How to Ace Retirement Planning: A Thanksgiving Perspective

As we gather around the table this Thanksgiving, reflecting on what we're grateful for often leads us to think about the future—and how to make it as secure and fulfilling as possible. Much like preparing the perfect holiday feast, planning for retirement takes careful thought, the right ingredients, and a well-executed strategy.

Unfortunately, when it comes to retirement readiness, the United States has room for improvement. A major consulting firm has consistently ranked our retirement system with a grade no higher than a C+ for the past 15 years.

Why the lackluster score? For starters, fewer workers have access to traditional pensions that provide guaranteed income. Add to that the pothole-filled 401(k)/403(b) system, and the complexities of Social Security that make it challenging to maximize benefits.

But just as you wouldn’t settle for a bland Thanksgiving dinner, you shouldn’t settle for a “meh” retirement plan. It’s time to aim higher and create a retirement strategy that’s as rewarding as a second helping of pumpkin pie.

Here’s how to earn an A in retirement planning:

Get started ASAP.

If you aren’t yet saving for retirement, yesterday was the best time to start. If your employer offers a retirement plan and also kicks in a matching contribution, that is the place to start. Never turn down a matching contribution. And if your plan offers a Roth 401(k), I would consider using that for future contributions rather than the Traditional 401(k). Both are great ways to save for retirement. The big difference is when you are taxed. With a Roth 401(k) you contribute money that has already been taxed. Then it can grow for decades tax-exempt, and when you make withdrawals in retirement you get the big win: no tax is due on your withdrawal. That’s a big difference from Traditional IRAs: your contribution is made with pre-tax dollars. It too grows tax-exempt for decades, but in retirement when you make withdrawals every penny will be taxed at your ordinary income tax rate.

Unless you have a tax and retirement planning pro who has run the numbers and suggests you save in a Traditional, I think the Roth is the way to go. Especially because tax rates right now are at historic lows.

 If you don’t have a workplace plan, you can open an Individual Retirement Account (IRA) at any brokerage, such as Fidelity, Schwab or Vanguard. You will have two options for the type of IRA: Roth or Traditional.  My strong preference is the Roth IRA. The IRA contribution limit this year is $7,000 if you are younger than 50, and $8,000 if you are older. These will remain the same for 2025 as well.

Push yourself to save more.

As a general rule, I want you to aim to save 15% of your income for retirement. If you can’t commit to that right now, start with 5% or 6% or 10%. And then promise yourself you will increase that rate by at least 1 percentage point every six months, or year.

Strategize for how you can delay claiming Social Security.

In my book, The Ultimate Retirement Guide for 50+, I explain in detail why it is so smart for anyone in good health in their 60s to wait as long as possible to start receiving their Social Security retirement benefit. You are allowed to start at 62, but every month you wait earns you a higher benefit. The benefit at your full retirement age (between 66 and 67, depending on the year you were born) will be 25% to 30% higher than your age 62 benefit. Wait until age 70 to start—the oldest age at which waiting earns you a higher benefit—and your monthly payout will be 76% higher than what you are eligible for at age 62. If you expect to live well into your 80s and 90s, delaying pays off big time. But as I explain in my book, being able to delay requires careful planning that should ideally start in your late 50s.