Retirement Planning by Decade

Retirement planning isn't a one-time event — it's a process that evolves throughout your career. What matters most changes with each decade of your life, and the strategies that work at 25 are different from those that work at 55.

Your 20s: Build the foundation

The most important thing you can do in your 20s is simply start. Even $100 per month invested at age 25 grows to roughly $350,000 by age 65 at an 8% return. Your 20s are about building the savings habit, capturing any employer 401(k) match (it's free money), and keeping your lifestyle inflation in check as your income grows. Benchmark: aim to have one year's salary saved by age 30.

Your 30s: Accelerate

Your 30s often bring higher income but also higher expenses — housing, possibly children. This is the decade to increase your savings rate, ideally to 15% of gross income including any employer match. Max out tax-advantaged accounts when possible. Benchmark: two times your salary saved by age 35, three times by age 40.

Your 40s: Course-correct

If you're behind, your 40s are the last decade where time is still strongly on your side. Aggressively increase contributions. Consider whether your asset allocation still matches your timeline. Many people in their 40s are also paying for their children's activities and education — resist the urge to sacrifice retirement savings for these costs. Benchmark: four times your salary by age 45.

Your 50s: Catch up and plan

At 50, you become eligible for catch-up contributions ($7,500 extra per year in a 401(k) as of 2024). Take full advantage. Start thinking concretely about when you want to retire and what that looks like. Model different scenarios — what if you work until 62 vs. 67? Benchmark: six times your salary by age 55, eight times by age 60.

Your 60s: Transition

Consider your Social Security claiming strategy — delaying from 62 to 67 or 70 significantly increases your monthly benefit. Plan your withdrawal strategy across different account types (taxable, tax-deferred, Roth) to minimize lifetime taxes. Make sure your portfolio allocation has shifted to include more stable investments as you approach and enter retirement.