Retirement Steps by the Decades


Your approach to retirement savings should change as you get older and your life changes. You’ll make adjustments to how much you invest and where you invest it. You’ll invest more as you gain experience and earn more. There are some things you need to do in each decade of your adult years to make sure you’re on the right track to enjoy your retirement dream. Steps to Take in Your Twenties

You’ll make some big life decisions in your twenties. You’ll probably decide your career, where you’ll live, and who you’ll marry. You can also make one of the best decisions of your life by setting up your retirement account early and putting money in it every month. If your company offers a 401(k) program, put money in it, especially if they offer employer matching! You need to put aside 15% of your income for retirement.

The wonder of compound interest will pay off huge if you’ll begin saving now. Here’s what I mean: If you invest just $200 a month from age 25 to 65, your retirement account will top $1 million. That’s what discipline and $200 a month can do.

If you’re like a majority of college graduates, you also have some student loan debt and credit card debt. Get rid of it all before you start investing. Once you’ve knocked that out, you can invest without debt hanging around your neck, dragging you away from your future retirement.

What to Do in Your Thirties

In these years, you’re typically focused on building your family and career. You should also build on your retirement plan. Take this decade to make decisions about your future and decide how to get there. You can’t keep telling yourself that retirement is a long way off and that you can just plan for it later.

If you didn’t start retirement in your twenties, you still have time. If you invest $200 a month from age 35 to 65, you’ll still accumulate more than $400,000. And if you bump that amount to $400, you’ll be over $850,000! That’s totally doable!

You’ll be tempted to get caught up in the comparison trap. You may try to compete with other people over where you live, what you wear and what you drive. Don’t worry about everyone else. Remember, the typical American is broke and swimming in debt!

Feeling the Pressure in Your Forties

Let me be honest. In your forties, you’ll begin to feel the pressure of planning for retirement. It’s not some distant possibility. If you haven’t been saving for retirement, get started now! And get serious about funding it! This kind of intensity means making some tough choices. I’m talking stay-cations, the occasional extra job and older-model used cars. You get the idea.

Let’s say you make $56,000 a year. Your recommended 15% monthly contribution to retirement would be $700. If you invested that amount from age 45 to 65, you’d have over $500,000 for retirement. If you kept working until age 70, that bumps up to over $900,000. If you invested $1,000 a month, your nest egg would hit over $1.3 million if you worked until age 70. Congratulations!


The Ticking Clock in Your Fifties

When you hit this milestone, you can hear the clock ticking down. If you’re on track, you’ll likely get a little more conservative in your investments to protect the money you’ve earned. If you’re behind, or if you haven’t started saving for it yet, don’t throw in the towel. You’ll need to change your perspective and make serious sacrifices, but you can still fund a comfortable retirement.

For instance, you may need to work past age 65. This gives you more time to invest, and it maxes out your Social Security benefits. Also, get creative about finding more money to put away. If you own your house, you could downsize and put the extra money away for retirement. Make some extra money with a garage sale. Every dollar matters!

Retirement Planning in Your Sixties and Beyond

If you’re in your sixties with no savings, you’ll need to radically adjust your expectations. You may not retire a millionaire, but you can still live comfortably if you get on a plan. Keep working as long as you’re healthy. Max out any 401(k) contributions and use “catch up” options for Roth IRAs. Delay taking Social Security until 70 and sign up for Medicare to help with medical costs.

At every age, you need a retirement plan—and you need to stick to it. Stay away from debt. Meet with your financial advisor regularly. Avoid the comparison trap. Be on guard against scams that promise quick wealth. And remember, even in retirement, you need to make and follow a monthly budget. It keeps your spending in check so you can live comfortably in your retirement years.

A popular and dynamic speaker on the topics of personal finance, retirement and leadership, Chris Hogan helps people across the country develop successful strategies to manage their money, both in their personal lives and businesses. His new book, Retire Inspired: It’s Not an Age. It’s a Financial Number, releases in January 2016. You can follow Chris on Twitter at @ChrisHogan360 and online at