[GUIDE] Everything you need to know about planning for retirement, including a tax-smart move you can make right now.
TL;DR: This is a thread about retirement. And how to plan for it. Here’s what we’re covering:
- Contributing to an IRA ahead of Tax Day
- Envisioning your retirement dream
- The 3 As of retirement (amount, account, and asset mix)
- The power of doing 1% more
- Creating a real-life financial plan
- Plus some bonus tips if you’re feeling extra
Let’s get you to a place where you feel ready to take on retirement
https://reddit.com/link/1rmkfox/video/us46usea0pmg1/player
If you’re planning to contribute to an IRA this year (and every year), you should do it before Tax Day, April 15^(th). Why? Because you could reduce your taxable income for 2025.
Sure, retirement might feel a little far away, but April 15^(th) is right around the corner. So make the tax-smart move and contribute to an IRA today.
Now let’s start to think about what smart moves like this could add up to in the future: your dream retirement.
You probably wouldn’t plan a vacation without picking a destination first. You can think of retirement in a similar way. It’s easier to plan when you have a general idea of where you’re headed.
Before we dive in, let’s level set on your retirement planning mindset for different stages of life.
- ELI25: You may not be thinking of what you want to do yet. But an idea of the “who, what, where, and when” will help you create a plan to look forward to. Start saving early if you can, because every little bit helps.
- ELI35: You still may not know how you’ll spend the future. But thinking about what you want later on in life can help you get more serious about your plan (and your savings).
- ELI45: Gut check: This is kinda the halfway point of your career. Picturing how you want to retire can help motivate you to save even more for it.
No matter where you’re at, a plan for the future could help you enjoy life right now.
1. Who are you planning for?
Yourself? Kids? Grandkids? Pets?
Knowing what and also who is important to you will help you better understand how much you might want to save.
2. What do you actually want to do?
Work some or not at all? Travel far or stay close to home? You decide. There is no one-size-fits-all version of retirement.
Thinking about your future day-to-day can help you figure out how much you might need. Which can help you figure out your saving and investing strategies. Which can help you figure out when you can retire. Which is the whole point of this.
3. Got more goals than just retirement?
Wanna buy a home? Save for education? Take a dream vacation?
Planning can help you balance your goals for the future with the things you want to do right now.
Go from dreaming about retirement to working toward it. The more you’re able to save and invest early on, the more time that money has the potential to grow.
It's time to start picturing yourself retired and make a plan.
The basics of a retirement plan are made up of 3 As: Amount, Account, and Asset Mix. Not sure where to start? Need a quick refresher? Let’s go.
A quick 3 As primer:
- Amount: Aim to save at least 15% of pre-tax income each year toward retirement.
- Account: Workplace savings accounts like 401(k)s or 403(b)s, IRAs, self-employed 401(k)s, HSAs—take advantage of what you can for tax-deferred or tax-free growth potential.
- Asset Mix: Diversify your investments, depending on how long you have to invest.
Saving 15% of your pretax income might seem like a lot, especially if you’re not saving much right now. It’s all good. You can work your way up to 15%. AND that 15% includes any match or profit sharing from your employer.
*You don’t need to contribute all 15% if your employer chips in.
Consider saving as much as possible, as early as possible. And if you didn’t? It’s OK. You could make up for it by taking advantage of any opportunity to max out your workplace savings account. AND you may be able to contribute more than 15% of your income.
15% not in the budget? That’s OK too. If you have an employer match, try to contribute enough to get that. (It’s basically “free” money.) Then try to invest as much as you can. Keep scrolling to see how even 1% more, or as little as $100/yr, potentially adds up to thousands in the future.
https://reddit.com/link/1rmkfox/video/dhz9nn2x3pmg1/player
An account is where you save (and invest) your money. Some of the most common retirement savings accounts include 401(k)s, 403(b)s, 457(b)s, and IRAs.
There are tax-deferred accounts and tax-free accounts. Both can be useful to know and have:
- Tax-deferred means you’ll pay taxes on the money when you take it out of the account.^(1)
- Tax-free means you’ve paid taxes on the money now and you’ll pay no taxes when you take it out of the account, provided it is a qualified withdrawal.^(2)
- There are benefits to both.
With a traditional 401(k) or an IRA, your contributions and earnings are tax-deferred. Meaning you pay taxes on your withdrawals once you’re in retirement. The benefit? Contributions to these accounts generally reduce your taxable income and, in turn, reduce your tax bill in the year you make them.
With a Roth 401(k), self-employed 401(k), or IRA, contributions are made after taxes. You generally don’t have to pay taxes on withdrawals if you meet qualifications.
Traditional, Roth, or both? To figure out which is right for you, there are many factors to consider. For many, the answer comes down to a simple question: Am I better off paying taxes now or later? Here’s more on how to compare your IRA account options.
