Retirement Savings Tips for Every Life Stage

We all dream of that ideal retirement. Setting your own schedule and doing what you want when you want. Achieving that goal requires financial stability — and these tips can help you set a strong foundation for reaching the future you’re dreaming of.

Set goals and make a plan
Retirement planning comes down to setting goals and knowing how you’ll reach them. Your goals may vary at different points in your life, and they won’t all relate directly to retirement. After all, whether you’re saving for a home down payment or a child’s college expenses, you’re pulling from the same pool of income you’ll use to save for retirement. You’ll have to make personal decisions to prioritize your savings plan.

For example, if you’re just starting your career, you may emphasize essentials like building a $1,000 emergency fund and paying down student debt. You should still start a retirement account, even if you make smaller contributions — starting early is a major asset in accumulating interest and building your savings over time.

If you’re an empty nester looking to retire sooner rather than later, you might focus on retirement savings and having an emergency fund to cover a year’s worth of expenses. Then you might adjust your life insurance coverage to account for independent children.

If you’re retiring next year, you might review your expected post-retirement income and expenses to identify financial gaps early so you can bridge them. Having a plan like this can give you real peace of mind.

Review savings options
A trusted financial advisor can provide an objective review of your retirement plan to see if it will really get you to your goals. They can also help ensure you’re using the best savings vehicles for your needs and where you are on your financial journey.

For example, your first retirement savings focus might be maximizing contributions to a 401(k), particularly if your employer makes matching contributions — it’s like free money! After that, you can consider adding other account types, like an IRA.

When it’s time to choose health insurance options, you might explore health savings accounts. They have tax advantages, let you earn interest and let you carry unused funds into the future — right on into retirement. As you approach your 50s, you might investigate long-term care insurance to help safeguard your retirement savings from the steep costs of unexpected care.

You should also review your insurance coverage and your entire financial plan whenever you hit a life milestone or meet a goal, such as getting married, having kids or buying a home.
Don’t overlook the importance of an estate plan, either. A financial power of attorney, in particular, will let you rest easy knowing someone you trust will manage your finances — including your retirement accounts — if you can’t do it yourself.

Don’t focus on performance
One thing you shouldn’t worry about too much is retirement account performance. The market will always have swings — but if you aren’t retiring soon, you’ll typically have time to recover from downturns. Especially if you’re working with a financial advisor who will let you know if it’s time to make changes to your portfolio or your plan.

Instead, look for ways to put more money into your retirement accounts. For instance, if you just got a raise, have some of it automatically contributed to your 401(k). If your kids have careers now, use some of the money you’re not spending on them to take out a long-term care insurance policy.

If you are nearing retirement, though, your account performance matters more. Talk with your financial advisor to see if you’re still on track to meet your retirement goals. If not, you may need to reconsider your retirement date, think about supplemental income sources or consider forgoing large expenses you’d been planning.

Learn more
Last but not least, learn as much as you can about retirement accounts and other savings vehicles. Ask your financial advisor and retirement account managers if they have educational tools or resources, and look for reliable online information sources. The more you know, the more secure you’ll feel with the decisions you make — and the better positioned you’ll be to enjoy that dream retirement.

This article is based on information available in August 2020. It is for general informational purposes only. It is not intended to provide specific financial, investment, tax, legal, accounting, or other advice and should not be acted or relied upon without the advice of a professional advisor. A professional advisor will recommend action based on your personal circumstances and the most recent information available.