October is National Retirement Security Month, making it a good time to think about what retirement planning looks like at different stages of life.
At 25, retirement may feel decades away. At 45, you may be balancing retirement with a mortgage, children or aging parents. By your 60s and 70s, the conversation often shifts from accumulating money to deciding how to use, manage and ultimately transfer what you have built.
There is no single retirement strategy that works for every age or every person.
The better question is:
What deserves your attention right now?
In Your 20s: Start Building the Habit
Retirement may not feel urgent when you are establishing your career, managing student loans, building an emergency fund or simply adjusting to adult expenses.
Your advantage, however, is time.
If you have access to a workplace retirement plan, understand how much you are contributing, whether your employer offers a match and how your contributions are invested.
You do not need to start with a huge amount. Building the habit gives you something to grow as your income and financial life evolve.
In Your 30s: Make Sure Your Plan Grew With You
By your 30s, the retirement contribution you selected years ago may no longer reflect your current life.
Maybe your income increased. Maybe you changed employers, bought a home, started a family or took on new financial responsibilities.
This is a good time to revisit how much you are saving, review accounts from previous employers and make sure your beneficiaries are current.
Retirement planning should not stay frozen while everything else changes.
In Your 40s: Connect the Pieces
Your 40s can come with competing financial priorities: retirement, college planning, a mortgage, career changes and supporting family members.
Rather than looking at your retirement account in isolation, begin connecting it to the rest of your financial picture.
How much have you accumulated? How is it invested? What other responsibilities could affect your ability to save?
It is also worth beginning to define what retirement means to you. A clearer destination makes it easier to determine whether your current strategy supports it.
In Your 50s: Turn the Goal Into a Plan
As retirement gets closer, the conversation becomes more specific.
When might you want to retire? What could your lifestyle cost? What income sources might you rely on? How will healthcare fit into the picture?
This is also a useful time to review whether your investment strategy still reflects your timeline and comfort with risk.
The goal is not necessarily to make dramatic changes simply because you reached a certain age. It is to make sure your investments, savings and future income needs are working together.
In Your 60s: Prepare for the Transition
For many people, the 60s mark the transition from saving for retirement to living from what you have built.
That makes planning for income increasingly important.
Consider when you expect to begin drawing from retirement accounts, how Social Security may fit into your plan, what healthcare costs could look like and whether your investment mix still supports both near-term spending and longer-term needs.
This is also a good time to review your estate plan, including your will, beneficiaries, powers of attorney and other documents that help communicate your wishes.
Roth conversions may be appropriate once you’re not earning to avoid large required minimum distributions, which will ultimately affect your tax bracket and Medicare costs in retirement.
In Your 70s: Manage What You’ve Built
Retirement planning does not stop once you retire.
For many people in their 70s, required minimum distributions, or RMDs, become part of managing retirement accounts. Traditional IRAs and many employer-sponsored retirement plans are subject to RMD rules once the applicable age is reached. Under current federal rules, that age is generally 73 for many current retirees, with age 75 applying to later cohorts beginning in 2033. IRS
This stage is also an important time to continue reviewing your investments. Your portfolio may need to support current income while still providing for a retirement that could last many years.
And if your estate plan has not been reviewed recently, make sure your documents, beneficiaries and wishes still reflect your current circumstances.
Your Retirement Plan Should Keep Evolving
Retirement planning is not one decision you make in your 20s and revisit when you turn 65.
It changes as your career, income, family, priorities and needs change.
In one decade, the focus may be simply starting. In another, it may be increasing contributions. Later, it may be creating income, managing required distributions or making sure the wealth you have accumulated is transferred according to your wishes.
Whatever stage you are in, the goal is the same: understand where you are, know what deserves your attention next and keep your plan connected to the life you actually want to live.
Schedule a complimentary introduction consultation with one of our financial planners today to get started on your retirement journey, we meet you where you’re at.
*Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.