Building a Solid Retirement Foundation
Getting Started with Retirement Planning
What do traders need to know about retirement planning? You should understand that it's a long-term game, requiring patience, discipline, and a well-thought-out strategy. The average salary for a Retirement Planner in the U.S. ranges from $54,000 to $84,000, indicating that professionals in this field are dedicated to helping individuals achieve their retirement goals. By age 65, average retirement savings are $537,560 for those aged 55 to 64, highlighting the importance of starting early.
Most traders miss the fact that retirement planning is not just about accumulating wealth, but also about creating a sustainable income stream. You'll want to consider investing in a mix of low-risk and higher-risk assets, such as bonds, stocks, and real estate, to generate consistent returns. For example, investing in index funds like SPY or QQQ can provide broad market exposure and potentially lower fees.
The Setup: Understanding Your Retirement Needs
Beyond that, you need to assess your individual retirement needs, including your desired lifestyle, expenses, and income requirements. The median annual household income for Americans aged 65 and older is $56,680, which may not be sufficient to maintain your current standard of living. You should consider factors like inflation, healthcare costs, and potential market downturns when estimating your retirement expenses. Meanwhile, you can use online tools or consult with a financial advisor to determine your retirement savings gap and create a personalized plan.
On the flip side, investing in individual stocks like AAPL can be a viable option for those looking to generate higher returns. However, you should be aware of the associated risks, such as market volatility and company-specific factors. A 2% position size can limit your maximum loss to $500 on a $25,000 account, providing a relatively safe way to invest in individual stocks.
The Play: Investing for Retirement
Here's what most explanations miss: investing for retirement requires a long-term perspective and a well-diversified portfolio. You should consider allocating 60% of your portfolio to stocks, 30% to bonds, and 10% to alternative assets, such as real estate or commodities. Investing in dividend-paying stocks like Johnson & Johnson or Procter & Gamble can provide a relatively stable income stream, while also offering potential for long-term growth. You can also use ETFs like QQQ to invest in a basket of growth-oriented stocks, such as Amazon or Microsoft.
Meanwhile, you should be aware of the fees associated with investing in mutual funds or ETFs, as they can eat into your returns over time. You can use a brokerage account or a robo-advisor to invest in a tax-efficient manner, potentially reducing your tax liability and minimizing fees. For example, investing in a tax-loss harvested portfolio can help you offset gains from other investments, reducing your tax burden and increasing your after-tax returns.
Your Action Step: Creating a Retirement Plan
Now that you understand the importance of retirement planning, it's time to take action. You should start by assessing your current financial situation, including your income, expenses, and savings. You can use online tools or consult with a financial advisor to determine your retirement savings gap and create a personalized plan. Set an alert at $585 for SPY's 50-day moving average, which can provide key support and help you determine when to invest or rebalance your portfolio.
Beyond that, you should consider allocating 10% of your income towards retirement savings, using a tax-advantaged account such as a 401(k) or IRA. You can also use a retirement calculator to estimate your retirement expenses and determine how much you need to save each month to achieve your goals. By taking these steps, you can create a solid retirement foundation and increase your chances of achieving a comfortable and secure retirement.
Last updated: June 2026
By the Investing Strategies Editorial Team
This content is for informational purposes only. Not financial advice—always do your own analysis before making investment decisions.