What to do at any age to make sure you’re on the road to retirement

Select’s editorial team works independently to review financial products and write articles that we think our readers will find useful. We may receive a commission if you click on links for products from our affiliate partners.

There is undoubtedly a lot to consider when it comes to managing our personal finances. We keep track of our spending, savings, investments, debt, and even the ups and downs of ours credit-worthiness.

Ensuring we’re on the right path to retirement may not seem like such an urgent need, but it’s arguably the most important aspect of our finances to keep track of. After all, you don’t want to find out that you’re not financially ready to stop working just before your time off.

Choose spoke to Andrew Meadows, Senior Vice President Ubiquitous Retirement + Savings, on what you can do each decade to ensure you retire at 67.

In your 20s: Save as much as you can

your 20s are a financially difficult decade. You’ve just graduated from college, maybe on student loans, and you’re starting a new lifestyle that involves paying rent, utility bills, and more, all with a starting salary.

If you’re just starting out, you might find that retirement feels like life in the future,” says Meadows. “But don’t waste your biggest savings asset: time.” The sooner you start investing money in your future, that more it can grow.

Start depositing a percentage of your paycheck into a 401(k) every pay period if your employer offers one. Many employers too match your posts up to a certain percentage.

“You might not be maximizing your contributions, but if you’re saving at least enough to maximize your business match, you’ll feel like you’re on the right track,” says Meadows.

Your goal by the age of 30: Save 1x your salary. This benchmark includes the money in your savings, retirement accounts, business allowances and your investments.

What if your employer doesn’t offer a 401(k)?

IRAs are a great alternative to a 401(k), and you can set up recurring transfers from every paycheck so you never have a chance to save for retirement.

When looking for an IRA, choose an account that has no minimum deposits and offers a variety of investment options. Some top providers are: Karl Schwab, Loyal Investments, vanguard and E*TRADE. Or consider a Robo Advisor that offers IRAs and/or Roth IRAs, like wealth front or improvement, both of which create a customized investment portfolio based on your personal goals.

In your 30s: Save more

As you get older, advance in your career, and earn a higher salary, you’ll probably be able to save better than you could in your 20s. Take this opportunity to get involved more until your retirement with every bonus, raise or promotion at work.

“You know you’re on the right track when you’re able to contribute during this game and start moving closer to maximizing the amount you save,” says Meadows. experts suggest with the aim of saving at least 15% of your gross salary.

Your goal by the age of 40: Save 3 times your salary.

In your 40s: Watch your spending

Your expenses are likely to increase in your 40s as you start a family and take on big things like a mortgage. The key is to continue contributing to your retirement as you always have, but keep an eye on your new expenses to make sure they don’t eat up your progress.

Paying for your child’s college years can make a big dent in your retirement savings later on. Establish higher education savings by investing in a 529 account where your earnings and withdrawals (if used for qualifying educational expenses) are tax free.

Your goal by the age of 50: Save 6 times your income.

In your 50s: Go through the details

Your 50s are a great time to start tackling the details of financing your retirement. Meadows suggests using these years to create a draft for a budget and a list of possible outputs. Perhaps soon-to-be retirees would like to consult a financial planner who can help to create an individual plan.

When you turn 50, don’t forget the extra boost to your savings catch-up contributions. “Catch-up posts in 401(k)s are there because maybe you didn’t save enough in the previous 20 years,” says Meadows. Employees aged 50 and over can make an additional contribution $6,500 per year in their 401(k) and another $1,000 in her IRA.

Your goal by the age of 60: Save 8 times your income.

In Your 60s: Reevaluate

“Now that you’re in your 60s, it’s a critical time to make sure you’ve saved enough,” says Meadows. When you realize you haven’t, it can be worth taking last-minute steps that can save you a significant amount of money, such as: B. Downsizing your lifestyle.

Matt Rogers, a CFP and director of financial planning Electronic Money Advisor, also suggests getting one Social Security Estimate by the Social Security Administration to confirm expected benefits. “This will help set expectations and make plans more realistic,” says Rogers. “It is often estimated that Social Security replaces 30% to 40% of pre-retirement income.” Also, remember to verify that retirement plans and annuities list the correct beneficiary.

Remember, it pays to delay Social Security. Although you can start receiving benefits at age 62, you are entitled to 100% benefits at full retirement age. wait until 70 means that your benefit amount increases even further.

Your goal until retirement at the age of 67: Save 10x your income.

Track your retirement with these finance apps

e-money Financial planning and mobile wellness app, attraction, is a helpful tool for tracking retirement savings and comparing current retirement savings to multiples of income based on age.

the personal capital The budgeting app is another popular option among retirement savers. Personal Capital is not just a simple budgeting app, it also acts as an investment tool that links to your bank accounts and credit cards, as well as IRAs, 401(k)s, mortgages and loans. The money tracking dashboard makes it easy to get an overall view of all your personal finances in one place.

Editorial note: Any opinion, analysis, review, or recommendation expressed in this article is solely that of Select’s editors and has not been reviewed, approved, or otherwise endorsed by any third party.

Comments are closed.