Note: You may have heard about an HSA (health savings account) as an account you can use in retirement. If you have an HSA-eligible health plan, it can be one of the most tax-efficient options available (tax-deductible contributions, tax-free earnings, tax-free withdrawals***^(3)***), helping you save, invest, and pay for qualified medical expenses both now and in retirement. Read up on how an HSA could complement your overall plan.
An asset mix refers to the way you invest the money you’re contributing to your retirement accounts. You can choose from mutual funds, exchange-traded funds (ETFs), CDs, bonds, or individual stocks. Choosing different investments is a way to help diversify your portfolio (the investments you have).
To choose an asset mix, you’ll consider how long you have to invest (your time horizon), how you feel about risk, and your own financial circumstances, including whether you want to manage your own investments or have someone manage them for you.
Data source: Fidelity Investments and Morningstar Inc, 2025 (1926–2024).
Let’s talk about risk. Investing inherently involves risk. When choosing your asset mix, you should be able to feel comfortable riding the ups and downs of the stock market. Feeling comfortable in your asset mix can make you less likely to panic when stocks fall. (Selling low can lock in losses, making it harder to reach your goals.)
How long you have to save can affect your asset mix. You want to make sure that your mix reflects how long you’ll be invested and any associated need for growth. (In short, some assets may grow faster than others, and some may carry more risk, which is why you may want to consider a mix.)
Age is more than a number. It’s a good way to help figure out your asset mix. The longer the time the money will be invested, the more time there is to ride out the market’s ups and downs. So, as a general rule, the younger you are, the heavier your mix could lean toward stocks, because those potential short-term dips could be less impactful on your long-term goals.
As you get older, check in on your portfolio. You might want to adjust your mix. Being too aggressive could be risky—you would have less time to recover from a market downturn. However, being too conservative could limit your money’s growth potential.
As you get closer to retirement, it might make sense to reduce the percentage of stocks in your portfolio while increasing investments in bonds and short-term investments.
https://reddit.com/link/1rmkfox/video/c4hla7du3vmg1/player
How do you get started picking an asset mix? You’ve got a few options. If you don’t have the time, expertise, or interest in managing the asset mix in your IRA, you could choose:
- A target date fund, where you pick a fund with the target year closest to your expected retirement.^(5) This is a single-fund solution designed to gradually (and automatically) adjust the asset mix over time.
- An asset allocation fund, where a fund manager sets and maintains a fixed asset mix.
- A professionally managed account. One option is a low-cost robo investor. We offer Fidelity Go®.^(6) (You can learn more here.)
Some final words on going the DIY asset mix route: A diversified mix of investments is important. You wouldn’t want your portfolio to be dependent on any one type of investment. If you want to do it yourself, consider funds that hold a mix of investments in companies both large and small, from different parts of the world, and in different industries.
Got more Qs? We’ve got more info about the 3 As of retirement over here. Plus even more about investing and asset allocation right here.
Just 1% more can make a big difference. If you can increase your savings by just 1% now, it could mean a lot in retirement.
No matter if it’s $10, $100, or more, saving money early—and consistently—in life can help you live the retirement of your dreams.
Bonus points if you’re able to increase that amount over time.
Adding just 1% more into a tax-advantaged retirement account (think 401(k), 403(b), or IRA) could make a big difference for retirement. While 1% is a small percentage of your paycheck today, after 20 or 30 years, it could make a big difference in your account balance when you retire.
https://reddit.com/link/1rmkfox/video/fugf8q864vmg1/player
Not feeling a savings bump?
If you can’t increase your savings now, try doing it once a year. Some 401(k)s allow you to set up an automatic increase every year. (Sign up if you can.) Or, if you typically get a raise each year, you could time your savings increase to happen at the same time, so you won’t notice the effect on your paycheck as much.
Wanna read more about how to save more? We’ve got more right here.
Ready to build your own retirement plan? Break it down and go one goal at a time.
Here’s a 3-step process.
If you’d like some assistance, we have financial professionals at the ready who can help answer your retirement planning questions.
Let’s start with a goal you’d like to enjoy when you retire. Think: stopping work when you’re 65, owning a lake house, or maybe buying a nice little spot in your favorite city.
Your starting point for this goal? That’s your current income, any debt, and your spending and savings. Figure out how much you have coming in and going out (aka a budget) so you can see what’s left over (aka what you can save).
Hot tip: Get specific on your goal—like retiring by age 65. Research says doing so can improve your odds of success more than picking a general “spend less” or “save more” goal.
Big picture time. With all your financial details in front of you, you can compare them with your goals. This can help you gauge your progress and see how achievable your goals are. It’s also a great way to adjust your priorities, if necessary, and move on to the next phase of planning.
Remember: It’s normal to have more than one savings goal. You might be planning for an upcoming vacation and buying a home at the same time while also keeping an eye on retirement.
That big picture can help you understand how much you have as opposed to what you might need.
