Smart Retirement Planning Tips for Each Decade of Your Life


1. In your 20s

Chances are high that you graduated with a lot of debt from college. You’re probably not thinking much about retirement because you’re only at your first or second job and earning entry-level pay. The truth is, it’s a crucial time to save for retirement. See our tips below:

  1. Aggressively try to pay down all your debt, including your student loans. Having debt hanging over your head will make it hard to save for retirement.
  2. Pay all your bills on time and limit credit card spending. Don’t make silly money mistakes that might cost you in the long run.
  3. Contribute enough to get a full match from a 401(k) if your employer offers that benefit. In fact, consider all the benefits that your job offers.
  4. Open a Roth IRA if you don’t have a workplace retirement plan.

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2. In your 30s

A potential decade of debt because in your 30s you might want to start a family or buy a home. There are many expenses that might affect your ability to save for retirement, but you must continue to make saving for retirement a priority.

  1. Start saving more and continue to keep your debt down. You’re probably earning more money, which means you need to increase your retirement contributions. It’s even more pertinent if -- like a lot of people -- you didn’t do much saving for your retirement in your 20s.
  2. Don’t be fooled into keeping up with the Jonses. It’s not worth it. You should make saving for retirement a priority in your 30s -- yes, even ahead of saving for your kids’ college. You target should be to save at least 10 percent of your income.
  3. Set aside financial windfalls like bonuses or tax refunds to your retirement savings.
  4. If you didn’t open an IRA in your 20s, do so in your 30s. If you did, can you contribute more this year? Also, consider other investments. Have you thought about mutual funds or ETFs?

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3. In your 40s

You’re inching closer and closer to your retirement and more than halfway there already. And yet one big worry is saving for your kids’ education. Your retirement is a bigger priority because your kids can borrow more for college, but what can you do if you run out of money in retirement?

  1. Continue to make saving for your retirement a priority, aiming to sock away 10-20 percent of your paycheck.
  2. Get serious about your investments. If you have an investment plan, now is the time to review it. If you haven’t thought about investing, talk with a financial expert to help you come up with a plan.
  3. If you haven’t made a will yet, now is the time to do it.
  4. Consider buying long-term care insurance now. You can save more money buying now than later and your chances of qualifying while you’re younger are greater, too.

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4. In your 50s

Retirement is just around the corner. Your earning power and ability to save should be at an all-time high, yet you might have expenses unique to the Sandwich Generation. Whether you are caring for a parent or helping an adult child, you should have some money saved by now and a retirement plan that you must update and review. Make sure you are on track to reach your retirement goals.

  1. You can try to make up for lost time by contributing more to your employer’s retirement plan and your IRA. Don’t assume your current contributions are enough.
  2. Boost your retirement savings beyond your retirement accounts. Do you need to supplement your retirement accounts with investments? Would making supplemental income help at this time?
  3. Have you thought about buying long-term care insurance? This is the time to do so.
  4. Get rid of all your debt. If you’ve still got high credit card debt or student loans you’re helping to pay off it’s time to get serious about paying that debt down. Your mortgage is a different beast, consider the pros and cons of paying it off before you retire.
  5. This is a decade where the unexpected might happen. Have you thought about what you’d do if you lost your job or had a medical emergency?

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5. In your 60s

If you’ve taken the proper steps to retire, you can finally sit back and relax in your 60s. Most of your big household expenses should be paid off and you should be at or near your peak in earnings. Before you retire, it’s time to assess and reassess your retirement needs.

  1. Review your retirement plan. By now you might have some idea of the age you want to retire. Use a retirement calculator to crunch some numbers and see how much you need to save to reach your retirement goals.
  2. If you need to play catch-up with your retirement savings, keep in mind the IRS limits the amount you can contribute to your retirement plan or investments.
  3. Would it help to put off retirement for a couple more years? If you’re not going to reach your retirement goals in time, putting off retirement for a year or two might help.
  4. If you’ve got a partner, have you thought about what he or she would do if you passed away? Don’t forget about creating a safety net in case either partners passes.
  5. Keep your will up to date, making sure you’ve chosen beneficiaries for your various policies and accounts. Also, keep your documents organized and in order.

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6. In your 70s and beyond

Retirement planning doesn’t stop just because you’ve retired. You should also have an in-retirement plan to make sure that your needs are all met.

  1. Protect your retirement savings. The last thing you want to do is go broke in retirement because of poor planning. This means you should still create a realistic budget including things like discretionary spending as well as emergency funds to cover unexpected expenses.
  2. Think about how long you might live. Do you have enough saved to live off of for 20 or 30 more years? Consistently think about your retirement withdrawal rate.
  3. Review your estate planning strategies. You’ll want an estate plan that protects you, your partner, and heirs. With your plan, make sure your your assets go to the designated people.
  4. Update your powers of attorney, continue to plan for long-term care for you and your spouse, and keep your documents updated.

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