When you’re searching for a job, the primary focus is usually on finding employment, not preparing for retirement. But should your career goals include what comes after you’re done working? Depending on where you are in your career, the answer may vary. Several financial planners offer advice for including retirement in your career goals, no matter what your stage in life.
Early in your career
For those just starting out, retirement may seem unfathomable, let alone a priority. But should it be? Adam D. Koos, founder and president of wealth planning firm Libertas Wealth Management Group Inc., says, “First, when you’re young, it’s not as crucial to find a career with a good retirement plan — if one exists at all. I think most college grads would be in good shape to find a job that aligns somewhat closely to their chosen professional area of study, but these days, even that’s hard to come by. Of course, if one can find a career with a retirement plan in place, I also think the earlier you start saving, the more ‘trained’ you’ll be in the future to put more money away as your income increases versus spending it. And it goes without saying that the earlier you start, the more savings you’ll have come retirement age.”
Want to know what your peers are doing? “I see two distinct tracks as I work with people in their late 20s and early 30s: Either they see their employment as a means to another end, like starting their own business eventually, going back to school or becoming a professor; or they see themselves as always being a career employee and have chosen that path,” says Mindy Crary, financial planning coach and founder of Creative Money.
No matter what path you’re on in your career, it’s important to manage your finances at every stage. “I always tell my clients that if they aren’t sure where they are going, then they need to decide what financial resources will help them figure that out in the next three years,” Crary says. “Usually, that means a higher income so they can save more money for a transition, but more sane hours and fewer retirement incentives. On the other hand, if the client is committed to being a long-term career employee, then they need to work for firms that maximize retirement contributions and matching. These firms typically have a higher cost for entry — like working longer hours — but when someone proves themself, the benefits can set them up for life.”
Later in life
Retirement becomes a more common topic of conversation as you mature. “For those in transition later in life, call it the 40-55 year olds, I believe it is crucial to ensure your place of work has a retirement plan in place,” Koos says. “A match would be nice, but even without ‘free money,’ having the ability to put as much money away — on either a pretax or a post-tax, tax-free basis via a Roth 401(k) — as possible during those later years is key, since most investors don’t start really forking money away until later in life.”
Closing in on retirement
Mature workers in the final stretch of their career should have a retirement plan in place or an outlined idea of how they’d like to spend this last stage. “Unless you are purely working for the sheer enjoyment of it, retirement is your end goal of your entire career,” says Samantha Fraelich-Rohe, certified financial planner and vice president of Bernard R. Wolfe & Associates. “Some careers will allow you to work part time or even as a consultant at retirement age, and that can make for an easier transition since many people have a difficult time stopping work completely. They still like to have a sense of purpose but with more flexibility to do other things they enjoy. Also, you may want to take notice of the retirement benefits certain careers offer. The largest expenses for retirees tend to be medical-related or assisted care-related, so if your career provides benefits that you can carry throughout retirement at reduced costs, that can be beneficial as well.”
Retirement plans will fluctuate as you go through life and change your goals. Yet, by considering retirement at every career stage, you’ll be financially set when it’s time to stop working.