At Any Age, Start (or Continue) Planning for Retirement

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Thinking about retirement is important at any age. However, the way in which you think about it changes based on your age. No matter how old you are, it’s not too late. We share things to consider today so you can get on the right track for your retirement future.

In Your 20s

Making the shift from adolescence to adulthood is jam packed with changes. Finishing school, beginning a career, and (likely) dealing with money management and debt. With bills mounting and entry-level salary to adjust to, it can seem challenging to start saving for retirement. But in your 20s is the ideal time to START SAVING. The sooner you start investing in your future, the more financially secure you are going to be in retirement—even though it seems a lifetime away.

Why start saving now? Think about the magic of compounding, where the money you earn on your investments starts earning money, too. Even if you only set aside $2,400 a year in a retirement account like a 401(k), 403(b) or an IRA, and that money earns an average of 8% a year, the difference of saving for 40 vs. 30 years can be huge. After 40 years, the value of your investment will be $648,360. But if you start 10 years later, you’ll have only $283,522.

So how can you start saving at the beginning of your career, when finances are probably tight? Here are some tips:

Be Careful With Debt

Your 20s is an ideal time to build a strong credit score, but it can quickly go the wrong way. Running up bills, maxing out multiple credit cards, and neglecting to make consistent payments will put you in a negative credit score hole that is tough to climb out of. Not to mention the addition of interest payments or extra fees that can be challenging to manage, too. Make a budget that fits your income, and don’t neglect paying (even just the minimum monthly payment) loans that you hold. Including any student loans.

Don’t Ignore Your Future

Onboarding with a new company is exciting, if not overwhelming. When your employer shares all the information about benefits—don’t ignore retirement-savings plan options. If there’s a 401(k) or similar program, make sure you enroll and take full advantage of any employer match opportunity. Even though it seems far in the future, a company match is free money! Get information about investment options or benefits, too. Oftentimes employers have additional ways to grow your savings following a set amount of time at the company. Make sure you know what is available and set a reminder to yourself to revisit as soon as you are eligible.

If a 401(k) isn’t an option, consider something like a Roth IRA. This type of Individual Retirement Account is an after-tax savings plan and because of that you won’t be taxed on your savings once you start making withdrawals in retirement.

Pay Yourself First

Adulthood includes building a savings account for emergencies. Consider creating a second, separate savings account at your bank to help you stay disciplined when reaching for your savings goals. Experts recommend striving for a savings fund of at least three months of normal expenses to cover an emergency like medical bills or car repairs. Small, consistent contributions to your savings account will add up quickly. Transfer a portion of your paycheck every month—or better yet, set up an automated deposit—so your good savings habits start in your 20s.

In Your 30s

Generally speaking, hitting your 30s is a time when financial stress increases tenfold. On the one hand, your career is underway and your income has been increasing. But on the other, many life stage changes happen. In your 30s you may be starting (or growing) your family. You may purchase a home and take on a monthly mortgage. And your debts are likely getting bigger.

None of these should be an excuse to put off saving for retirement. You have more life experiences in your 30s, so it is a good time to define your retirement goals. What do you want this to be? How much do you have to save in order to get there?

When you are in your 30s, here are some tips to help you aim for a comfortable retirement when the day comes:

Be Smart About Spending

Make the commitment to buy only what you need and what you can afford. Try to pay off your credit cards completely each month, or at least pay as much as you can to keep interest charges down.

When buying a house, be realistic about the amount you want to spend on payments. A mortgage is different than paying rent, so calculating how much house you can afford needs to be about how much your willing to budget for monthly payments.

Related: Mortgage Lending Do’s & Don’ts for First Time Home Buyers

Up Your Retirement Contribution

If you haven’t started adding funds to a retirement account in your 20s, don’t waste any more time. Start immediately. Contribute as much as you can to your retirement plan. The more you put in now, the more you’ll have in the future, and the more you’ll earn from compounding. If possible, you should be contributing 10% or more of your salary toward retirement.

