The number one financial regret for many people is not starting a savings plan for retirement early enough. So, we’ve broken down the fundamental priorities to consider at each age that will help you stay on track for the future. Remember, it’s always a good idea to check with a financial advisor before you get started.
In your 20s – Ignoring retirement savings in your 20s means missing out on ample opportunities to grow it drastically. First, create an emergency fund. Your goal should be four to six months’ worth of living expenses in an accessible savings account. Second, pay off debt. Get ahead of high interest debt by knocking it down before you start using the extra money you have
for savings. Finally, open a retirement account and contribute to it. Do what it takes to open and add money to a 401(k) or IRA.
In your 30s – If you haven’t started saving and you’re in your 30s, there’s no need to fret—but it is time to start a retirement savings fund. Keep your retirement savings on target. Resist cutting back on retirement savings to meet other expenses, and review and adjust your savings and investing goals
annually.
In your 40s – If you’re in your 40s and want to retire in 20-30 years, there are a few things you can do now to make sure you’re comfortable later in life. Focus on consistent investing. At
this time in your life, you can still take advantage of compound interest with a consistent, disciplined approach. It’s not too late to begin investing in your 40s. So, get started if you haven’t done so.
In your 50s – It’s never too late to establish a financial plan that aligns with your goals. You can still build your nest egg with the right moves. Establish a mix of different types of investments that are aggressive enough to reach your goal, but be cautious so you’re not tempted to cash out when the market drops. Max out your contributions. If you have a retirement plan at work, contribute enough to maximize the match offered by your company. This is a great way to grow your retirement fund with “free money” from your employer. Also, if they provide any additional retirement savings plans, take advantage of them. Finally, though it can be temperamental at times, the stock market is still one of the best wealth creators.
Article adapted from BALANCE web content available on tinkerfcu.balancepro.org. BALANCE does not provide tax, legal, or investing advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or investing advice. You should consult your own tax, legal, and financial advisor before engaging in any transaction.