Your Guide to Retirement Savings by Age

Whether you’re a new college graduate or a seasoned professional, a secure retirement is likely on your mind. However, everyone takes their own path to get there. No matter where you are on your retirement savings journey, there are steps you can take today to manage your 401(k) and plan for your future.

You should always speak with your financial advisor about your investment decisions, since there aren’t clear-cut rules for retirement savings by age. So, see these tips as a general decade-by-decade retirement planning guide to help you make informed financial decisions.

Retirement Planning in Your 20s: Set the Foundation

Your 20s is a decade of milestones. Move into your first apartment, graduate college, and often, get your first job. As you set the foundation for your life, it’s time to set the foundation for your retirement.

• Open a retirement account. If you have access to a retirement plan through your employer, now might be a good time to opt in to a 401(k) or similar account. Young employees can kickstart their retirement savings by taking advantage of their employer match from the start. Employer not offering a retirement plan? Consider researching other options, like an individual retirement account (IRA).
• Learn about investing. Your 20s is also a great time to start learning about investing (perhaps through an online course or research) and meet with a financial advisor for the first time. Understanding the ins and outs of investing and financial planning can help you make your money work for you.

Remember, starting your retirement savings journey at the beginning of your career is a proactive way to kickstart your future.

Retirement Planning in Your 30s: Keep Your Momentum

This decade looks different for everyone, but everyone can continue prioritizing their retirement savings. Whether you’re raising your first child or backpacking around Europe, there are steps you can take to continue your retirement planning journey. If you haven’t yet started a retirement account, now is the time to do so. Otherwise, consider these tips.

• Reevaluate your contributions. Are your 401(k) allocations working for you? If you’ve been saving for a decade or more, it may be time to check in with your investments and see if you’re in line to meet your retirement goals. Get in the habit of logging into your online 401(k) account and speaking with financial experts about your allocations.
• Get clear on your financial goals. Speaking of goals, your financial hopes may look much different than they did a decade ago. Are you saving for your first home? Starting a college fund for your children? Planning for your dream vacation? Your 30s can be a great time to start setting financial goals and making a clear plan to reach them.
• Remember to roll over your account. Taking the next step in your career? Be sure to roll over your 401(k) if you switch jobs. If you need help with that process, the knowledgeable team at ePlan is here to help.

No matter how much momentum your savings have gained, it never hurts to keep tabs on your 401(k). Retirement might feel far away, but you’re helping your future self by taking your savings seriously.

Retirement Planning in Your 40s: Prioritize Your Goals

As you reach your 40s, retirement feels more tangible than it has in the past. You might even know at which age you’re likely to retire. This age can vary, but your 40s is a time to see if you’re on track (and course correct if you’re not!).

• Discuss retirement with your partner. If you married your partner in the past decade or two, now is the time to align on your financial goals (if you haven’t already!). Discuss your goals for retirement, along with other savings goals you may have. Compare your retirement accounts and consider whether the balances have you on track for the future you desire.
• Prioritize your retirement savings. During your 40s, you might be juggling several financial goals at once: saving for your children’s college tuition and upsizing your home, for example. Through it all, try to keep prioritizing your 401(k) contributions. Letting your contributions slip could put you behind on your retirement.
• Adjust your contributions as necessary. Depending on your career trajectory, you may be making more money in your 40s than you have in the past. This may be the right time to increase your 401(k) contributions and give your retirement account more momentum.

It’s also possible that you haven’t saved in your 20s and 30s, so you’re using this decade to get started. Remember, it’s always the right time to save for retirement.

Retirement Planning in Your 50s: Get Organized

With retirement just over a decade away (for many, at least!), it’s time to get a clear picture of what your post-career life will look like.

• Map out your retirement income. Your income in retirement will look different than your bi-weekly paycheck, likely including multiple sources. You’ll want to get a clear picture of how you’re going to fund your retirement. For example, if you’ll be living off of your 401(k) savings, social security payments, and your spouse’s pension, tally up how much income you’ll be taking home per month. You may notice areas where you’ll need to save more over the next decade.
• Talk to your children about your financial plans. If your children are young adults, it’s time to loop them into your financial planning conversations. This will provide your family with peace of mind over the decades to come. Double check that all your accounts have beneficiaries assigned to them and discuss estate planning with your children and other close relatives.

Your 50s may be the first time that you can say exactly when you’ll be able to retire. However, your retirement year likely depends on many circumstances. Continue checking in with your team of financial professionals, so you can maintain a clear picture for the future.

Retirement Planning Over 60: Prepare for a New Chapter

When your retirement years arrive, it’s time for some much-needed relaxation (and perhaps some adventures). As you turn the page on this new chapter, there are some steps you can take to prioritize your financial security.

• Check in with your financial advisor. As you prepare for retirement, you’ll likely need to make key financial decisions about your income and savings and whether your asset allocation is appropriate for your retirement income needs. Consider sitting down with your financial advisor to discuss the years ahead and rebalance your investment portfolio. They’ll provide guidance on how to handle your money as you enjoy your retirement.
• Remember your RMD’s. The IRS requires account holders to start taking required minimum distributions (RMD’s) at age 73. Once you turn 73, you’ll need to start withdrawing this money by April 1 the following year and continue doing so on an annual basis. If you don’t take your RMD’s, you can face tax penalties.
• Prepare for Social Security and Medicare. Social Security payments and Medicare are other factors to consider as you enter your 60s. Calculate how these programs fit into your entire financial picture, even if you plan to work throughout your 60s.

Retirement may be anywhere from a few months to a few decades away. However, it’s never too early or late to start planning for a comfortable future. The dedicated 401(k) professionals at ePlan have the tools and education you need to manage your investments and understand your retirement outlook.

This content is for educational purposes only, is not intended to provide specific legal advice, and should not be used as a substitute for the legal advice of a qualified attorney or other professional. The information may not reflect the most current legal developments, may be changed without notice and is not guaranteed to be complete, correct, or up-to-date.