Retirement Planning Strategies Across Decades

In your twenties, starting early with small, consistent contributions can make a significant impact. Saving just $190 per month, which is 7% of a $30,000 annual salary, and building an emergency fund of three months’ salary are foundational steps that set the stage for financial growth. The power of compounding interest over time is substantial.

By your thirties, as your salary increases to around $50,000, the focus should shift to saving $600 per month—about 14% of your income—to reach a target of $150,000 by age 40. It’s also crucial to build up your emergency fund, save for a home, and consider life insurance to protect your family.

In your forties, with a typical salary of $80,000, aim to save 20% of your income, equating to $1,300 per month. This strategy helps you achieve a target of $480,000 by age 50 while managing college savings, mortgage payments, and tax planning. The emphasis during this period is on maximizing contributions and diversifying investments.

By your fifties, it’s time to leverage catch-up contributions and increase savings to $1,100 per month to double your savings to $1 million by age 60. Tax-efficient strategies like Roth conversions and proper estate planning become increasingly important as you prepare for retirement.

Savings Goals and Benchmarks

Joe and Alan provided key savings benchmarks for each decade:

• One times your annual salary by age 30
• Three times your annual salary by age 40
• Six times your annual salary by age 50
• Ten times your annual salary by age 67

They emphasized the importance of small, incremental increases in savings, such as boosting contributions by 1% each quarter or dedicating bonuses and raises to savings. The magic of compounding interest makes starting early and consistently increasing contributions a critical part of achieving these benchmarks.

Risk Management and Investment Allocation

As you age, your financial strategy should shift from building capital to preserving it. In your twenties and thirties, higher-risk investments like stocks are ideal for growth. By your forties and fifties, the focus should shift to bonds and income-generating assets to stabilize your portfolio and provide reliable income in retirement.

Tax Planning and Roth Conversions

As your income grows, so does the importance of tax planning. Some strategies to minimize taxes on investment income, dividends, and interest. Roth conversions are a powerful way to shift money from pretax accounts to Roth IRAs, ensuring tax-free withdrawals in retirement. A diversified tax strategy can provide more control and flexibility during retirement.

Catch-Up Contributions and Retirement Account Limits

For those over 50, IRS catch-up provisions allow for additional contributions: $1,000 more for IRAs (totaling $8,000 annually) and $7,500 for 401(k)s (totaling $30,500 annually). Take advantage of these higher limits during their peak earning years.

Estate Planning and Risk Management

In your forties and fifties, estate planning becomes crucial. Setting up trusts, wills, powers of attorney, and healthcare directives protects your family and ensures your wishes are followed. It’s also vital to review beneficiary forms and maintain adequate life and disability insurance, especially if you have dependents and a mortgage.

Key Takeaways and Actionable Steps

Retirement planning is a lifelong journey. Consistent savings, smart investment strategies, and proactive tax planning are essential to reaching your financial goals. They encouraged viewers to use the Retirement Readiness Guide available on their website to evaluate their financial preparedness and implement effective strategies for every decade of life.

Intended for educational purposes only. Opinions expressed are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Neither the information presented, nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Consult your financial professional before making any investment decisions. Opinions expressed are subject to change without notice.

IMPORTANT DISCLOSURES:

• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.

• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.

The post Financial Planning and Retirement Strategies for Every Decade appeared first on ROI TV.

Let’s start with the numbers. The median 401(k) balances in America tell an interesting story. Under 25? You’re looking at a $3,000 median balance. Ages 25–34? About $15,000. By the time people hit 55–64, that median rises to $88,000. But keep in mind: median means middle-of-the-pack—not average. A few outliers with millions can skew averages, so the median gives a better picture of where most folks really are.

Now, I don’t share these numbers to make anyone feel behind. Quite the opposite. I want you to see these as reference points, not goals. Because your retirement plan needs to fit your life, your income, and your dreams—not someone else’s.

My Go-To Strategies for Growing Retirement Savings

Here’s what I recommend: Start as early as you can, stay consistent, and let time and compound interest do the heavy lifting. Use tax-advantaged accounts like 401(k)s, traditional or Roth depending on your situation, and never leave an employer match on the table. That’s free money—take it!

One small change I love? Increase your contribution rate by just 1% each year. Over time, that can push you closer to the ideal target of saving 15–20% of your income for retirement.

Saving Benchmarks to Guide You

There are some general benchmarks I keep in mind to check my progress:

• By age 30: 1x your income saved
• By 40: 3x
• By 50: 6x
• By retirement: 8–10x

But again, these aren’t one-size-fits-all. If you’re planning to retire early, or your income jumps dramatically later in life, your path might look different. And that’s perfectly okay.

What the Generations Are Saving

I found it fascinating that Gen Z is saving about 7.2% of their income, Millennials about 8.6%, Gen X 10.2%, and Boomers 11.8%. And when you factor in employer contributions, many are hitting that 10–15% sweet spot recommended by financial planners. That’s good news—it means we’re moving in the right direction.

Don’t Make These Common 401(k) Mistakes

One of the biggest mistakes I see is people cashing out their 401(k)s when they change jobs. Nearly 41% of employees do this, and 85% of them take the entire balance. That’s a huge hit—not just in penalties and taxes, but in long-term growth.

If you’re changing jobs, consider rolling your 401(k) into your new employer’s plan or into an IRA. And whatever you do, don’t time the market or jump in and out based on headlines. Stay invested. Stay the course.

Max Out Your Contributions (If You Can)

If you’ve got the budget for it, 2025 contribution limits are generous: $23,500 for most people, and $34,250 for those aged 60–63. If you’re over 50, you also qualify for catch-up contributions. Every dollar counts, especially if you’ve got some ground to make up.

You can also build multiple income streams to reduce reliance on any one source. And don’t overlook the value of Roth accounts for tax-free withdrawals, or HSAs for future medical costs.

Play the Long Game

If there’s one thing I want you to take away, it’s this: consistency wins. Whether you’re 25 or 55, what matters most is making saving a habit and letting your money grow over time.

In your 40s and 50s, assess your progress. Adjust if needed. In your 50s and 60s, finalize your withdrawal strategy and tax plan. Don’t wait until retirement hits you—prepare for it on your terms.

Final Thoughts

Retirement isn’t just about stopping work—it’s about freedom. It’s about having choices. And I truly believe that with the right strategy, anyone can get there.

So start where you are. Save what you can. And increase it over time. I’d love to hear your thoughts—how are you preparing for retirement? Let’s keep the conversation going.

All writings are for educational and entertainment purposes only and does not provide investment or financial advice of any kind.

The post How to Build a Strong Retirement Plan at Any Age appeared first on ROI TV.