Posted: Aug. 13, 2017 12:01 am

The retirement planning process has been described as a "40 (or more) year journey" from the start of someone's working life in their 20s through retirement in their 60s (or beyond).

However, it is actually much longer, if you consider how long someone can live during retirement. Unlike shorter-term financial planning goals like buying a car, a house, or saving for a child's education, retirement planning can literally take place for seven or eight decades from the start to the end of someone's adult life (e.g., 20s through 80s or 90s).

Workplace retirement planning programs often target a wide swath of worker demographics ranging from recent college graduates in their 20s to soon-to-retire employees in their 50s, 60s, and beyond.

Financial objectives for each group are different, however. The focus for young adults is saving early and often, preferably with automated retirement savings plan deposits.

Other key topics for young adults are repaying student loan debt and basic investing principles to make informed retirement plan investment decisions.

For older workers, the focus of financial education efforts tends to shift to retirement income catch-up strategies, the question of "Have I saved enough money?" the mechanics of applying for retirement income benefits (e.g., Social Security and/or a pension) and making withdrawals from tax-deferred savings plans to comply with IRS required minimum distribution (RMD) regulations and to avoid outliving one's assets.

Older late savers are also often seeking creative options to stretch their retirement savings throughout their lifetime.

Planning principles

Regardless of someone's stage in life and where they are on their retirement planning journey, five retirement planning principles are timeless and apply to everyone:

First, Get Started -- Set a goal and make a savings plan. Determine your retirement savings need with a Ballpark Estimate calculation (see below) and then develop an action plan to save the required amount.

Save Early and Often -- Set up automatic savings plans through an employer and/or investment company so that deposits are made regularly (e.g., 5 percent of income every payday), regardless of stock market conditions.

Invest Part of a Raise -- When you get a raise, bonus, freelance work pay, or other increase in income, invest half of it. If your employer offers "auto escalation," sign up so that raises take effect automatically.

Don't Delay Any Further -- It's never too late to start investing for retirement. If you haven't saved anything yet for retirement, the best day to get started is today. Any retirement savings is better than none.

Stay Educated About Retirement Planning -- Changes to Social Security rules and retirement savings plans are not unusual so it is important to stay up to date via financial publications, media, social media, etc.

Helpful websites

There are many available websites that can help people with personalized retirement planning calculations and other planning tasks related to retirement planning. Below are seven examples:

Ballpark Estimate (American Savings Education Council): http://www.choosetosave.org/ballpark/

Provides a rough estimate of the amount of money that someone needs to save for retirement.

Compound Interest Calculator: http://www.moneychimp.com/calculator/compound_interest_calculator.htm

Shows what an investment deposit will grow to at a specific interest rate over a specific number of years.

Life Expectancy Calculator: http://www.northwesternmutual.com/learning-center/the-longevity-game.aspx (The Longevity Game, Northwestern Mutual Insurance)

Provides an estimated life expectancy based on personal health and lifestyle factors.

My Retirement Paycheck (National Endowment for Financial Education): http://www.myretirementpaycheck.org/

Contains information about eight key retirement decisions organized by topic (e.g., housing).

Retirement Budget Worksheet (TIAA-CREF): https://www.tiaa.org/public/pdf/advice-planning/tools-calculators/A125820_budgeting_worksheet.pdf

The worksheet is a fillable PDF and can be completed using a computer or on a printed hard copy.

Retirement Readiness Rating (EBRI): https://www.ebri.org/pdf/surveys/rcs/2000/fact8-r3quiz.pdf

An online quiz that assesses a person's financial preparation for retirement.

Will You Have Enough to Retire? (CNN Money): http://money.cnn.com/calculator/retirement/retirement-need/

Provides a personalized calculation based upon personal data (e.g., retirement age and amount saved).

Barbara O'Neill, an Andover Township resident, is extension specialist in Financial Resource Management for Rutgers Cooperative Extension. She can be reached at 848-932-9126 or oneill@aesop.rutgers.edu. She also tweets daily financial education messages on Twitter at http://twitter.com/moneytalk1.

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Planning for your retirement is a 40-year journey - New Jersey Herald