Planning for retirement is a lifelong endeavor – and you are never too young or old to start. Your goals might differ depending on which stage of life you are in, but saving some form of money over time is critical. Regardless of your age, there are strategies and options available to help you work towards a successful retirement.

In Your 20s to Early 30s

Saving for retirement in your early career can position you to retire on time and live a comfortable life. At this point, retirement planning can be as simple as saving money and starting a 401(k).

Many companies have options to match your 401(k) contributions, which can make a dramatic difference in determining how much money you put away for retirement.

“At Fidelity, we always talk about targeting fifteen percent,” says John Boroff, director of retirement and cash management at Fidelity. “That is aspirational for a lot of people, especially younger people who are just getting into the workforce. But they should be saving as soon as they can, and that’s based on the power of compounding over time and the fact that savings in your twenties are more valuable than any other time.”

If contributing 15 percent of your salary to a 401(k) is not doable, Boroff says to start with a smaller amount. From there, commit to a one percent increase of your salaried contributions each year. This strategy builds savings without interrupting daily expenses.

“That one percent increase does not impact your paycheck as much as you might think it could,” Boroff says.

Retirement may seem like a far-off decision if you are in your twenties, but saving for it now can also mean less work later.

“People who don’t start for the first five or ten years increase the likelihood that they might have to work to their mid-to-late 60s or even early 70s,” says Justin Chidester, CFP®, AFC®, and founder of Wealth Mode Financial Planning.

Young people also deal with challenges that older generations may not have experienced, such as concern about the future of Social Security. Social media also plays a psychological role in how individuals view their peers’ lifestyles.

“The social media age has created a ‘keeping up with the Joneses’ atmosphere that goes beyond what the generation before had,” Chidester says. “Social media has just expanded how you can compare yourself to others, subconsciously or consciously.”

These issues may impact your interest in saving money now when it’s popular to do what everyone else is doing. Still, smart decision-making – and consistency – are key habits in preparing for retirement.

In Your Late 30s to Early 50s

Whether you started retirement planning in your 20s or not, you can make up for lost time through your 30s and 50s – the peak earning years of your life.

“If you didn’t start as early as you would have liked or didn’t have the information you needed when you were in your twenties or early thirties, this is your opportunity,” Boroff says. “Make up some of that ground when you’re in those peak earning years.”

Here, you can build on the foundation you have started and begin to move your portfolio in a conservative direction. Or, if you prefer, you can stay aggressive in the early portion of these years since there is still a significant buffer of time between you and retirement.

Did You Know?
About 48 percent of households headed by someone 55 or older in 2019 lacked some form of retirement saving.

As you approach your 50s, consider the specific post-retirement lifestyle that you’d like for yourself. You’ll want to answer the following questions:

  • Where do you want to live?
  • How much discretionary spending do you need?
  • Do you plan to travel a lot?

Joint Planning for Couples

If you have a spouse with their own income, begin looking at ways to complement your retirement planning together.

“Couples don’t always plan together as well as they could, and the way to go about it is collectively,” says Boroff. “Joint planning and awareness are probably going to put you in a much better place than planning individually … the power of dual incomes and planning together is significant.”

It would help if you considered any expenses that will still exist as you near retirement, like paying off your mortgage and what impact that will play on your finances in the future.

In Your Late 50s and 60s

You’ve made it to the final stage of retirement planning. Here, you will hopefully have decades of compounded money saved. You can further protect your retirement by removing any risk from your portfolio.

For example, during the 2008 Financial Crisis, those impacted by portfolio loss early in their careers had time to rebuild, while anyone operating an aggressive portfolio near retirement was unable to regain what they’d lost.

“That’s a difficult situation, so you want to be conscious of the amount of risk in your portfolio,” Boroff says.

Address Income Gaps Now

The late 50s and beyond are also a time to decide what year that you will retire and how that decision will relate to when you take Social Security.

The full retirement age for anyone born after 1960 is 67, so you’ll need a plan in place to address potential income gaps if you retire before then.

“We typically recommend waiting until full retirement age, which for most people is now 67, to take Social Security,” Boroff says. “If you’re targeting something before that, then there has to be a bridge to Social Security. If you’re targeting something after that, it makes the decision of when to take Social Security a lot easier because you’re still working, so you don’t need to take it early.”

If you can’t retire before 67 or still need a steady paycheck after you retire, remote work is a convenient option to earn money without the stress and expenses of a traditional office role.