Your Retirement Checklist for Every Age

Before you know it, the future will be knocking on your door. So no matter your age, there are steps you can take today to better prepare for your future. Use this checklist to help build a strong retirement strategy.

In your 20s: Now’s the time to establish good habits

  • Start Saving—Create a budget and stick with it. Take advantage of your employer match by saving at least 4% of your salary in your retirement account. Need help with your budget? Hundreds of apps and online budgeting tools are available to make budgeting easy and fun. Try Google “budgeting apps” to get started.
  • Put the power of compounding to work for you. Compounding growth, which is “financial speak” for when the earnings on your money earn money, and then that money earns money, and so on, can help you reach your retirement goals. The earlier you start saving, the more you’ll benefit from compounding growth.

In your 30s: More things competing for your money

  • Save for your future. Whether you’re saving for a down payment on a house or for your child’s future education, there are likely more things competing for your money than when you were in your 20s. However, it’s still important to save as much as you can and give yourself peace of mind by creating an emergency fund to cover your expenses for three to six months.
  • Create an investment strategy. Because retirement is a long way off, you can invest more aggressively, with a greater concentration in stocks and less in bonds and other more stable assets. Check out Basics of Retirement Investing to learn more.

In your 40s: Might be your prime earning years, but also your prime saving years

  • Save as much as you can. Before the age of 50, the IRS lets you save up to $18,000 annually before taxes in your retirement savings account. If that amount is out of reach, save as much as you can today. Then commit to increasing your contribution rate by 1% each year. By doing this, you could be saving 10% more by the time you reach your 50s.
  • Make sure you’re on track. Log on to your Account and use the Project Retirement Income tool to check your account status and make sure your retirement savings are on track.

In your 50s: Make the most of the catch-up contribution

  • Max out your savings. One benefit of being in your 50s is that, beginning in the year you turn age 50, the IRS lets you save more in your retirement savings account through a “catch-up contribution.” For 2017, you can save an extra $6,000 before taxes in catch-up contributions. That means you can save up to a total of $24,000.
  • Pay attention to asset allocation. In general, the closer you get to retirement, the more conservative your portfolio should be. But, financial experts recommend you continue to invest in some stocks, because your portfolio needs to grow to help your savings last through retirement. A rule of thumb to determine the appropriate stock-to-bond ratio is to subtract your age from 100 to determine the appropriate level of stock your portfolio should have. For example, a 55-year-old should generally have 45% in stocks (100 – 55 = 45), with the rest in bonds or fixed income investments.

In your 60s: Check your retirement readiness

  • Ask yourself if you’re ready. Before you decide on your retirement date, consider whether you’re ready both financially and emotionally to move into this next stage of your life. Your retirement could last more than 20 years so it’s important you consider your options.
  • Review your investment portfolio as a whole. This includes not just your benefits from the AHRP, but plans from previous employers, IRAs, real estate, investments, and personal savings. Learn about Social Security and Medicare and how these may be additional resources for your retirement.

Remember, whether your retirement is far in the future or just around the corner, it’s never too early to begin planning and saving.