Retirement Savings: Strategies by Age

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What we'll cover:

  • In your 20s: Aim to save 10-15% of your income, pay down debt, budget and live within your means.
  • In your 30s: Keep up those good habits, avoid lifestyle creep and think about other expenses.
  • In your 40s: Prioritize saving for yourself, picture what retirement looks like.
  • In your 50s+: Nail down the details and think about how you’ll turn your savings into income.

Saving for retirement. We all know we should make it a priority and that the earlier we start the better.

The challenge is that saving for the future can feel so distant – life gets in the way, so saving takes a back seat. But no matter your age, life stage, or the many things you’re juggling, saving for your future should be a top priority.

When it comes to saving for retirement, there may be times where you feel like you’re behind or aren’t doing enough. That’s okay. The main thing is to do what you can given your circumstances. A lot of the fundamentals and tips covered in this article are simple and more importantly, achievable.

One quick note: Keep in mind that when it comes to your money and saving for retirement, it’s always a good idea to consult a financial advisor if you have questions.

Start here: Determine how much you’ll need for retirement

This is probably the hardest and most daunting part because there are so many unknowns. You don’t know how long you’ll live. You don’t necessarily know when you’ll retire – even if you have a target age, it may come sooner or later than you think.

You also don’t know what sort of healthcare costs you or your loved ones might incur. Your location and lifestyle will impact this number. Point is: You just don’t know, and not knowing can be scary.

So what do you do? There are several retirement planning calculators out there that will try and factor in some of the variables (retirement location, lifestyle, wage inflation, etc.). There’s also a basic rule of thumb that you’ll need 80% – 100% of your pre-retirement income each year once you retire. In other words, once you retire, you’ll need to have access to 80% - 100% of what you made immediately prior to retiring.

Going with this rule, let’s say you retire at 65 with a $150,000 annual income. For this example, let’s use 90% as the percentage of your income you’ll need in retirement. Take that $150,000, multiply it by 0.90, and $135,000 is the annual income you’ll need in retirement. That’s well over $3 million if you live to 90.


Whatever you do, don’t just wing it and hope that you’re saving enough.


Do some research, crunch your own numbers and figure out a ballpark goal. Even a range is fine, but having some real, actual numbers is a critical first step. Whatever you do, don’t just wing it and hope that you’re saving enough. You may also want to think about bringing in a financial advisor to work with you on your retirement planning.

Saving for retirement in your 20s

Start by establishing good habits and making retirement a priority. How you manage your finances now will shape much of how you handle finances in your future, and you want to build off a solid foundation. Time is on your side, and the more you save early on, the more compound interest will work in your favor.

Maybe this section is for your kids (or grandkids), and if so, help them by reinforcing good habits.

Things to do:

  • Create a budget and live within your means.
  • Within your budget, aim to save 10 – 15% of your income for retirement. If you can’t do this, just start by saving what you can. Even saving a small percentage will go a long way.
  • Establish an emergency fund.
  • Try to pay off your debt. Start with paying down any high-interest debt. If there are other accounts that you can easily pay off, try tackling those too.

Things to know about: 

  • Your retirement plan options. (e.g., 401(k) and IRAs ). Understand the basic account types, including the potential benefits, tax implications as well as contribution limits and rules for each.
  • The fundamentals of investing. Make sure your portfolio has the right mix of aggressive (stocks) and conservative (bonds) investments. When you’re young, you probably want to be investing more aggressively (meaning your portfolio should be mostly stocks) because you’re likely far away from retirement. As you get older, you’ll probably start to gradually shift your portfolio to be more conservative.

Bonus points:

  • Automate your retirement contributions through payroll deductions or scheduled transfers.
  • Figure out if you can enroll in auto contribution increases so that you can reach that 10% – 15% goal.
  • Consider target date funds. These let you set a target retirement date (e.g., 2060) and will automatically rebalance your mix of stocks and bonds to align with that date.
  • Consider life insurance. Even if no one is financially dependent on you now, buying life insurance when you’re young and healthy is generally less expensive than waiting to buy, when your premiums may be higher.

Saving for retirement in your 30s

By this point in your life, you’re likely earning more than you were in your 20s. It’s also the point in your life where your obligations – financial and otherwise – can start to expand.

It’s easy to spend a lot of money trying to maintain a certain lifestyle, but don’t let the allure of keeping up with the Joneses (or what you see on Instagram) tempt you from saving for your future. Make sure saving for retirement remains a top priority.

If you’re behind (or just getting started): First, don’t panic. Even if you start now, compound interest can still work in your favor and help you reach your retirement goals. Make sure you understand the fundamentals covered above and then set aside a greater percentage of your salary for saving if you can.