If you see you’re on track for your goals, that’s great. And if you feel behind, a plan can help you stay focused on what matters to you.
Remember: It’s more than OK to find out your savings aren’t on track. It’s actually a good thing to find that out, because it means you have a chance to improve the situation.
How will you catch up? You could save more, save for a longer time, and/or check out investment options that could help. We can help you make a free plan for retirement^(7) and suggest next steps to help your financial outlook, too.
Must do: Celebrate your progress: hitting a milestone, achieving a goal. It’ll help keep you motivated to keep going.
If you made it this far... you're ready. It’s time to start planning for the retirement you want.
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Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.
This information is intended to be educational and is not tailored to the investment needs of any specific investor.
^(1) A distribution from a Traditional IRA is penalty-free provided certain conditions or circumstances are applicable: age 59 1/2; qualified first-time homebuyer (up to $10,000); birth or adoption expense (up to $5,000 per child); emergency expense (up to $1000 per calendar year); qualified higher education expenses; death, terminal illness or disability; health insurance premiums (if you are unemployed); some unreimbursed medical expenses; domestic abuse (up to $10,000); substantially equal period payments; Qualified Federally Declared Disaster Distributions or tax levy.
^(2) A distribution from a Roth IRA, Roth 401(k), Roth 403 (b) and Roth 457 (b) is federally tax free and penalty free, provided the five-year aging requirement has been satisfied and one of the following conditions is met: age 59½, disability, or death.
^(3) With respect to federal taxation only. Contributions, investment earnings, and distributions may or may not be subject to state taxation.
^(4) Data Source: Fidelity Investments and Morningstar Inc.
Past performance is no guarantee of future results. Returns include the reinvestment of dividends and other earnings. This chart is for illustrative purposes only. It is not possible to invest directly in an index. Time periods for best and worst returns are based on calendar year. The purpose of the target asset mixes is to show how target asset mixes may be created with different risk and return characteristics to help meet an investor’s goals. You should choose your own investments based on your particular objectives and situation. Be sure to review your decisions periodically to make sure they are still consistent with your goals.
Hypothetical value of assets held in untaxed portfolios invested in US stocks, foreign stocks, bonds, or short-term investments. Historical returns and volatility of the stock, bond, and short-term asset classes are based on the historical performance data of various unmanaged indexes from 1926 through the latest year-end data available from Morningstar. Domestic stocks represented by IA SBBI US Large Stock TR USD Ext Jan 1926-Jan 1987, then by Dow Jones US Total Market data starting Feb 1987 to Present. Foreign stocks represented by IA SBBI US Large Stock TR USD Ext Jan 1926–Dec 1969, MSCI EAFE Jan 1970-Nov 2000, then MSCI ACWI Ex USA GR USD Dec 2000 to Present. Bonds represented by US Intermediate-Term Government Bond Index Jan 1926–Dec 1975, then Barclays Aggregate Bond Jan 1976 - Present. Short-term/cash represented by 30-day US Treasury bills beginning in Jan 1926 to Present.
Indexes are unmanaged. It is not possible to invest directly in an index.
Stock markets are volatile and can fluctuate significantly in response to company, industry, political, regulatory, market, or economic developments. Investing in stock involves risks, including the loss of principal.
In general, the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities). Fixed income securities also carry inflation risk, liquidity risk, call risk and credit and default risks for both issuers and counterparties. Lower-quality fixed income securities involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Foreign investments involve greater risks than U.S. investments, and can decline significantly in response to adverse issuer, political, regulatory, market, and economic risks. Any fixed-income security sold or redeemed prior to maturity may be subject to loss.
^(5) Target Date Funds are an asset mix of stocks, bonds and other investments that automatically becomes more conservative as the fund approaches its target retirement date and beyond. Principal invested is not guaranteed.
^(6) Fidelity Go® provides discretionary investment management, and in certain circumstances, nondiscretionary financial planning, for a fee. Advisory services offered by Strategic Advisers LLC (Strategic Advisers), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. Strategic Advisers, FBS and NFS are Fidelity Investments companies.
^(7) Fidelity's Planning and Guidance center allows you to create and monitor multiple independent financial goals. While there is no fee to generate a plan, expenses charged by your investments and other fees associated with trading or transacting in your account would still apply. You are responsible for determining whether, and how, to implement any financial planning considerations presented, including asset allocation suggestions, and for paying applicable fees. Financial planning does not constitute an offer to sell, a solicitation of any offer to buy, or a recommendation of any security by Fidelity Investments or any third-party.
Diversification and asset allocation do not ensure a profit or guarantee against loss.
Dollar cost averaging does not assure a profit or protect against a loss in declining markets. For a Periodic Investment Plan strategy to be effective, customers must continue to purchase shares both in market ups and downs.
Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.
Fidelity Brokerage Services LLC, Member NYSE, SIPC.
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Posted Mar 6, 2026, 5:33 PM UTC · locked