Savings Tips / Financial Life Planning / Budgeting

How To Start Planning Your Long-Term Financial Goals

Words by Abbie Dyer on Sep 29, 2022 10:34:56 AM

Creating goals is an important part of your financial wellbeing. On our blog, we’ve shared articles to help you get your finances on track, like how to create a budget, ideas to meet your savings goals, managing your credit score, and strategies to pay off debt. Once you've mastered these basics of personal finance or reached some of your short-term goals (a goal you can reach in five years or less), it's time to start thinking about your long-term financial goals. But when you’re thinking more than five years in the future, sometimes it’s hard to know where to start.

Saving money with no goal in mind is like running a race without a finish line. How do you know when to stop? How do you prepare for a race when you don’t know how far you’ll be running? Setting a goal helps you stay motivated during your financial journey. Remember, it’s okay to change your goals later if life takes you in a new direction. But it’s important to just get started.

Set A Timeline

A recent study by Gallup found that most non-retired workers now expect to retire at a later age (age 66) than they did in 1995 (age 60).1 And the average age of retirement among retirees is now 61 years old, which is an increase on the average age of retired individuals in in 1991 (57 years old).1 Though many factors play into the decision to retire (health, family situation/caregiving, employer, etc.), one big consideration for retirement is your financial situation. To start planning, think about a rough timeline of when you hope to retire.

While most people think of retirement when talking about long-term savings goals, remember that this can be any large life event that you're planning for. Consider other milestones, like getting married, buying a home (or a second home), going on a big vacation, helping your children attend college, and more.

Consider Your Future Lifestyle

In addition to setting a timeline for your long-term goal, think about your future lifestyle as well. For example, when thinking of retirement consider what you want your life to look like at that time. Do you want to travel often? Do you plan to have your house paid off or will you move somewhere warmer? Consider what lifestyle factors are most important to you and rank them in order of importance.

Options To Save For A Long-Term Goal

Once you have a timeline established and lifestyle goals set, it’s time to explore different savings options.

There are many options besides a traditional savings account to save for a big life event. Before you choose a savings option, it’s important to think about your timeline. The longer your savings timeline, the less you’ll need to contribute to your long-term savings each month.

Options to consider include:

Certificate of Deposit (CD): A CD account is like a savings account with a timeline attached to it. You’ll choose a term (or timeframe) when you open the account and decide on a dollar amount to save. CDs typically have a higher interest rate than a savings account, which makes them appealing to people who are looking for an easy way to set some money aside and watch it grow.  

Keep in mind that you may have to pay an early withdrawal fee if you need to take money out of your CD before the term is up. And pay attention to when your term ends. You usually only have a 10-day window to determine if you want to withdraw the funds after the term ends. Otherwise, your funds will automatically roll over into a new CD.

Money Market Account: A money market savings account offers a tiered interest rate based on your balance that may be greater than a traditional savings account. This option offers more flexibility than a CD, as there’s no time limit on the account and you can add funds whenever you want, but the rates are typically lower than CDs.

Money market accounts may have a minimum balance requirement to start earning interest. And you may be charged a monthly fee if your balance falls below a certain amount.

Roth IRAs: A Roth IRA (individual retirement account) is a retirement savings plan where your money is invested in different types of accounts (like stocks and bonds).4 Your contributions to this account are taxed before they are invested, meaning your money can grow tax-free.5,7 As of 2023, Roth IRAs have a contribution limit of $6,500 per year. If you are over age 50, you can contribute up to $7,500 per year. Check out the IRS website3 for more specific details around contributions limits.

Withdrawals from Roth IRAs are usually not taxed, but the earnings you accumulate may be subject to taxes or fees when you take funds out of this account.5,7

Traditional IRAs: Like a Roth IRA, a traditional IRA is a retirement savings plan.4 However, with this plan your pre-tax income is invested, and your contributions may be tax-deductible.6,7 Your earnings grow on a tax-deferred basis, but any withdrawals are taxed at your normal rate.6,7 Traditional IRAs also have a contribution limit of $6,500 per year or $7,500 per year if you’re over age 50. Check out the IRS website3 for more specific details around contributions limits.