Study your investment options. While it’s good to have a diverse portfolio, the younger you are the more aggressive you can be. Study your options or consult a trusted financial advisor.

If you have kids, consider starting a college savings account, but make sure this is not at the expense of saving for retirement.

In Your 40s

Looking at your retirement accounts in your 40s is either appreciating the healthy start you have taken or switching to emergency action-mode.

If you started contributing to your retirement fund in your 20s or 30s—congratulations! Your money has been compounding during this time and growing nicely. It is a good idea to do some calculations and confirm you are on the right track to meet your goals. It may be necessary to increase your monthly contribution. Don’t neglect your savings account, either. Should you be faced with unexpected bills or emergencies—which you can anticipate happening at some point in your 40s—you want to have quick access to funds that does not impact your retirement savings. Make it a priority to build this additional savings fund so it can cover at least three months’ worth of your expenses.

If you haven’t really gotten started building your retirement savings, now is the time to get serious.

What Can You Do To Start?

Immediately check with your employer to see what retirement plans or benefits are offered. If your company offers a 401(k) program (or something similar) enroll as soon as possible at the highest contribution level. Take full advantage of any employer match options, too. Maximum personal contribution limits can change annually. To see current limits, go to and search for 'retirement plan contribution limits'.

If your budget has room, you should also consider putting money into an IRA each year as another way to build your retirement fund. Be sure to study your retirement plan investment options and decide on the potential rewards vs. risks levels you are comfortable with. A financial advisor can help you find the saving and investment mixes that feel right for you.

Set Some Goals & Make Hard Choices

Pay down your debt. That’s because the more debt you have, the more you’ll be paying in interest costs—which could (and should) be going to savings. Make changes now to eliminate a credit card balance that is carried month over month, so you can pay each bill in full. Set a goal of having your house paid off before you retire, as this will be a huge help in reducing your regular expenses.

If you have children that are getting close to going off to college, you will need to make some hard decisions about how to prepare. If you haven’t already started to set aside funds for a college fund, it might be more beneficial to prioritize your retirement. If you need help, we recommend talking to a financial advisor* about your complete financial picture.

Taking positive steps now in your 40s to save will make your retirement stage worthwhile in the long run.

In Your 50s

If you are in your 50s and have been slow to save for retirement, it’s time to shift into high gear. There are some options for people over 50 to make catch-up contributions with some kinds of accounts, so discuss this with your financial advisor or employer benefits provider.

Regardless of when you were thinking you’d quit working, you need to know what it’s going to take to cross the retirement finish line with enough money to cover your living expenses.

Time to Take a Reality Check

At what age do you plan to retire? Working with target dates and online retirement calculators can help you decide if your target is realistic.

Are you sure you can afford it? It’s not uncommon to discover that if you work—and save—for a few extra years it can make a big difference in your post-retirement income.

What are your plans in retirement? It’s important to remember that you’ll still have expenses once you retire. You will need to buy food, pay bills, have a place to live, and cover medical costs. But what about plans for travel or new hobbies? Without new money coming in, you’ll need to have enough saved to keeping paying for those expenses.

Can you reduce your expenses now so you can start saving more? Paying off your bills and cutting back on spending can allow you to put that money into savings. It might be a good time to think about downsizing your home or moving into a housing situation that aligns with your retirement vision.

Plan Your New Income, Then Make the Switch

Map out what your adjusted income will look like once you retire. This should be inclusive of what you anticipate drawing from your accounts, any Social Security income, or annual pensions you may receive from your employer. You can estimate your annual Social Security income at

Once you have determined this estimated income, make your budget to match and test it out. Can you do it? This is the kind of reality check that can either make you feel good about your plan, or can quickly help you identify what changes you will need to make to get there. This is the time of your life to get serious about saving to make a piece of your future a little more secure.

*Talking to a financial advisor about your investments or options can be helpful. Fidelity Bank does not offer wealth management services.

Learn more about the Savings Account Options currently available from Fidelity Bank. If you would like to learn more about our Certificates of Deposit options or specials, reach out and we’ll connect you with a personal banker to discuss.


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