The Road to Retirement: Are You on Track?
While planning for retirement might seem a little overwhelming, having goals and a plan can make the journey more manageable. Below are several reference points that can keep you on target and moving in the right direction.
Age 30-35: Get established
This is a good starting point to begin saving through a retirement plan like a 401(k) or Roth IRA. Starting early is important, as more time to save means more money in the long run. Set a goal to have one to one and one-half times your income invested into your retirement account by the time you turn 35.
If you have any debt, ensure that you’re making steady progress towards paying it off. Never miss making a payment, pay on time and, if you can afford to, pay more than the minimum amount each month. As long as you’re able to stay on top of your debts, any additional savings you can invest will pay off exponentially in the future.
Also, set aside some money for an emergency fund if you haven’t done so. The road to retirement can be full of unexpected bumps, and you want to be prepared for when these moments happen.
Age 40-45: Assess your situation and build your nest egg
By the time you turn 40, you should have a considerable amount saved already from early investments. The retirement savings objectives at this stage can vary quite a bit, as many people have very different financial goals at this point. For instance, people who are single may have different goals than those who are married. Those who have children, or newer debts like a mortgage, will have different financial needs than those who don’t. This is also a time where many people experience significant career growth, which can change how you contribute to your retirement.
In general, it’s a good idea to save somewhere between two to three times your average annual income around this time. Your retirement plans will probably begin to take clearer shape as well, so be ready to adjust your savings as needed to reach your end goal. It’s also a good time to schedule a meeting with a financial advisor if you haven’t done so already, to develop strategies to help you meet your goals.
Age 50-55: Finalize your plan
By this time, many people have completed most of the major life milestones they hoped to accomplish. They’re looking towards retirement with a clear vision and are close to meeting the savings and investment goals they have established for a secure financial future.
Continue to make changes and improve your investment strategies at this stage. Stay in communication with your retirement plan advisor to ensure you’re on track for your personal goals. As this might be the time you’re in a career high, you can potentially save even more than you have before. Keep in mind that once you’re over 50, you may be able to increase the contribution to your retirement plan. A goal could be to have around 7 times your annual income in savings, though don’t be discouraged if that still seems out of reach.
Age 67+: Reap the benefits of your hard work
You have completed the road to retirement and can now relax at your destination. You deserve it!
Regardless of the type of account you choose, saving for retirement is important. If you want to learn more about the options available for your retirement savings, contact a Trustmark wealth advisor today.
