Your Money: The Missing Manual

Chapter 13. Retirement: The Final Frontier

"Doing the garden, digging the weeds—who could ask for more? Will you still need me, will you still feed me, when I’m sixty-four?”

—The Beatles

We all know we should save for retirement, but even those of us who are saving find the subject a little mystifying: How much should we save? For how long? And just where should we put our money?

You can spend a lot of time looking for the best options—or you can just get to work, reminding yourself that the sooner you start saving, the better. Besides, “best” is a moving target; what’s best today may not be best tomorrow.

This chapter will help you sort things out. You’ll learn some ways to estimate how much you need to save for retirement, and find out where to put your savings so it can grow as much as possible. You’ll also get a glimpse at the pros and cons of early retirement.

What Will Retirement Look Like?

Retirement means different things to different people. To you, it may mean a house on the lake with plenty of time to garden. To your best friend, it may mean the chance to travel the world or golf every day. Just as we each have different careers, we’ll have different experiences once we stop working and move on to other things. (In fact, some folks won’t ever stop working!)

According to a 2002 poll from Harris Interactive (http://tinyurl.com/HI-rpoll), less than a quarter of senior citizens view retirement as a winding down: “Most see retirement as either a continuation ...