Tips for Planning Your Retirement Across the Decades

The Long Run: Retirement Planning Across Your Career

Milestone birthdays are celebrated with good reason. They symbolize your transition into a new decade of goals and challenges, while offering perspective on the past. While age may only be a number to some, there’s no denying a difference between life at your 25th and 45th birthdays.

“At a basic level, retirement planning means acknowledging life’s progressive changes,” said Joe Correnti, senior vice president of brokerage product at Scottrade. “Following that plan will help to ensure that your financial circumstances at the end of your career have improved from its beginning.”

Get Started in Your 20s

Given the range of life events that tend to happen in your 20s, a cookie-cutter approach to retirement won’t work for everyone. You may pursue graduate school, get married, buy a home and start a family. If you let them, any of these events can have a profound impact on how you save for retirement.

Your top goal is simply to make saving a priority.

The entry-level salary that accompanies your first job after college might not leave much wiggle room for saving – especially given social demands – but every bit really does help. With compounding interest working in your favor, any market gains will work strongly to your advantage over time.

And if your employer will match a percentage of your retirement savings, not taking it is like leaving free money on the table.

Hit Your Stride in Your 30s

When your career takes you past the hand-to-mouth lifestyle of entry-level work, you’ll find it comparatively simpler to live within a budget. Your extra income will allow you to choose where you prioritize spending beyond the bare necessities.

If a job change happens along the way, rolling over your old retirement plan into an IRA will keep your money working for you no matter where you work. A health savings account (HSA) can provide an additional investment opportunity for qualified medical expenses.

Children may have entered your life, which means balancing your long-term retirement goals with their immediate needs and possibly future college expenses. Even if you’re still paying off your own student loans, Coverdell accounts can help you invest a little at a time while still following your retirement plan.

Life may get more expensive, but you’ll have more experience to deal with it.

Look Ahead in Your 40s

As a parent, your peak earning years are balanced against expenses like getting your children through school. You also may need to care for your own parents in some capacity. While you still have time to plan and adjust, it’s never too early to start thinking about your retirement picture.

How have you saved so far in order to meet your expected needs? If you’re behind on a goal, what can change to accommodate a comfortable retirement?

Generally speaking, your aggressive style that you use to build wealth in your 20s and 30s should start pulling back to a more conservative approach. Once you hit your 50s, preserving what you’ve built over your career should become the main focus of your plan.

Finalize Your Plan in Your 50s

Change might be the only constant in life, but by now you can probably have a pretty clear picture of your career path through retirement.

Uncle Sam provides extra benefits to investors aged 50 and older in the form of catch-up provisions for retirement plans. The additional savings can add up before you retire, helping to make sure that your finances align with your goals.

“Retirement isn’t just a sequential journey with age, but a series of adjustments to your experiences along the way,” said Correnti. “You can’t start saving early enough, but financial setbacks happen at any age, and it’s easier to recover with a dedicated plan.”

Read Next: We’ve outlined how to plan for your retirement, but financial planning for couples requires some additional considerations.

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