Employer-sponsored retirement plans: If your employer offers a retirement plan, take advantage of it. This is an easy way to set money aside each pay period. And if your employer offers to match your contributions, try to at least contribute enough to get the full match. Missing out on matched funds is like missing out on free money.

There are many other ways to save for the future, so don’t be afraid to consult a tax professional or contact our Financial Life Planning team if you need help determining the best savings option for your situation.

Keeping Long-Term Savings Goals On Track During Inflation

June 2022 marked the largest increase in inflation since November 19812 and the squeeze on household budgets is impacting every category, from food to clothing to utilities. As you work through adjusting your budget for inflation, it’s tempting to cut back on saving toward your long-term goals. Before you do that, consider making other temporary cutbacks first.

Think about your needs versus your wants. When the world shut down during the height of the COVID-19 pandemic, many people saw a boost in their savings because they could only buy the essentials. Consider the costs that you cut back on or eliminated during this time. Would you be willing to cut back on these costs again?

If you need to reduce your savings to meet your monthly obligations, think of this as a temporary solution. Make it a goal to resume your retirement or savings contributions as soon as it’s possible. Remember that inflation is cyclical, and the market (most likely) isn’t going to stay this high forever.

Where Can I Go For Help? 

Make it a priority to review your long-term goals at least once a year. This yearly check-in will help you determine if you’re still on track and give you the opportunity to make any adjustments. It’s also a good time to review your income and increase your savings contributions if you can (especially if you received a raise at work).

 If you need help with retirement planning, estate planning, college planning, or even budgeting, the Lake Trust Financial Life Planning team is here to help. We work with people at all stages of life to create personalized savings plans to help our members meet their goals. Contact us to make an appointment.

For help with managing debt, student loans, housing costs, or your credit, remember that you can connect with our partners at GreenPath™ Financial Wellness3. This is a great resource to learn more about conquering your debt and getting your finances back on track.

 Knowing that your financial future is secure can eliminate unwanted stress from your everyday life. And help increase your financial wellbeing, or your feelings toward your finances in relation to your goals. There’s power in all of us to create a brighter financial future. For ourselves. Our families. And our communities.

SEE ALSO: 7 Easy Ways To Help You Reach Your Savings Goals | 9+ Practical Tips To Adjust Your Budget For Inflation


This post was previously published on September 29, 2022 and was updated on January 23, 2023.


1Jones, Jeffrey. More in U.S. Retiring, or Planning to Retire, Later. (2022, July 22). Gallup. Retrieved from


2U.S. Department of Labor. U.S. Bureau of Labor Statistics. (2022, July 18). Consumer prices up 9.1 percent over the year ended June 2022, largest increase in 40 years. Retrieved from


3Third party website. Lake Trust Credit Union is not responsible for the content, availability, security or compliance of any linked third party websites. In addition, the site's privacy policies may differ from those of Lake Trust.


4Securities offered through LPL Financial, Member FINRA3/SIPC3. The investment products sold through LPL Financial are not insured Lake Trust Credit Union deposits and are not NCUA insured. These products are not obligations of Lake Trust Credit Union and are not endorsed, recommended or guaranteed by Lake Trust Credit Union or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible. Lake Trust Credit Union and Lake Trust Financial Life Planning are not registered broker/dealers and are not affiliated with LPL Financial.


5The Roth IRA offers tax deferral on any earnings in the account. Withdrawals prior to age 59 1/2 or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws may change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.  


6Contributions to a Traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 1/2 may result in a 10% IRS penalty tax in addition to current income tax.


7This website may contain concepts that have legal, accounting and tax implications. It is not intended to provide legal, accounting, or tax advice. You may wish to consult an attorney, tax advisor or accountant regarding your specific situation. No representations are made as to the accuracy of the information contained herein or any information contained in any link provided herein.


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