Quick Guide to Planning for Retirement (2025 Edition)
Retirement planning isn’t about hitting some magic number. It’s about building enough flexibility to control your time, income, and choices. At the end of the day, money is just a means to an end, but it's what that money can do for you during your lifetime. This guide gives you the basics—clear and updated for 2025.
1. Know What You’re Aiming For
Stop asking, “How much do I need to retire?” Start asking:
How much monthly income will I need?
When do I want work to be optional?
What will my fixed vs. discretionary expenses look like?
You have to get clear on what you think you want! Yes, retirement is a weird thought (thinking of an old person sitting on their front porch all day), but we think of it more so as financial independence or being work optional. We all want to reach a point where we do not have to work for money. You can still work, but the key word is HAVE to.
2. Understand the Three Retirement Buckets
You need tax diversification, not just asset diversification. Use all three:
Pre-tax:
Tax deduction now, taxed later
Ex: 401(k), Traditional IRA
Roth/Post-tax:
Taxed now, tax-free later
Ex: Roth IRA, Roth 401(k)
Taxable:
No tax benefit now, flexible access
Ex: Brokerage account, savings
Build all three so you can control your tax rate in retirement.
Related: Guide to the 3 Tax Funnels: Where Should Your Next Investment Go?
3. Automate Your Investing
You’re more likely to succeed when investing is on autopilot.
Set up recurring transfers into your retirement and brokerage accounts.
Invest in low-cost, diversified funds (index funds or ETFs).
Don’t guess the market. Stay consistent.
4. Know the 2025 Contribution Limits
Maxing out your accounts creates more future income and tax savings. Here’s what’s new in 2025:
401(k)/403(b)/457 - $23,000
Traditional & Roth IRA - $7,000
SIMPLE IRA - $16,000
SEP IRA - $70,000 or up to 25% of your compensation
HSA (Family) - $8,550
The above amounts do not include catch up contributions.
Income limits apply to Roth IRA contributions. High earners may need to use a backdoor Roth strategy.
Related: 2025 Important Numbers
5. Keep Taxes in Mind
Your tax rate now may be lower than your future rate. That’s why Roth accounts are so powerful. You should also:
Consider Roth conversions during lower-income years.
Use tax-loss harvesting in brokerage accounts.
Watch for RMDs (required minimum distributions) starting at age 73.
Good planning means you decide when and how to take income—not the IRS.
Related: The Hidden Tax Impact of Your Stock Trades: What Wealthy Investors Need to Know
6. Track Your Progress
Your plan should be dynamic, not set-and-forget:
Review retirement projections annually.
Adjust based on income changes, tax law shifts, and spending needs.
Track your net worth and savings rate monthly or quarterly.
Final Thought
Retirement isn’t an age. It’s a cash flow decision. You retire when your assets can consistently support your lifestyle. Start building that system now. This system needs to be reviewed as your plan changes and your net worth grows.
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About the author: Finn Price, CPFA, CEPA, is a business owner and wealth manager at Railroad Investment Group. He helps successful entrepreneurs & individuals with concentrated stock positions in their 30s, 40s and 50s build, organize, protect and transfer their wealth.
Note: this article is general guidance and education, not advice. Consult your money person or your attorney for financial, tax, and legal advice specific to your situation.
Securities and advisory services offered through LPL Financial, a registered investment Advisor, Member FINRA/SIPC.
