Retirement might seem far away, but the earlier you start planning, the easier it becomes. Each decade brings new challenges—and new chances—to grow your savings. You don’t need to do everything at once. You just need to take the right steps for where you are now.
Whether you’re fresh out of school or a few years from retiring, there’s always something you can do to set yourself up for success. Here’s a guide to retirement planning at every stage of life.
In Your 20s: Build the Habit
Start Small, Stay Consistent
The most powerful tool you have in your 20s is time. Even small amounts invested early can grow into something big. Start by opening a retirement account like a Roth IRA or contribute to your employer’s 401(k), especially if they offer a match.
You don’t need to max it out right away. Even $25 a paycheck adds up. The key is to start now and make saving a habit. Automatic contributions make it easy to stay on track without thinking about it.
Learn the Basics
Your 20s are the perfect time to learn how retirement accounts work. Understand the difference between a Roth and a traditional IRA. Learn how compound interest helps your money grow. The more you know now, the better decisions you’ll make later.
Avoid lifestyle inflation, even if your income increases. Keep your expenses low and your savings high. These habits will set the tone for decades to come.
In Your 30s: Build Momentum
Increase Contributions
By your 30s, your income may be more stable. That means it’s time to increase how much you save. Aim to contribute at least 15% of your income toward retirement. That can include employer contributions, too.
If you haven’t started yet, it’s not too late. Start now and ramp up your savings as quickly as you can. You still have time on your side—but every year counts.
Balance Your Goals
Your 30s often come with competing priorities—kids, mortgages, student loans. But don’t put off retirement planning entirely. Create a budget that gives space for both short-term needs and long-term goals.
Consider using tools like target-date funds, which automatically adjust your investment mix as you age. These can help you stay invested without having to manage every detail yourself.
In Your 40s: Catch Up and Fine-Tune
Assess Your Progress
Your 40s are a turning point. Retirement is no longer just a distant goal. It’s something you can see on the horizon. Take a close look at your retirement accounts. Are you on track to meet your goals?
Use online calculators or work with a financial advisor to check your numbers. If you’re behind, don’t panic—but do take action. Catch-up contributions for retirement accounts start at age 50, but you can still boost your savings now.
Revisit Your Investment Strategy
Your risk tolerance might change as you get older. Make sure your investments reflect that. You still need growth, but you may want to reduce some risk. Diversify your portfolio and review your asset mix regularly.
Also, make sure you’re not carrying high-interest debt. Paying off that debt frees up money you can redirect into retirement savings.
In Your 50s: Get Serious
Maximize Contributions
Once you turn 50, the IRS allows catch-up contributions to retirement accounts. That means you can contribute even more to your 401(k) and IRAs. Take advantage of this window to boost your savings.
Now is also a good time to think about your ideal retirement age. Will you retire at 60, 65, or later? Knowing your timeline helps you plan more precisely and set a clear savings target.
Plan for Healthcare
Healthcare costs can eat up a big chunk of your retirement budget. Start looking into options like a Health Savings Account (HSA) if you qualify. HSAs offer triple tax benefits and can be a great way to prepare for medical expenses down the road.
Also consider long-term care insurance, especially if you have a family history of health issues or plan to retire early.
In Your 60s and Beyond: Prepare to Transition
Review Your Withdrawal Plan
As retirement gets closer, your focus shifts from saving to spending. Develop a withdrawal plan that helps your money last. Consider when you’ll claim Social Security and how that affects your monthly income.
Talk to a financial advisor about strategies to minimize taxes on your withdrawals. The goal is to keep more of what you’ve worked so hard to save.
Keep an Eye on Risk
Even in retirement, your money needs to grow. But now’s the time to limit big risks. Review your investment mix and reduce exposure to high-volatility assets. Your focus should be on stability and steady income.
Also make sure your estate plan is in order. Update your will, review beneficiaries, and set up any needed powers of attorney or healthcare directives.
No matter your age, the best time to plan for retirement is now. Start with what you can, build on it over time, and keep your goals in sight. A solid plan doesn’t happen overnight—but every step brings you closer to the retirement you want.
