Retirement Planning: Steps to Take in Your 20s, 30s, 40s, and Beyond

Retirement planning is a lifelong process. The earlier you start, the more time your money has to grow. Here are some key steps to take in each decade leading up to retirement:

In Your 20s

Start saving. Even if you can only contribute a small amount, get into the habit of saving for retirement. Take full advantage of any 401(k) match from your employer.

Choose the right investments. At your age, stocks and other more aggressive investments make sense for long-term growth potential. Consider target date funds that adjust over time.

Control debt. Avoid racking up credit card debt and work to pay off student loans. The less debt you have, the more you can invest for the future.

Build your career. Switching jobs can often lead to increased income. Seek opportunities to advance your skills and earnings potential.

Review your budget. Track where your money is going each month to identify areas to cut back on. Funnel any savings into retirement.

In Your 30s

Increase contributions. Boost your 401(k) or IRA contribution rate. Try to save at least 10-15% of your income for retirement.Consider other savings vehicles. Look into a Health Savings Account if offered by your employer. Open a Roth IRA for tax-free growth.

Check your asset allocation. Rebalance your portfolio to make sure you have the right mix of stocks, bonds and other investments.

Buy a home. Homeownership can help build net worth over time. Factor mortgage payments into your budget.

Protect your income. Disability insurance provides income if you can’t work. Review beneficiaries on any life insurance policies.

In Your 40s

Review retirement projections. Use online calculators to see if you’re on track with your retirement savings goals. Increase contributions if needed.

Take advantage of catch-up contributions. Beginning at age 50, you can contribute an extra $6,500 per year to 401(k)s and $1,000 more to IRAs.

Assess your risk tolerance. With a longer time horizon still ahead, some market risk may be acceptable. But be ready to dial down risk as you near retirement.

Pay down debt. Prioritize eliminating any high-interest credit card balances. Have a plan for paying off your mortgage before retirement.

Think about healthcare costs. Review Medicare options and account for out-of-pocket medical expenses in your financial plan.

In Your 50s and Beyond

Fine-tune your withdrawals. Work with a financial advisor to develop a withdrawal strategy that maximizes social security and pension benefits.

Consider annuities. These insurance products can provide guaranteed lifetime income to help cover essential expenses.

Shift to conservative investments. Move more of your portfolio from stocks into bonds, cash and other stable assets.

Review beneficiary designations. Make sure your 401(k), IRA and life insurance beneficiaries are up-to-date.

Discuss long-term care. Look into options like long-term care insurance to protect against unexpected elder care costs.

The key is to continually adapt your retirement planning strategy as your life and career evolve. Consistent saving, smart investing and thinking long-term are sure to pay off.