Retirement Planning by Age and Life Stage
The Key Decisions That Shape Your Retirement Years
Saving for retirement plays a key role in long-term financial independence and peace of mind. While retirement may feel far away—especially early in your career—starting to plan in your 20s can make a meaningful difference over time. As life changes, your retirement strategy should evolve with it.
You should aim to save multiples of your annual salary for retirement, with general benchmarks being 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67, though these are guidelines and can vary based on lifestyle and goals, with saving 10-15% of your income annually often recommended
This decade-by-decade guide offers general savings benchmarks and practical tips to help you stay on track, no matter where you are in your financial journey.
Your 20s: Build the Foundation
Your 20s are the ideal time to establish strong financial habits. Start by building an emergency fund that covers three to six months of essential expenses. This safety net can help protect you from unexpected costs and reduce the need to rely on debt.
If your employer offers benefits such as a 401(k) retirement plan, tuition reimbursement, or wellness incentives, consider taking advantage of them as early as possible. A common benchmark by the end of your 20s is to have saved the equivalent of one year of your salary.
Your 30s: Gain Momentum
In your 30s, retirement planning often shifts from simply getting started to building consistency. A common savings goal during this decade is three times your salary.
This is also a good time to take a closer look at outstanding debt and create a plan to pay it down while continuing to save. Balancing debt reduction with retirement contributions can help strengthen your overall financial picture.
Your 40s: Plan with Purpose
Your 40s are a critical time for long-term planning. Look for ways to grow your income, whether through career advancement, additional education, or new professional opportunities.
It’s also important to be cautious about taking on new debt and to avoid financial decisions that could create unnecessary risk. By the end of your 40s, many people aim to have saved about four times their salary.
Your 50s: Prepare for the Transition
As retirement comes into clearer focus, savings goals typically increase. By the end of your 50s, a common target is eight times your salary.
This is a good time to review your expenses and identify opportunities to reduce costs. That may include cutting everyday spending or making larger changes, such as downsizing your home or reassessing major financial commitments.
Your 60s: Shift into Retirement
In your 60s, retirement planning becomes more about transition. Creating a retirement budget that reflects your new income, expenses, and priorities is an important step.
You’ll also want to carefully consider when to begin receiving Social Security or pension benefits. Starting earlier may result in smaller monthly payments, while waiting until full retirement age can increase your benefit. Around this stage, many people aim to have saved approximately ten times their salary.
Your 70s and Beyond: Stay Engaged
Retirement is meant to be enjoyed, but financial planning doesn’t stop once you retire. Maintaining an active investment strategy can help support long-term income needs.
Market ups and downs are a normal part of investing. Staying focused on long-term goals is often more beneficial than reacting to short-term market changes.
What If You’re Behind on Retirement Savings?
If you feel behind, you’re not alone. According to Bankrate, 57% of American workers say they are behind on their retirement goals*. The good news is that progress is still possible. Even small adjustments to how you save and invest can help you move closer to your goals over time.
Best Ways to Save for Retirement
1. Employer-Sponsored Retirement Plans (401(k)
For many people, a 401(k) is one of the most effective tools for building retirement savings. These plans are designed for long-term growth and often include employer contributions.
2025 contribution limits:
- Under age 50: up to $23,500
- Ages 50–59: up to $30,500
- Ages 60–63 (and 64+): up to $34,750
Key benefits include:
- Potential tax advantages
- Tax-deferred growth
- Employer matching contributions (often 3–6%)
Planning tips:
- Contribute at least enough to receive the full employer match.
- Aim to save 10–15% of your income if possible.
- Increase contributions as your income grows by “banking” raises and bonuses.
2. Health Savings Accounts (HSA)
If you’re enrolled in a high-deductible health plan, an HSA can be a valuable supplement to retirement savings.
HSAs offer a triple tax advantage:
- Contributions may be tax-deductible
- Funds grow tax-free
- Withdrawals for qualified medical expenses are tax-free
After age 65, withdrawals for non-medical expenses are allowed (subject to income tax).
Planning tips:
- Contribute as much as you can and invest the balance when possible.
- Consider paying current medical expenses out of pocket to allow your HSA to grow.
- Use HSAs as a supplement—not a replacement—for retirement accounts.
3. Individual Retirement Accounts (IRA)
IRAs are available to anyone with earned income and can help you save beyond employer plans.
2025 contribution limits:
- Under age 50: up to $7,000
- Age 50 and over: up to $8,000
- Traditional IRAs may offer a tax benefit today, with withdrawals taxed in retirement.
- Roth IRAs use after-tax contributions, but withdrawals in retirement are generally tax-free and not subject to required minimum distributions.
Planning tips:
- Roth IRAs may be beneficial if you expect higher taxes in retirement.
- Traditional IRAs may help if you need tax relief now.
- IRAs can help diversify your retirement strategy alongside a 401(k).
Strategies to Boost Retirement Savings
- Bank raises and bonuses: Redirecting extra income to retirement savings can significantly increase long-term growth.
- Negotiate your salary: Even modest increases can have a lasting impact when consistently saved.
- Automate contributions: Automatic savings and annual increases help keep progress steady.
- Stick to a realistic budget: Balance is key—consistency over time matters more than aggressive, short-term changes.
Need Help Planning for Retirement? Talk to a financial advisor.
Financial advisors can analyze your savings, investments and retirement goals to create a personalized plan. Many financial advisors can also help you optimize your tax strategy, which can potentially save you thousands of dollars over time.
Set up an appointment with a professional U1 Financial Advisor to learn more about saving for retirement, IRAs or investing.
This material is provided for educational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities or engage in any specific investment strategy. All mentions of taxes refer to federal tax law. State tax treatment may vary. Please consult a tax professional regarding your specific situation.
Securities, including those held in HSA accounts, are:
NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE
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