How to start retirement planning early and avoid mistakes

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PHOENIX — As 2025 approaches, now is the perfect time to take charge of your financial future. Retirement planning can feel overwhelming, but with the right guidance, you can avoid costly pitfalls and set yourself up for success. Matt Dages, president and founder of Bright Wealth Management, shared essential insights on how to take a proactive approach to retirement planning.

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Why start now?

Procrastination can lead to higher taxes, unnecessary stress and missed opportunities. Dages emphasized the importance of creating a detailed retirement plan.

“It’s like preparing for a vacation — you can’t get there without a plan,” he said.

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This includes understanding key concepts like Required Minimum Distributions (RMDs), which force withdrawals from tax-deferred retirement accounts starting at a certain age.

The importance of RMDs

Many retirees are unaware of how RMDs work. Dages explained that without proper planning, retirees might face higher taxes in retirement than during their working years. “It’s better to pay taxes on the acorn than the oak tree,” he said, stressing the value of early tax planning to minimize the future burden.

Strategies for lower taxes

One effective strategy is considering Roth conversions during historically low tax rates. By moving funds from traditional accounts to Roth accounts now, you can avoid the “tax time bomb” later when rates rise. Dages noted that forward planning could save retirees 2-4% in taxes over time.

Debunking the retirement savings myth

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While conventional advice suggests needing $2-$3 million to retire comfortably, Dages challenges this notion.

“Retirement is personal,” he said.

A well-thought-out plan tailored to your needs can provide a comfortable retirement, even without meeting the lofty benchmarks touted online.

Take the first step

Receive a complimentary written retirement plan or call 833-777-4296 for more information.

The Bright Wealth Management Show with Matt Dages airs Saturdays from 1 p.m. to 2 p.m. and Sundays from 3 p.m. to 4 p.m. on KTAR 92.3 FM.

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