Things to do:

  • Revisit your budget with big life changes – marriage, mortgage, kids – and adjust accordingly.
  • Avoid lifestyle inflation and getting into debt.
  • Make sure you’ve built a solid emergency fund, and keep adding to it.
  • Ramp up your 401(k) contributions, ideally to the maximum allowed each year. For example, in 2024, the standard maximum annual contribution limit is $23,000. If you can’t contribute the maximum, gradually start to increase your contributions over time (look into auto increases). Even small increases can make a big difference. If you change jobs, don’t cash out of your 401(k) – you’ll pay hefty fees. Consider your rollover options.

Things to know about: 

  • 529 plans. These can be a good option for saving for your kids’ college education. 529s are college savings plans that typically come with tax-advantages.
  • IRAs. These can be an additional way to add to your retirement savings if you’re already maxing out your 401(k).

Bonus point:

Saving for retirement in your 40s

Your responsibilities in your 20s and 30s probably seem like a cakewalk once you hit 40. For some in this age group, you might find yourself in the stressful position of having to take care of both your own children and your aging parents. And when you’re taking care of everyone else, it’s easy to neglect taking care of yourself – but try your best not to.

If you’ve built good habits, keep going!

If you’re behind (or just getting started): Know that you’re not alone. If cutting your budget only does so much, think about ways you could increase your earnings – ask for a raise, look for a higher paying job or consider another income stream (rental properties, side gigs, etc.).


"With a little math and a lot of discipline, you can set yourself up for a comfortable future."


Things to do:

  • Continue to do all the things you did in your 30s – especially staying out of debt. Don’t let new costs, like paying for your kids’ college education, be an excuse for borrowing from your 401(k).
  • Take a broad view of your overall financial picture. Look beyond your current 401(k) to other investments or retirement savings from previous employers.
  • Start to think about what your retirement looks like. Consider things like your health, where you want to live, what type of support you plan on providing for your family, and how you want to spend your time. If working longer is part of your plan, think about how that impacts your finances.

Things to know about: 

  • IRS rules. These are inherently complicated, but it helps to know some of the basic rules and tax implications that apply to your retirement plans. Consider talking to a financial advisor if you have tax planning questions.
  • Life and disability insurance. Both can help financially protect your family in the event that something happens to you and you are no longer able to provide for them. Make sure you understand the details of your plan and that you’re appropriately covered.
  • Beneficiaries. You can have beneficiaries for the multiple plans you have in place – your 401(k), IRA, life insurance, etc. Know the rules for each, and make sure you have your beneficiaries listed.

Bonus points:

  • Consider opening a Health Savings Account (HSA) if you haven't already. HSAs are tax-advantaged savings accounts that can help cover qualified medical costs.
  • If you’re already maxing out your own retirement contributions, think about setting up an IRA for your kids. As long as your child has earned income (be it babysitting or lifeguarding), either you or your child can contribute to that IRA.

Reaching your goal starts with saving for it.

Saving for retirement in your 50s (and beyond)

Retirement probably doesn’t feel so distant now that you’re in the homestretch. And while you might still have a ton of priorities you’re juggling, keep focusing on your future. Your perspective on it will gradually start shifting from building your savings to accessing your savings. Of course your money should continue to work for you, but as your retirement age inches closer, you’ll need to figure out how to live off your nest egg.

If you’re behind (or just getting started): Take a deep breath. Be realistic about your retirement goals and when you plan on retiring. It’s possible that you may need to work longer to meet those goals. The most important thing you need to do is start saving more if you can.

Things to do:

  • Think about your retirement income needs. Figure out how much you have saved in total, know where your money is going now, and be realistic about what your future looks like.
  • Factor in your health. Medical costs (including the unexpected ones) and any healthcare savings you have.
  • Pay down debt. The big one here is likely your mortgage – do what you can to pay it off, so you can put that money toward retirement instead.
  • Take advantage of catch-up contributions. Once you turn 50, the IRS allows you to contribute an additional amount to your 401(k) and IRA. Catch-up contributions are subject to change each year - always visit for the most up-to-date information.

Things to know about: 

  • Retirement withdrawal strategies and required minimum distributions. Withdrawal strategies can vary from person to person depending on their circumstances. Talk to your financial advisor to understand how you’ll be “paid” in retirement.
  • Social Security benefits. Understand the details and consider delaying Social Security until you can take advantage of the full benefits.

Bonus points:

  • Once you’ve made it to retirement, enjoy yourself. Permanently turn off your alarm and take a vacation.
  • And then share your wisdom with your kids and grandkids so they can master their retirement planning as well.

A timeless strategy: Figure out your number, then save - and keep saving

Remember: No matter your age, start by calculating a general estimate of your retirement needs. Then save accordingly, evolving your strategy as you age.

Retirement can be nearly a third of your life, and you probably want to enjoy it. If you spend as much time financially preparing for retirement as you do dreaming about what you’ll do with it – be it traveling the world or playing 18 holes a day – you’ll head into your golden years with confidence and a (hopefully) healthy nest egg.

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