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By: AgFed Credit Union

Welcome to AgFed Credit Union's MoneyDig blog! 

Get confident about your personal finances with a number of articles, tips, advice and more.


Retirement Savings for Every Life Stage

 May 24, 2024
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Retirement planning can be a tricky subject. Even with the most thorough blueprint, you’ll occasionally find yourself second-guessing your savings strategy. Are you saving too little or too much? How long will your money last? These are common questions, and unfortunately, there’s no clear-cut answer.

Everyone’s retirement goals and savings plans are unique. But that doesn’t mean you can’t use industry benchmarks to help guide you along the way. While your golden years will vary from others, it’s important to know where you’re going – and how to get there.

The following guide will walk you through different life stages and provide suggestions on how to keep your retirement savings on track.


Your Savings Cheat Sheet

There’s no one-size-fits-all retirement plan. However, industry benchmarks and rules of thumb can serve as a guideline for your savings plan. The chart below highlights popular savings goals dependent on your income and age.

Assume you make $75,000 annually before taxes. Using the chart below, by the time you reach age 40, you should aim to have between two and three times your annual salary saved ($150,000 - $225,000).






0.5x – 1x

$37,500 - $75,000


2x – 3x

$150,000 - $225,000


4x – 5x

$300,000 - $375,000


6x – 7x

$450,000 - $525,000


9x – 10x

$675,000 - $750,000


These benchmarks might seem challenging to achieve, but remember that with retirement planning, time is your best friend. The sooner you begin saving, the more time your money can compound and grow.

For example, imagine you are 25 years old and plan to retire at age 67. If you put $500 monthly into your retirement accounts, earning an average of 5% APY, you would have nearly $830,000 by the time you turn 67 – well above the suggested threshold.


In Your 20s

While most financial advisors will encourage you to save around 15% of your take-home pay, that’s not always possible – especially when starting out. In your twenties, you’re likely just beginning your career and managing new living expenses. However, because of your age, this is a crucial time for retirement planning. Anything you put aside now has decades to compound and can become a substantial sum.

To-Do List:

  • Begin mapping your financial goals: Consider your short-, mid-, and long-term plans. Understanding where you’re going (e.g., getting married, buying a home, starting a family) will impact your savings goals.


  • Consider liquid accounts: Tax-advantaged retirement accounts are beneficial; however, you also want to keep some money easily accessible when starting out. Money market accounts are great for building the habit of saving yet allow quick access to funds in an emergency.


  • Build the habit of saving: Even if you cannot afford to put aside much, get in the habit of saving. The more accustomed you are to saving, the easier it will become as you age and grow in your career.


In Your 30s

Many people hit significant milestones in their thirties, such as raising a family, buying a larger home, or advancing their careers. Each event can drastically change your financial position.

Consider meeting with a financial advisor to create a written retirement plan. When you know where you’re going, it’s much easier to get there. Your advisor does more than simply direct retirement funds – they also help you plan for these milestones and navigate how best to provide for your family financially.

To-Do List:

  • Automate your savings: As you advance in your career, use tools like payroll deductions and automatic transfers to put your savings on autopilot. Life in your thirties can get distracting, and this ensures your savings goals don’t get put on the back burner.


  • Meet with your financial advisor: Your financial advisor will guide you through different tax-advantaged accounts, such as IRAs and your employer-sponsored 401(k), if applicable. You’ll also be able to plan for major life events like purchasing a home or starting a family.


  • Manage debt responsibly: As you mature, life can quickly become costly – especially as a parent. Monitor credit card debt and create repayment plans to ensure interest expenses don’t derail your savings goals.


In Your 40s

Your forties and early fifties are when most parents begin prioritizing their children’s future college expenses over their retirement savings. It’s important not to undercut yourself and your future goals. Remember, time is money, and the more you can put aside now, the greater your nest egg will become.

Meet with your financial advisor to discuss college plans and financing. You can always help your child with student loans – you cannot finance your retirement.

To-Do List:

  • Stay the course: Keep an eye on your written retirement plan and review it regularly with your financial advisor. Discuss upcoming milestones, such as your child’s college expenses, so you can identify a solution that doesn’t take away from your long-term goals.


  • Increase your contributions: As you advance in your career and earn more, be sure to increase your retirement contributions. Try to max out your tax-advantaged accounts annually and keep some money liquid as an emergency fund.


  • Minimize debt: Offload costly credit card balances and other debt through debt consolidation. You can also work to lock in an exceptional credit score to lower interest payments and allocate more money toward your savings goals.


In Your 50s

With retirement on the horizon, your fifties are the final stretch. You’re likely to hit the peak-earning years of your career and should prioritize saving. Many individuals seek to retire early in their fifties – if this is the case, meet with your financial advisor regularly to ensure all your financial ducks are in a row.

To-Do List:

  • Utilize Catch-Up Contributions: Individuals ages 50 and older can contribute extra money to their IRA and 401(k) accounts through Catch-Up Contributions. Work with your financial advisor to ensure you max out your annual contribution limits, if applicable.


  • Envision your golden years: Plan in detail how you want to spend your golden years with your spouse. Make sure you both envision the same life and work to create a mock budget. Test-driving your budget for a month or two will help you determine if it’s realistic or if changes are necessary.


  • Keep saving: As you enter your peak earning years in your career, continue to increase your savings. Find ways to minimize debt and reduce expenses to maximize your savings potential.


In Your 60s

Your golden years are upon you! Whether you plan to retire at 67 or a bit earlier, utilize these years to transition into your well-deserved retirement. Some couples stagger their retirement dates, with one retiring a few years before the other. This strategy eases you into retirement with one income stream still coming in. As you move into a fixed income, begin to reduce frivolous expenses, and eliminate any outstanding debt.

To-Do List:

  • Know your benefits: Work with your financial advisor to ensure you understand all your retirement benefits, including Social Security and Medicare.


  • Finalize your retirement plan: Review your tax-advantaged accounts and other investments with your financial advisor. Finalize your withdrawal plan so you know how much money to access monthly and from which accounts.


  • Consider part-time work: Many new retirees need help transitioning into retirement. Some find they miss the social interaction of the workplace, and others feel more secure with at least some income still being generated. Part-time work is a common solution that allows you to choose a position you enjoy – and can benefit from your career skills.


We’re Here to Help!

Retirement plans are as unique as your fingerprint. No two plans will, or should be, the same. Benchmarks are suggestions that help guide you along the way, but only you and your financial advisor can determine your precise needs.

If you have questions about retirement planning or want a second opinion on your current plan, we’re prepared to help. Please give us call to discuss your options today.