By Kara Stevens
It’s important to plan for retirement because the truth is, you may not be able to (or want to) work well past 65.
And while you may have heard this advice before, it bears repeating: The earlier you start planning for retirement, the more control you have over your future. This planning comes with a lot of moving parts, some completely outside your control, and includes healthcare costs; global public health; and the ups and downs of the stock, job, and housing markets. Understanding these variables and taking smart, early steps can help you build a retirement that truly supports the life you want — and protects you from having to return to work.
This is critical for women. On average, women in the U.S. are expected to live nearly six years longer than men while often facing unique financial challenges. Career interruptions for caregiving — whether for children or aging parents — can lead to significant lifetime earnings losses. For instance, women who reduce work hours or leave the workforce entirely to provide care lose an estimated $324,044 in wages and Social Security benefits over their lifetime. These factors underscore the importance of early and strategic retirement planning for women.
How to Start Planning
If you have 25 years or more until retirement, time is on your side. A good first step is determining how much income you’ll need to support yourself. Most Americans will require roughly 55% to 80% of their pre-retirement earnings to maintain their lifestyle.
For example, if you currently earn $200,000 a year, you might need about $100,000 to $160,000 annually in retirement to live comfortably.
“This rule of thumb is not universally applicable, but it gives you a place to start,” says Emily Birken, author of The 5 Years Before You Retire. If you plan to travel more, spend more, or pursue additional education in retirement, your assets may need to cover more than 80% of your current income. Conversely, if you plan to downsize your home or car as an empty nester, or relocate to a region with a lower cost of living, you may need less than 55% of your salary.
Once you have a clear financial goal, you can map out your retirement strategy. Beyond fully funding your 401(k), aim to maximize other tax-efficient vehicles like Roth IRAs, Health Savings Accounts (HSAs), and Flexible Spending Accounts (FSAs).
Unlike traditional 401(k)s, which defer taxes on pre-tax contributions until withdrawal, Roth IRAs use post-tax money. “The benefit is that it grows tax free. Once in retirement, you can also access it tax free after you’ve held the account for at least five years and you’re over the age of 59 1⁄2,” says Birken.
If your career trajectory continues upward, contributing to a Roth now can also lock in your lowest-ever tax rate. “You’re going to basically lock in the low tax amounts now; in retirement, you have access to this tax-free income,” Birken explains.
Similarly, HSAs allow tax-free spending on healthcare in retirement, which is projected to cost the average 65-year old retiring today over $172,500 throughout the life of their retirement. It’s often called a triple-tax-advantaged account: contributions are pre-tax, growth is tax-free, and withdrawals for qualified medical expenses are tax-free.
Finally, FSAs also offer tax-free growth. The FSA can be divided into dependent care FSA and medical FSA. The former goes toward the costs of summer camp, daycare, and even adult care for aging parents. The latter offsets costs for doctor’s visits and buying medicine with pretax money,” says Ramat Oyetunji, founder of the FI Woman.
By leveraging these accounts early, you give your money the opportunity to grow efficiently over time, setting a strong foundation for a comfortable retirement.
Make It Non-Negotiable
Maximizing your tax-efficient accounts is critical, but all the strategy in the world won’t matter if you don’t make retirement a true priority. The choices you make about spending, saving, and balancing competing goals set the tone for whether your retirement plan actually succeeds. That’s where mindset comes in: thinking of retirement as non-negotiable ensures that the numbers you’ve been crunching have a real impact on your future.
Money is limited, and balancing retirement savings with other financial goals (like college tuition) can feel emotionally and financially overwhelming. To navigate competing priorities, Emily Birken suggests focusing on what she calls “most possible.” “Your children can take out loans for college, but there is no way for you to take out loans for retirement, so retirement savings comes first,” Birken explains.
Approaching your finances with this mindset helps ensure you won’t become a financial burden on your children later in life. That said, Birken notes it’s okay to temporarily pause retirement contributions to fund other goals, but only after reaching a significant savings benchmark and establishing a clear plan to resume. This approach allows you to care for your family without sacrificing your long-term financial security.
When You’re Nearing Retirement
With roughly 10-15 years until retirement, it’s time to review your risk profile and consider whether your investment portfolio needs reallocation. Your risk profile depends on both your tolerance for risk and your retirement timeline. As you get closer to retirement, your risk tolerance naturally declines. “You want to take risks that are suitable and appropriate for being just 10 years away,” says Oyetunji.
Consolidate Your Portfolio
If you’ve worked at multiple companies, you may have several 401(k)s or other retirement accounts. Consolidating them makes asset allocation and portfolio management much easier as you near retirement. “You can roll them over into whatever brokerage accounts you have so you have them centralized in one or two places,” says Oyetunji. “Rolling them over into your current company is also possible if it offers better investment options.”
Downsize Debt
Retiring with debt is generally a no-go, but not all debt is created equal. Start by paying off high-interest obligations like credit cards and private student loans. For lower-interest debt, such as mortgages, federal student loans, or car loans, balance repayment with ongoing investing. This approach reduces financial stress while keeping your retirement plan on track.
Less Than 5 Years to Retirement: Don’t Panic
Being under five years from retirement can feel urgent, but it’s not time to panic. While no strategy can guarantee maintaining your exact pre-retirement lifestyle, failing to act when you’re behind makes difficult adjustments almost inevitable.
If possible, staying on the job a few extra years can be powerful. You’ll have more to save, and your investments continue growing without withdrawals. For example, if you work from 65 to 68, saving 20% per year and earning a 5% net return, a $500,000 nest egg could grow to around $635,000.
Even small amounts of income — through part-time work, consulting, or occasional projects — allow you to withdraw less from your nest egg, stretching your savings further. Sites like RetiredBrains.com and RetirementJobs.com can help you find opportunities. Just check how work might affect Social Security benefits.
Relocating to a lower-cost city, region, or country can make your retirement savings go much further. By reducing housing costs, taxes, and everyday expenses, this move can naturally allow you to downsize, simplify, and adjust your lifestyle — stretching your nest egg while still maintaining the quality of life you want.
Make Your Investments Stretch
Even in retirement, you’re still an investor. To avoid running out of money too soon, continue making smart investment decisions. During the early years, aim to preserve the principal while reallocating assets strategically so your money continues to grow, keeping pace with inflation and economic changes. “Working with a financial planner can help you determine if you should sell securities or invest in something else to rebalance your portfolio throughout retirement,” says Oyetunji.
Consulting a financial advisor can also help you apply commonly cited rules, like the 4% rule — withdrawing 4% of your total investments in your first retirement year, then adjusting for inflation each subsequent year. When applied carefully, this approach gives you a high probability of not outliving your money over a 30-year retirement.
Women have the power to redefine what retirement looks like. By planning early, maximizing your resources, and making intentional choices, you can transform these years into a chapter of independence, adventure, and fulfillment.