Putting it All Together
Retirement planning can be thought of as consisting of two phases:
- The accumulation phase -- saving for retirement
- The distribution phase -- living in retirement
Note: For a quicker estimate of how much you'll need to save, see the graphs in How Much Money Will You Need to Retire?, What Percent of Your Salary Should You Save For Retirement? (by starting age), or percent to save with higher incomes.
A Consolidated Retirement Accumulation & Distribution Plan
The graph above shows a retirement plan for a 35 year old, Alex, who hopes to retire at age 65 and live to age 90 (click on graph to expand it. See the end of the post for a link to the spreadsheet). Alex has no savings yet, but is planning to save 13 percent of salary from now on. Alex plans to put 3% of pay into taxable accounts and split the remaining 10% equally between