Retirement planning can be overwhelming for most people, especially when you don’t know where to start. But the important thing is that no matter what age you are, it’s never too early or too late to get started. In this blog post, we will provide an informative guide on how investors should adjust their retirement plan based on the decade of life they’re in – from 20-29 all the way through 70 and beyond. Here are decade-by-decade strategies for saving and investing throughout your career so you can retire comfortably. 

In your 20s, a little adds up: As start your career, retirement is far from your mind. But this is when you can be most aggressive with investments since you won’t need your savings for decades.

Another benefit of starting early is compound earnings. This is when the money you’ve earned on money you’ve invested begins generating earnings too. Investing a small percentage of your income can really pile up over time.

Also, financial obligations may be lower in your 20s than when you marry, buy a home, or have kids. If your employer offers one, try to save enough to receive the full match.

If your employer doesn’t offer a retirement plan, consider an individual retirement account (IRA) and begin investing for your future.

In Your 30s, don’t spend it: If you haven’t started, start your retirement savings now. Waiting could mean you have to save more of your income later to have enough.

In this decade, you may change jobs or take on obligations like home ownership. It’s tempting but don’t withdrawal your retirement savings except for a true emergency. Cashing out means paying taxes plus a tax penalty for using retirement dollars too soon.

Plus, the money you withdraw no longer benefits from that valuable compound earnings benefit we mentioned above.

In Your 40s, add 1% each year. While your income is likely higher now, your financial demands may have increased too. Resist the temptation to spend more. The less you spend the more you can invest for your retirement future.

This is a good time to make a habit of “adding 1%” to your savings rate each year. Remember, money saved is money you pay yourself.

This is a good time to check progress. Use a retirement calculator to estimate when you can afford to retire.

If you have kids, you might be thinking about college savings. Remember, you can take a loan for many things but not for retirement. So put yourself first. A financial coach can help you prioritize competing demands.  

In Your 50s and 60s: Social Security and Medicare

As you close in on retirement, it’s important to know if you’re on track to hit your goal. If you haven’t already, now is the time to begin fine-tuning your retirement plan.

If you got a late start to the savings game, do your best to save as much as you can. Once you reach age 50, Uncle Sam allows you to save even more in 401ks and IRAs through a catch-up contribution.

You can begin taking withdrawals from your IRA and 401(k) at age 59½ without the extra 10% penalty. But just because you can doesn’t mean you should. Talk to an advisor before taking money out to be sure you understand how your retirement plans might be affected.

Get retirement ready by building emergency savings, paying down debt, and planning ahead for medical needs. Since Medicare doesn’t start until age 65, you may need to think about how you’ll pay for health insurance if you plan to retire before.

This is also a good time to think about your strategy for collecting Social Security. Here again, just because you can collect at age 62 doesn’t mean you should. In fact, you get an 8% pay raise each year you wait to collect.

In Your 70s

If you’re still working, it may be out of choice rather than necessity. While you’re working, you won’t have to worry about required minimum distributions (RMDs).

But when your working days are behind you, make sure you know when your will be forced to take RMDs from your retirement funds. The age at which you are forced to begin taking distributions is based on your date of birth. If you’re not sure, talk to an advisor.

If you are enjoying the results of your retirement savings efforts, congratulations! But the planning is not done yet. Talk to an advisor about asset protection, estate planning, charitable giving, and legacy planning.


This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Please contact your financial professional for more information specific to your situation.