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Retirement Savings Tips by Age

Retirement Savings Tips by Age

By Matt Diehl • November 04, 2019

You’re never too young — or too old — to save for retirement. If you could use some tips for your age group and beyond, here are some suggestions to build or strengthen your retirement savings plan:

Planning for retirement in your 20s

  • Explore your retirement plan options – If your employer offers a pension or 401(k) plan, speak with your manager about whom to talk to about retirement planning. If not, or if you are self-employed, there are still plenty of retirement plan options to choose from.

  • Start saving early – Compound interest can be a retirement account’s best friend. Even if you only contribute a small amount to start, the sooner you begin saving money, the sooner interest can start growing on it.

  • Make a budget (and stick to it) – Budgeting is a great way to support both long-term and short-term savings goals. Once you find a budgeting style that works for you, make it a habit and never look back.

  • Create an emergency fund – If a major, unexpected expense occurs, it could cause you to stop saving or eat into your retirement funds. By building an emergency fund, you’ll have liquid cash ready for these costs in a separate savings account.

Planning for retirement in your 30s

  • Contribute to your retirement plan often – If you have a 401(k) through work, schedule to have a percentage taken out of each paycheck, especially if you have an employer match. If you set up a retirement plan outside of work, such as a Traditional IRA or Roth IRA, automate a consistent deposit schedule based on when you receive income.

  • Pay down debts – High-interest debt can cost you thousands over the years. To put that money toward retirement, not interest payments, try these tips to pay down loans faster that also apply to credit cards and other debt.

  • Balance other new saving goals – Wedding. House. College fund. No matter what new savings goals you create, remember to prioritize your retirement savings plan.

  • Consider investing – Supplementing your retirement savings with investments could be a smart move. And nowadays, you don’t need to be rich to invest. If you’re unfamiliar with the stock market or investing, you should speak with a financial advisor or investment professional beforehand.

Planning for retirement in your 40s

  • Max out your 401(k) and IRA contributions – If your budget allows, put as much money toward your retirement contributions as possible. Starting in 2019, anyone under 50 years of age can contribute up to $19,000 to a 401(k) plan and $6,000 to a Traditional and Roth IRA.1

  • Revisit your retirement strategy – Like many things in life, retirement plans can change. Take a second look at your current strategy and future goals and adjust if necessary.

  • Consider long-term care insurance – Someone turning 65 today has an almost 70% chance of needing long-term care services in their remaining years.2 And if you pay for these costs out of pocket, it could drain your savings. To learn more about long-term care insurance, check out these tips on planning ahead before the age of 50.

  • Discuss plans for your parents – 1 in 5 middle-aged adults have provided some amount of financial support to a parent older than 65 years.3 If you anticipate your parents or in-laws needing financial assistance, discuss their potential needs and assess how it may impact your own retirement planning.

Planning for retirement in your 50s and 60s

  • Take advantage of 401(k) Catch Up Contributions – Once you hit your 50s, you can put an extra $6,000 into your 401(k) each year in excess of the standard limit. Known as the Catch Up Contribution, this rule allows people closer to retirement to speed up their saving efforts.

  • Explore ways to lower expenses – Look at your spending and find ways to put more money into your savings account. Examples include paying off your mortgage, reducing transportation costs, cutting out vices and evaluating your life insurance.

  • Strategize your Social Security – Holding off to claim Social Security benefits until the age of 70 can really pay off. You can file as early as age 62, but if you wait until full retirement age (currently 66), you’ll get 33% more than at age 62.5.4 If you wait until age 70, you’ll get 76% more than at 62.5

  • Do a retirement “practice run” – Schedule one month to live on your planned income and spending allowances. This can help you see what works and make any necessary adjustments before it becomes everyday life.

Save now, enjoy later

Whether retirement is a few decades or a few years away, following a plan can help you reach your goal. And remember — you’ll thank yourself later for being so responsible now!

1. Internal Revenue Service. “401(k) contribution limit increases to $19,000 for 2019; IRA limit increases to $6,000.” (accessed October 7, 2019).
2. “How much care will you need?” (accessed October 11, 2019).
3. Crawley, Mary. “4 Smart Money Moves for Your 40s.” (accessed October 8, 2019).
4. Clark, Jane Bennet. “5 Money Moves in Your 50s as You Ramp Up to Retirement.” (accessed October 8, 2019).
5. Clark, Jane Bennet. “5 Money Moves in Your 50s as You Ramp Up to Retirement.” (accessed October 8, 2019).

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