Retirement Planning Through the Decades

Planning for retirement is a lifelong process, and there are different steps for you to take in every decade leading up to these years. Starting early and being disciplined are key parts to a successful strategy — the more you plan and follow that plan, the more likely you’ll feel financially secure during your retirement years.

“Imagine taking a 30-year vacation and the amount of time it would take you to plan what you’re going to do and for you to fund it— that’s what planning for retirement is about,” says Rebekah Barsch, vice president at Northwestern Mutual. “It’s really important that your financial planning delivers the kind of retirement that you want.”

Knowing how long your retirement will be is a big unknown though. Current life expectancy is 78.8 years, according to the CDC, but you may very well live into your 90s.  The sooner you begin to save though, the more time you’ll have on your side. “Investment management is about the probability of you reaching your financial goals,” says chartered financial analyst Robert Stammers, director of Investor Education for the CFA Institute. “The longer you have, the less risk you have to take. People who start in their 40s have to take more risk because they have no other way of getting there.”

Experts provide guidance on steps to take during each decade.


“Start developing a habit of putting money away for retirement,” says Barsch.

Most employers offer 401k plans and match your contributions— it’s free money so don’t pass that up.

Begin to fund a Roth IRA. “You would pay the tax for those today, and the money would grow tax-free and any money you take out in retirement would be tax-free,” says Marcy Keckler, vice president of financial advice strategy at Ameriprise Financial.

Start paying off student loans and credit cards, too, since investing and carrying debt at the same time doesn’t always work in your favor. “Even though you’re paying down your debt, you’re getting a risk free return on your money,” says Stammers.


“Keep your lifestyle constant and put anything that’s unexpected, like bonuses, raises and tax refunds, in savings,” says Stammers. “Build an emergency fund.” Unexpected expenses affect savings, but if you set aside six to nine months of expenses, you won’t have to dip into your retirement funds.

“Commit to saving just a little more each year,” says Keckler. If you’ve started to save money in a 401k plan, set up automatic increases each year. This way, you won’t feel squeezed and will begin to save more.

“Begin to create your own portfolio,” says Michael Eisenberg, a certified public accountant in Los Angeles. Depending on what your goals are, whether that’s to save for a down payment on a new home or to put money aside for a child’s tuition, have separate savings accounts that you can earmark for each.


These are your peak earning years. “One of the key strategies is to continue to boost your retirement savings by capturing some or all the raises you get,” says Keckler. “It can make sense to save the entire or half the raise for retirement.”

Maximize your 401k plan contributions. If you haven’t already, diversify your retirement accounts into a tax-deferred, taxable and Roth account to give you flexibility in retirement if the tax code changes.


“Supercharge your savings by taking advantage of catch up provisions,” says Keckler. “You’re allowed to save an additional amount into your 401k plan or a similar plan — now you can take advantage of these catch-up provisions that allow you to save about $5,000 more into your employer plan.”

Also consider where you want to live in retirement and if you want to downsize your home. “It becomes a very emotional decision when you’re in retirement, and it’s a lot easier to move into a condo when it’s part of the program rather than doing it because you have to,” says Stammers.

Experts suggest reviewing your long-term care options. Different insurance plans combine both life insurance and long-term care insurance so that if you don’t use the long-term care portion, someone still benefits from the life insurance provision — figure out what will work best for you.

If you haven’t done so already, eliminate any outstanding obligations in your 50s. “Get this debt down because you want as little debt as possible when you retire,” says Eisenberg.


As your retirement approaches, decide how you’ll spend your time and where you’ll live and tweak your plan accordingly. “Make those hard choices if you’re not on track,” says Stammers. “Ask yourself, am I going to be able to achieve what I want and how will I make up the difference.” As you go through this process, develop a budget and make any necessary lifestyle changes.

You’ll also have to make some key decisions about retirement benefits in your 60s.

You can start to take Social Security at 62, but it may behoove you to wait. “Between 66 and 70, for each year you wait, there’s an 8% kicker with Social Security — you’ll get 8% more for every year you wait,” says Eisenberg.

Beginning at 65, you’ve a seven-month window to enroll in Medicare, too. “If you don’t enroll, you could be subject to a penalty and would have to pay a higher price for Medicare for the duration, unless you’re still working,” says Keckler.


At this time in your life, if you planned all along, you should be in a great position to enjoy your retirement.

“Now you have to optimize your retirement withdrawals,” says Stammers. Figure out how much you really need from your different accounts and withdraw money in the most tax efficient way.

“Keep an eye out for significant changes in the economy,” says Barsch. A downturn in the market may require that you adjust your income plan or return to work — having a backup plan and another source of income can buy you time for your assets to recover.


“The 80s are the new 60s,” says Eisenberg. “You want to be able to live very comfortably in your 80s, and you don’t want financial stress — this will take years off your life.” Since you’re living on a fixed income, be careful where your money is going and take care of yourself first.