Saving for retirement checklist: How to save at every age

September 16, 2022

This checklist can help guide your retirement savings strategies in your 20s, 30s, 40s, 50s, 60s and 70s.

Saving for retirement at 20

Your 20s are important when it comes to setting yourself up for a financially strong retirement. Why? Time is on your side. At this stage, you can take advantage of compound interest — interest earned on the initial investment money and on the interest that investment accumulates.

401(k). Start funding a 401(k) if your employer offers one, especially if your employer matches your contributions. You can currently contribute up to $19,500 if you’re under 50.

Traditional IRA. If you don’t have the option to open a 401(k), consider an individual retirement account (IRA). The current maximum contribution is $6,000 if you’re under age 50. With a traditional IRA, keep in mind you’ll be taxed when you withdraw your funds.

Roth IRA. Another option is a Roth IRA. With a Roth IRA, you’re taxed upfront but not when you withdraw your funds, which can help you maximize your tax savings later on. The current maximum contribution is $6,000 if you’re under age 50.

Preparation. Begin building an emergency fund. The general rule of thumb is to have at least six months' worth of your household income set aside for emergencies.

Wage growth. Use pay raises to bump up your 401(k) or IRA contributions.

Saving for retirement at 30

You’ve likely established your career, and possibly bought property, gotten married and had children. You’re more confident in your earning potential and long-term goals.

Debt payments. Pay off higher interest debts, including college loans and credit cards. The money you free up can be put toward retirement savings.

Considerations for children. If you have or are planning on having children, consider a college savings plan to put money aside for education without affecting your retirement savings.

Increasing contributions. Max out or boost contributions to employer-sponsored retirement plans; aim to set aside at least 10-15% of your pre-tax earnings for retirement.

Review fees. Different retirement accounts have different fees and expenses. You may want to work with a financial professional to streamline your portfolio’s fee structure.

Plan consolidation. If you’re changing jobs, check if you have the option to rollover any previous employer-sponsored plans into an IRA to avoid penalties.

Insurance, part 1. Now is the time to get life insurance if someone, such as a child, depends on your income.

Saving for retirement at 40

Retirement is no longer an abstract idea. You’re likely in your prime earning years, so if you’re just starting to save, do so aggressively. Time is still on your side.

Retirement contributions. If you haven’t already, consider meeting with a financial professional to help ramp up retirement planning, including maxing out contributions to retirement plans and coming up with an exact dollar amount for your final goal.

Large purchases. You might be considering a move to a larger home, remodeling your current home, buying a vacation home or other large purchase. Make sure to factor in your retirement plan when determining the impact of this purchase on your long-term savings.

Saving for retirement at 50

Retirement is just up ahead. It may be a good time to re-evaluate your investment strategy to align with your time horizon and feelings toward risk.

Contribution strategies. Take advantage of catch-up contributions. Individuals 50 and older can contribute an extra $1,000 to IRAs and $6,500 extra to a 401(k).

Risk adjustments. You may want to consider shifting your portfolio to more conservative stocks to capture growth while minimizing risk. Think about adding more bonds or other relatively safe investments.

Remaining debt. Talk with a financial professional about paying off any remaining debts, such as a mortgage, to see if that’s a good option for you.  

Insurance, part 2. Research insurance options such as disability and long-term care to safeguard your retirement nest egg from unexpected events.

59 1/2. At 59 1/2, you can start withdrawing from an IRA without penalty; if you don’t need it, avoid doing so. You likely want to save it for retirement.

Preparing for retirement at 60

Retirement is nearly here. At this stage, you have an opportunity to make final adjustments.

Income needs. Plan your monthly income stream for retirement. Make sure you consider taxes, life expectancy, additional income sources and your investment portfolio in your retirement withdrawal strategy.

Social Security. Calculate when you should start drawing Social Security benefits. The longer you can wait to withdraw, the higher the monthly payment you’ll receive.

Modifications. You may want to continue adjusting your portfolio’s asset allocation into more conservative investments. As a potential hedge against inflation, however, consider retaining some aggressive positions that offer the possibility of higher returns.

Employment. Not sure there’ll be enough cash? Think about ways to keep earning in retirement, such as consulting in your current field or part-time work, if necessary.

Estate planning. Review your will and other key documents with your attorney, ensuring your wishes are accurately reflected.

Living in retirement at 70

Wondering about that IRA and employer-sponsored retirement plan you’ve been growing for decades? At age 72, you’ll need to start taking mandatory withdrawals.

Budgeting. Consider consulting a financial professional if you have any budgetary concerns as you adjust to living in retirement. 

Communication. Have important financial conversations with family members about estate planning including wills, trusts and beneficiaries.

Analysis. If you haven’t already done so, consider moderating aggressive positions in favor of a more conservative investing strategy. But don’t overdo it. Some investment growth can help offset your drawdown of retirement accounts, so you remain funded throughout your retirement years.

Relaxation. Lastly, remember to enjoy your retirement! You’ve earned it.

 

Learn how we can help you plan and prepare for retirement.

Related content

7 ways for pre-retirees to get ready for retirement

How to build wealth at any age

Key milestone ages as you near and start retirement

Start of disclosure content

Investment and insurance products and services including annuities are:
Not a deposit ● Not FDIC insured ● May lose value ● Not bank guaranteed ● Not insured by any federal government agency.

U.S. Wealth Management – U.S. Bank | U.S. Bancorp Investments is the marketing logo for U.S. Bank and its affiliate U.S. Bancorp Investments.

The information provided represents the opinion of U.S. Bank and U.S. Bancorp Investments and is not intended to be a forecast of future events or guarantee of future results. It is not intended to provide specific investment advice and should not be construed as an offering of securities or recommendation to invest. Not for use as a primary basis of investment decisions. Not to be construed to meet the needs of any particular investor. Not a representation or solicitation or an offer to sell/buy any security. Investors should consult with their investment professional for advice concerning their particular situation.

U.S. Bank, U.S. Bancorp Investments and their representatives do not provide tax or legal advice. Each individual's tax and financial situation is unique. You should consult your tax and/or legal advisor for advice and information concerning your particular situation.

For U.S. Bank:

U.S. Bank does not offer insurance products but may refer you to an affiliated or third party insurance provider.

U.S. Bank is not responsible for and does not guarantee the products, services or performance of U.S. Bancorp Investments, Inc.

For U.S. Bancorp Investments:

Investment and insurance products and services including annuities are available through U.S. Bancorp Investments, the marketing name for U.S. Bancorp Investments, Inc., member FINRA and SIPC, an investment adviser and a brokerage subsidiary of U.S. Bancorp and affiliate of U.S. Bank.

U.S. Bancorp Investments is registered with the Securities and Exchange Commission as both a broker-dealer and an investment adviser. To understand how brokerage and investment advisory services and fees differ, the Client Relationship Summary and Regulation Best Interest Disclosure are available for you to review.

Insurance products are available through various affiliated non-bank insurance agencies, which are U.S. Bancorp subsidiaries. Products may not be available in all states. CA Insurance License #0E24641.

Pursuant to the Securities Exchange Act of 1934, U.S. Bancorp Investments must provide clients with certain financial information. The U.S. Bancorp Investments Statement of Financial Condition is available for you to review, print and download.

The Financial Industry Regulatory Authority (FINRA) Rule 2267 provides for BrokerCheck to allow investors to learn about the professional background, business practices, and conduct of FINRA member firms or their brokers. To request such information, contact FINRA toll-free at 1-800‐289‐9999 or via https://brokercheck.finra.org. An investor brochure describing BrokerCheck is also available through FINRA.

U.S. Bancorp Investments Order Processing Information.