Tools to help you prepare for retirement at every age

The best age to plan for retirement? Your age right now. Set certain goals for retirement savings by age group and you could find yourself on track in every decade for your post-work life.

Multi-generational family gathered to have a photo taken.

These practical planning and savings by age group tips for retirement can help you make progress toward the financial retirement life you want, no matter where you are on your journey.

Retirement planning and savings in your 20s

  • Establish a budget. Tracking your planning for financial goals and retirement in stages helps you create and achieve savings goals, avoid overspending and channel your money into the things that matter to you. It also reveals wiggle room later as priorities change.
  • Maximize your match. If your employer matches contributions to a 401k, aim to contribute enough to meet that full company match amount. It's like free money.
  • Save now to gain later (aka the magic of compound interest). Put away $5,000 when you're 25 and it could grow to more than $425,000 by the time you're 65, thanks to compound interest. Wait until you're 45 and the same amount might only reach around $200,000.

Retirement planning and savings in your 30s and 40s

  • Set expectations as a family. "Start the conversations early on with your spouse and draw in your children along the way," says JJ Burns, a certified financial planner. That's especially true as you start saving for retirement and for goals, including college, cars and extra expenses, that affect your children in young adulthood. Can a state school work for college? Can your child take out a loan for some of the higher education costs or pay for insurance and gas on a vehicle? Who pays for grad school? Do you want your child to have some skin in the game? "Set a written path and execute it as a family team," says Burns.
  • Be proactive with protection. Regularly check in to make sure changes in your family, job and living situations are adequately covered. For example, if you're opening your own business, contact your local State Farm agent to discuss any additional policy needs you might have to help protect assets.

Retirement planning and savings in your 50s

  • Check the urge to overspend. "The attitude often is, 'I've worked all my life. Now it's my time,'" Burns says — but he's seen that spin out of control. Overspending on a second home, for example, can lead to repairs that obliterate a budget. "That big, over-the-top family event can also be a financial game changer," says Burns. "Once again, setting realistic expectations as a family can make all the difference." Maintain the budgeting habits you set earlier in life so that spending doesn't spiral out of control.
  • Plan for the unplanned. Bear in mind, too, that you might not get to choose when you retire. In a 2018 study, more than 50% of adults in their early 50s who worked full-time for a long-term employer  went on to experience an involuntary job loss. Only one in 10 ever returned to their previous income Focus on boosting an emergency fund, paying down debt or developing a secondary income stream in case you need a source of funds.

Retirement planning and savings in your 60s and beyond

  • Think long term. "You might be alive another 30 years," Burns says. A woman who reaches age 65 has a 71% chance of reaching her 80th birthday and a 34% chance of seeing age 90

    His advice: Stick with your budget and continue to focus on growing some of your assets. "Most people tend to protect too much in retirement," he says. "Be preservation-minded but growth-oriented."

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.
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