Savings Goals by Age

It’s never too early or too late to save smart. As your needs and lifestyle evolve over time, however, so should your savings goals. Here are a few ideas to think about as you and your family move from one stage to the next.

Children and teens

If you have children (or grandchildren), help them build good saving habits early. One way to get money habits to stick is through practice and encouragement. Think about how you can talk to your children about setting savings goals, which can be over the short term or long term. For example, a short-term goal could be saving for a game or something nice that they want. Long-term goals could be saving for a car or college.

Once they set down a goal or two, you may consider opening a savings account for your kids to help them work toward their goals. Encourage them to set aside a portion of their allowance each week (e.g., the idea of “paying yourself first”). You can also be a good role model and show them how you automatically save each month for your financial goals.

Look for opportunities to gradually introduce them to other fundamental financial concepts such as understanding the difference between wants versus needs, the importance of budgeting, and the idea of tradeoffs.

Young adults and college students

Young adults are likely learning to navigate having more personal freedom and making their own day-to-day money decisions. Continuing to practice and build smart saving habits now can help set you up for success down the road. For instance, learning how to create a budget can provide a picture of where your money is coming and going each month, which is a great way to practice better money management.

Savings goals may be modest during your college years, but every little bit helps and can add up over time. If you don’t already have a high-yield savings account, consider opening one. This is where you can put your money to work earning a competitive APY (compared to a traditional savings account).

Read more: Saving strategies for college students

Young professionals and families

At this stage of life, you may have noticed that your personal finances and money goals have become more complex. Your budget probably looks quite different now with additional monthly expenses to keep track of – recurring costs like rent, utilities, loans, etc.

Your savings goals may have also grown more ambitious – aiming to build wealth to buy your first home, pay for your child’s education, and secure your retirement.

As your needs expand, it might be hard to stay on track with your savings goals. One way you can stay organized is to consider opening multiple savings accounts for different goals.

For instance, setting aside a cash reserve in an emergency fund can help prepare you for any unexpected expenses resulting from a sudden job loss or medical emergency. A high-yield savings account can be a great place to park your rainy day fund.

You may also want to explore your certificate of deposit (CD) options and put together a CD strategy that makes sense for your goals – whether that’s saving for your down payment for a home or a dream vacation.

Don’t forget about saving and planning for your retirement as well. Even though your golden years may be decades away, the sooner you start, the better.

Read more: Savings strategies for young professionals and families

Near retirement

If retirement is around the corner, it’s a good time to fully fund those retirement accounts, especially if you haven’t been able to maximize your contributions every year.

The IRS offers individuals age 50 and older a chance to make catch-up contributions to certain retirement accounts, allowing you to save beyond the standard annual limit for 401(k) plans, IRAs, etc.

It’s also important to keep healthcare costs, including long-term care, in mind as you think about your retirement savings goals.

Good to know: As a general rule of thumb, you'll need to have about 80% to 100% of your final pre-retirement income to maintain your lifestyle when you're not working anymore.

Read more: Savings strategies for individuals near retirement

Smart tips for every age

No matter what you’re trying to save for, it’s important to understand how different types of bank accounts can help you reach your savings goals. You’ll likely find that you’ll need to use a combination of different savings vehicles for different goals.

As you put together your savings strategy, here are some general tips:

• Plan a timeline for your goals and see what kind of flexibility you need when it comes to accessing your savings.
• Look for savings accounts that offer a competitive APY and are FDIC-insured.
• Choose accounts with no monthly or transaction fees, so you can keep more of your hard-earned money.
• Automate your deposits whenever possible to help you save regularly and consistently.