Retirement Savings: Strategies by Age

January 15, 2025

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Many of us know that it’s important to save for retirement and that the earlier we start, the better. But sometimes life can get in the way, and our savings goals can take a back seat to other more immediate priorities.

There may be times when you feel like you’re behind or aren’t doing enough. First, don't be too hard on yourself - saving for retirement takes time and discipline. The key thing to remember is to do what you can given your circumstances.

Ahead, we'll go over a few retirement savings tips that are relatively simple and, more importantly, achievable no matter what stage of life you're in.

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

This is probably the most challenging step 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 make retirement planning a daunting task.

So what can 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.

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.

Keep in mind that this is just a basic example. It's important to do some research, crunch your own numbers, and figure out a ballpark goal that's realistic for you. Even a range is fine because planning your retirement with some actual numbers is a critical first step. Whatever you do, don’t just wing it and hope that you’re saving enough.

Good to know: Everyone's financial situation is different, so 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 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 consider

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:

Set yourself up for success by automating your finances. Here are some ways to do that:

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

At this stage, you’re likely earning more than you were in your 20s. It’s also the point in your life where your obligations – financial and others – can start to expand. This is where putting together a financial plan can help you stay on track for your goals, avoid lifestyle inflation, and make sure saving for retirement remains a 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 in the previous section and then set aside a greater percentage of your salary for retirement if you can.

Things to consider

Revisit your budget if there have been big life changes – marriage, mortgage, kids – and adjust accordingly.
Avoid lifestyle inflation.
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. 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, you don't have to cash out your 401(k) plan. 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 potential tax benefits.
IRAs. These can be an additional way to add to your retirement savings if you’re already maxing out your 401(k).

Bonus point

Explore other ways to make your money work for you. If you’re maxing out your 401(k) and IRA, consider putting additional funds into savings accounts – such as a high-yield savings account or a certificate of deposit – or into a traditional brokerage account. Learn more: Saving vs. Investing.

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 can be easy to forget about yourself and your priorities.

If you’ve built good habits in your earlier years, 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 for passive income, etc.).

Things to consider

Continue to do all the things you did in your 30s – keep paying down debt (if any) and avoid borrowing from your retirement accounts. Keep in mind that retirement funds are for your retirement years, and withdrawing money early from these accounts could result in tax and penalties.
Take a broad view of your overall financial picture. For instance, update your net worth and check in on your financial plan to make sure you're still on track for your retirement goals.
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 may impact your finances.

Things to know about

IRS rules. Taxes can be 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. Insurance can help protect your family financially in case 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 designate beneficiaries for the multiple plans you have in place – your 401(k), IRA, life insurance, etc. Know the rules for each, and remember to review your beneficiary designations each year to make sure they reflect your wishes.

Bonus points

Consider opening a Health Savings Account (HSA) if you haven't already. HSAs are tax-advantaged savings accounts that can be used to 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.

See savings options

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 number of competing priorities you’re juggling, keep focusing on your future. Your focus will gradually start shifting from building your savings to accessing your savings. Your money should continue to work for you, but as your retirement age inches closer, you’ll need to figure out how to manage your retirement income.

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 consider

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 IRS.gov 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. Do what you love - whether that's traveling or spending more time with your family and loved ones.
If you have kids and grandkids, share your financial wisdom with them, so they, too, can master their retirement planning.

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

Remember: No matter your age, start by getting 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'll want to enjoy it without having to worry about money. Early planning can go a long way to help you build a healthy nest egg, so that you can head into your golden years with confidence.

This article is for informational purposes only and shall not constitute an offer, solicitation, or recommendation. This article was prepared by and approved by Marcus by Goldman Sachs® but is not a description of any of the products or services offered by and does not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA, or any of their affiliates, subsidiaries or divisions. Goldman Sachs Bank USA is not providing any financial, economic, legal, accounting, tax or other recommendation in this article and it is not a substitute for individualized professional advice. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice. Information contained in this article does not constitute the provision of investment advice by Goldman Sachs Bank USA, or any of its affiliates, none of which are a fiduciary with respect to any person or plan by reason of providing the material or content herein. Neither Goldman Sachs Bank USA, nor any of its affiliates make any representations or warranties, express or implied, as to the accuracy or completeness of the statements or any information contained in this document and any liability therefore is expressly disclaimed.