Spotlight – Retirement Planning by the Decade


Retirement savings are important for everyone, no matter what their age. The earlier that you begin putting money away for retirement, the greater the chances are that you’ll be able to live the life you have dreamed of in retirement. For most people, Social Security is not sufficient on its own to cover everyday expenses during retirement. Its purpose is to replace a portion of your pre-retirement income, not the entire amount. A large majority of the working population is vastly underprepared for retirement. A 2019 survey from reported that 40% of the workers surveyed had no retirement savings at all, and around 64% reported that they had $10,000 or less in retirement savings.

No matter where you are in the retirement process—whether you are in your 20s or approaching 60—there are financial steps you can take to ensure that you are fully prepared for retirement. Here’s how you can prepare for retirement at any decade of your life:

Your 20s – Start Developing Good Habits

While most people in their 20s are thinking very little about retirement—if at all—it is an important period in your life in terms of helping you to establish good financial habits and to set yourself up for financial success in the future. Now is the time to set aside just a little bit of money from your paycheck each month. The earlier that you begin to establish good financial habits, the more likely it is that you will stick with them as you grow older. Be cautious of getting yourself into a financial situation from which you might not be able to recover. Carefully consider any debt you do take on, and do your best to avoid taking on any unnecessary or gratuitous debt. Now is also a suitable time to establish a responsible credit record. You will need a good credit score if you intend to make large purchases, such as buying a home or car later in life. You should also make on-time payments and establish responsible spending habits now to create a strong foundation for the future.

Your 30s – Create Retirement Goals

If you didn’t begin saving in your 20s, now is the time to do it. During your 30s, you still have time on your side to figure out what you will need for a comfortable retirement. You should begin to consider your plans for what you want your retirement to look like. Thinking critically about what you will need for expenses each month will help you to establish appropriate savings goals. This might also be an excellent time to meet with a financial advisor for some professional guidance related to your overall financial health. A financial advisor can help you to assess your financial situation and help you to make appropriate choices in order to reach your savings goals.

If you are fortunate enough to have an employer who offers you the option of a 401(k) plan with an employer match, now is the time to take full advantage of such an opportunity. Maxing out your employer match option is essentially like adding free money into your retirement savings account, so if it is at all possible for you to meet that threshold and take advantage of the full match, then you should do so. Now is also a good time to assess any debt you have and work toward paying it off as best you can. Paying off accumulated debt, such as credit card or student loan debt, will help to free up more of your income in order to save for retirement.

Your 40s – Buckle Down

Once you have reached your 40s, your life is probably becoming significantly more complicated. If you have been waiting to meet with a financial advisor, now might be a good time to do so. You will likely be considering additional expenses, such as helping your children with the cost of college and helping to care for aging parents. A financial advisor could potentially help you to navigate these sometimes tricky waters during this time. Additionally, you should start ramping up the percentage you are saving and aim to put around 12-15% of your income into savings, if possible. If you are just starting to save, you will want to increase that percentage to as much as 20% if you can.

Your 50s – Focus on Your Goals

Retirement is just around the corner now, and it’s time to narrow your focus. You should take advantage of catch-up contributions to put extra money into your 401(k). Put as much money as possible into your retirement accounts, especially if you are behind on your savings goals. Consider reassessing your budget in order to free up extra funds that you can put toward savings. Now is also an excellent time to develop an estate plan and to assess your health and life insurance needs. Consider meeting with a financial advisor who focuses on this type of financial planning in order to help you navigate this sometimes complex process. It’s never too early to save for retirement, so consider looking at the steps you can take today to achieve the retirement you want.

Published by Robert Ryerson

A financial professional with more than three decades of experience, Robert Ryerson works closely with clients in the Freehold, New Jersey, area to meet their financial planning needs. As a Certified Financial Planner (CFP) at New Century Planning, he focuses on retirement income planning, as well as estate administration, regularly assisting his clients with legacy and estate planning. He also advises them on health and disability insurance, including Medicare, Medicaid, and Medicare Supplement Plans. Mr. Ryerson’s many years helping his clients navigate the complexities of retirement planning gave him a deeper understanding of the healthcare costs that retirees face. In 2013, he drew upon this knowledge to co-author the book What You Don’t Know About Retirement Will Hurt You. Outside of his work at New Century Planning, Robert M. Ryerson is a regular fixture at workshops and seminars on retirement. He has delivered several keynote speeches on the often-confusing topic of required minimum distributions. Mr. Ryerson continues to share his financial expertise as a facilitator of online courses for Certified Public Accountants through The Society for Financial Awareness. In the early 2010s, Mr. Ryerson became concerned about the threat of identity theft after noting the many cybersecurity breaches suffered by major companies. He became a Certified Identity Theft Risk Management Specialist (CITRMS) in 2014. He has since taught identity theft recovery courses at local community colleges. Mr. Ryerson also wrote a book on the topic entitled What’s the Deal with Identity Theft: A Plain English Look at Our Fastest Growing Crime. A graduate of Rutgers University with a degree in economics, Mr. Ryerson began his career in the financial services industry as a stockbroker. He obtained his CFP designation in 1991 and began working as an independent financial planner a few years later. In addition, he is a notary public.

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