Money matters: Retirement planning for each decade

 By Chad Shull 

Redstone Federal Credit Union 

Are you one of the 50 percent of Americans who don’t know how much money you will need to save for retirement?  

The U.S. Department of Labor estimates that the average American will spend about 20 years in retirement. Financial independence comes with planning.  It’s not too late – or too early – to start!  

In your 20s, establish the habit. 

Aim for: saving the equivalent of your salary by the end of this decade. 

Put the power of compounding to work. Try to save 10 percent of your gross pay in a tax-advantaged savings plan, like an employer’s 401(k) or an individual retirement account (IRA). At the least, contribute what your company matches.  

Tip: Automatically deduct retirement savings from each paycheck, and don’t dip into the account. It’s not an emergency fund. 

In your 30s, stay focused. 

Aim for: 3 times your salary saved. 

Regularly saving 15 percent of your gross salary is ideal. Committing to a budget may help you find the funds.  

Tip: Don’t cash out your retirement if you change jobs. A direct rollover to another employer’s 401(k) or an IRA allows you to move money without taxes and penalties. 

In your 40s, watch your spending. 

Aim for: 4 times your salary saved.  

You’ve completed two decades of saving! Now’s the time to use an online retirement savings calculator to estimate the extent that amount may grow by the time you retire. 

Many in their 40s are sending children off to college. Children need their parents to support themselves when they’re older, so try to avoid digging into retirement savings for college costs. 

Tip: Commit to a plan for how much of every raise or bonus you’ll put toward savings. It’s easy to just spend more as you make more.  

In your 50s, get into high gear. 

Aim for: 8 times your salary saved. 

Consider maxing out your 401(k) and IRA contributions. You’re also eligible for “catch-up” contributions! 

An online calculator can estimate your retirement income based on your savings and expected Social Security payout. The results may help determine when you retire and whether you start downsizing. 

Tip: Talk to a professional financial planner and discuss how best to use your savings in retirement. 

In your 60s, envision your 90s. 

Aim for: 10 times your salary saved.  

As retirement draws close – congratulations! – think about the next 30 years and be sure to account for inflation.  

Tip: If you can, wait until age 70 to start collecting Social Security. 

Savings goals vary based on life stage, income and lifestyle in retirement. Talk to one of Redstone’s financial consultants to get started pursuing your retirement goals.   

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker/dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Redstone Credit Union and Redstone Brokerage Services are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Redstone Brokerage Services, and may also be employees of Sample Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of Redstone Credit Union or Redstone Brokerage Services. Securities and insurance offered through LPL or its affiliates are:

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