Hit These Savings Goals at Every Age and Retire Happy
Saving for retirement happens in stages. At every age, you must hit certain milestones to slowly build your wealth and secure your future. Make it a priority to manage your finances correctly now to ensure you retire happy. Below are specific goals to hit at every age to help you stay on track.
Goals to hit at age 25
Establish healthy financial habits in your 20s and set yourself up for success. Time is on your side and you have the best opportunity to create a solid foundation for retirement.
• Set up an emergency fund. Save up to six months of your expenses to prepare for any emergency and not go into debt.
• Buy health insurance. At age 26, you will no longer be able to stay on your parent’s medical insurance. Prepare for it in advance to avoid any lapse in coverage.
• Start contributing to retirement. Open a 401(k) or IRA and save for retirement early. Prioritize student loans but begin to contribute to a retirement fund, too.
Goals to hit at age 30
Firm up your financial foundation. If you started in your 20s, you are already getting good at this by now!
• Get rid of student loan debt. Do it as quickly as possible because life is ushering you into a new level!
• Save for the down payment of your first home. Put together 20% for your down payment. This makes it easier to build equity and avoid paying private mortgage insurance.
• Buy life insurance and write a will. If you have started a family and have dependents, life insurance is essential for you and your spouse.
• Put 15% of your income into retirement. Time to increase contributions. Aim for 15% and no less than 10%.
Goals to hit at age 40
There are critical milestones to reach this age. Your finances should reflect how stable you are in life.
• Clear all consumer debt. Student loans, credit card debt, car loans, and any other consumer debt should be eliminated.
• Prepare for your children’s college. Start saving for a college fund. Be realistic about what you can afford to contribute.
• Save twice your income. Aim to have twice your annual income saved in your retirement accounts by this age.
Goals to hit at age 50
Continue to firm your financial foundation. Retirement is not long now!
• Max out retirement options. Make any adjustments you need to meet your retirement goals.
• Pay extra on your home. Turn all available dollars into your mortgage to have it done.
• Consider long-term care insurance. Buy it early. Do not start searching only when you already need it.
Goals to hit at age 60
• Assess your retirement goals. Check if more adjustments are needed to prepare your finances for retirement.
• Review your will and life insurance. Needs change so update your will and life insurance to ensure you have a policy that serves your needs.
Wherever you are in life now, it is never too late to start planning. Be intentional with your financial choices and aim to reach these milestones for you to retire happy.