When the concept of retirement is brought up, the phrase “I’ll start tomorrow” often becomes the biggest obstacle to a fulfilling and stress-free retirement. If you’re planning for this major life stage, you might be wondering when to take that first step. The good news is there is no one answer.
When to Start Retirement Planning
The ideal time to start planning for retirement depends on your current circumstances, financial goals, and the lifestyle you envision for your future. However, the earlier you start, the more flexibility and financial security you’ll have.

No matter when you start, here’s a look at how you can make the most of your investment opportunities:
Starting Early
Starting your retirement planning in your 20s or 30s can set the stage for financial security later in life. During these years, time is your greatest ally. Even small contributions to a retirement account can grow substantially due to compound interest.

This early start allows flexibility. You can weather market fluctuations, adjust strategies as needed, and develop consistent saving habits without feeling the pressure of catching up later. Plus, you have more time to take calculated risks with your investments, which could lead to higher returns.
Midlife Planning
If you’re in your 40s or 50s and haven’t begun planning for retirement, don’t panic. While you might need to contribute more aggressively, you still have valuable time to prepare. This period is often marked by peak earning years, allowing you to allocate more resources toward retirement.

Many people in this stage prioritize maximizing contributions to 401(k) plans, IRAs, or other retirement accounts. Catch-up contributions, available for those aged 50 and older, provide an opportunity to boost savings. Additionally, this is an ideal time to evaluate your expected retirement lifestyle and assess whether your current savings trajectory aligns with your goals.
Late Starts
For those starting in their 60s, retirement planning might feel overwhelming, but it’s never too late to take action. This stage requires a focus on strategies that optimize what you have. Consider downsizing your living arrangements, exploring part-time work opportunities, or revising your investment portfolio to favor less volatile options.

Social Security benefits also play a key role for late planners. Understanding when to claim these benefits can significantly impact your retirement income. Delaying benefits until full retirement age or beyond can lead to higher monthly payments, which can provide more financial stability.
The Importance of Setting Goals
No matter when you start, defining your retirement goals is a pivotal step. Explore the type of lifestyle you envision. Do you plan to travel extensively, support family members, or simply enjoy a comfortable existence? Your vision shapes how much you need to invest.

Traditional IRAs, Roth IRAs, and employer-sponsored plans each come with unique advantages, such as tax deferral or tax-free withdrawals. Aligning your savings strategy with your goals lets you make informed decisions about where to allocate your funds.
Seeking Professional Guidance
Retirement planning can be complex, especially when navigating investment options, tax implications, and income strategies. Consulting with financial advisors can provide clarity and help you create a personalized plan. Advisors bring valuable expertise to the table, helping you understand concepts like diversification, risk tolerance, and withdrawal strategies.

They can also assist with projecting future expenses, such as healthcare costs, which tend to rise significantly during retirement.

Ready to take control of your retirement planning? Our team at Bumgardner Morrison & Co LLP offers personalized financial guidance to help you achieve your goals confidently. Contact us today to learn more about how we can assist you!

Small Business Accounting Advice

What the CARES Act Means for Your Business

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, is a $2 trillion stimulus bill that was signed on March 27. This historic government funding dwarfs the two rescue packages from the Great Recession. It is aimed at supporting large and small businesses, industries, individuals, families, gig workers, independent contractors, and hospitals. But, its hefty price tag, quick signing, and less than stellar rollout have left many individuals and businesses wondering how it will relieve their burdens.

1. Paycheck Protection and Loan Forgiveness

The Paycheck Protection Program offers guaranteed loans of up to 250 percent your monthly payroll average, based on your previous year’s numbers. This loan is designed to allow you to continue to pay your workers during these difficult times. If your business is eligible, you can obtain this loan anytime between February 15 and June 30. The portion of the Payment Protection loan spent on payroll, rent, mortgage, interest, or utilities is also forgivable by the SBA as long as all employees are kept on the payroll for eight weeks. Any portion of the loan that is unforgivable will be treated as a two-year loan with a 1% interest rate. However, payments on this amount will be deferred for 6 months. While the current Paycheck Protection Program funds have been accounted for and are set for distribution, Congress is working diligently to provide additional funds to continue offering the program to assist businesses.

2. Unemployment Benefits

Unemployment benefits are also being extended. Individuals that can qualify for unemployment now include those diagnosed with COVID-19, have a household member with the disease, are caring for someone with the disease, or are quarantined due to the disease. It also applies to individuals who cannot go to work due to coronavirus, is unable to begin their job, has become a widower of someone who was diagnosed with coronavirus and was the primary money maker, someone who quit due to coronavirus, and if your business closed. In addition, gig workers and self-employed workers are also covered under the CARES Act.

3. Penalty-Free 401(k) Withdrawals

Typically, if you’re younger than 59 1/2, the IRS slaps you with a 10% penalty when you withdraw money from your 401(k). But under the CARES Act, you can withdraw up to $100,000 penalty-free during the 2020 fiscal year to ease financial hardships caused by the coronavirus. Withdrawal will still be subject to your ordinary income tax rate, but instead of paying the lump sum this year, you can disburse payments over a three-year term.

4. Employee Retention Credit

To encourage businesses to keep employees on their payroll during the slowdown, the IRS is offering a refundable 50% tax credit of up to $10,000 in wages paid by an eligible employer. An eligible employer is defined by a business that is temporarily suspended in any form due to coronavirus, or that is making less than half its average revenue. Employers can immediately claim the tax credit by withholding taxes that they would otherwise deposit each quarter. If credits exceed their tax liability, then employers can file a Form 7200 to receive an advance refund.

5. Employer Payroll Tax Delays

Ordinarily, business owners collect 6.2% of their employees’ wages for Social Security Tax and then match their contribution dollar for dollar. But the CARES Act allows employers to delay paying their portion of payroll tax in full until December 31, 2022, with at least 50% being due by December 31, 2021. It is important to note that all businesses are approved for the deferral, but if you receive a loan under the SBA’s Paycheck Protection Program, you will not be eligible.

6. Paid Leave

Under the Families First Coronavirus Response Act, businesses with fewer than 500 employees will receive tax credits for the cost of providing paid leave to employees if taken for specified reasons related to COVID-19. The tax credit will reimburse employers for 100% of the employee’s salary and health insurance costs. Employers will also face no payroll tax liability for the paid leave.
Final Thoughts
Don’t try to navigate these muggy waters all by yourself. Working with a tax and accounting expert is the best way to make sure you take advantage of the new stimulus package. If you have additional questions regarding the CARES Act, we recommend you visit the IRS’s page for Business Tax Relief. For more information on individual benefits checkout the resources at genyplanning.com and commercebank.com.