start later in your career. Starting later may mean that you decide to work a few years longer or take on a side gig to help you tuck away more each month, but anything you do for your retirement account, you also do for your personal well-being.
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