An Age-by-Age Guide to Saving for Retirement

Retirement experts say by the time you retire at age 67, you should have at least 10 times your annual salary saved. If that number is daunting, remember: the sooner in life you start saving, the more time your retirement funds have to grow. As you get closer to retirement, the money you’ve saved through the years will have grown through interest, increased value, and/or dividend reinvestments, giving you a huge boost toward reaching seemingly overwhelming retirement savings goals.

Here’s an age-by-age look at how to save for retirement:

In Your 20s:

You’ve got time on your side, an asset you won’t have later in life, so “use it or lose it.” In your 20s, you may not have a mortgage or family to support, meaning you’ll have more disposable income for savings. Start by building your emergency savings; three to six months of living expenses is a solid amount. Then aim to save 10% of your income for retirement. Use your employer’s 401(k), where you can take advantage of any employer matches (free money!) or save through an individual retirement account (IRA). You always want to defer enough money in your 401(k) savings to get 100% of your company match; otherwise you're leaving free money on the table.

In Your 30s:

You’re settling down now, maybe buying your first home or raising a family. You may not have as much discretionary income as you did in your 20s, but you still have time on your side. It’s important to stay the course if you’ve been saving regularly. Resist the urge to cut back or eliminate your retirement savings to cover other expenses, like a house down payment or mortgage. Aim for saving 15% of your annual salary for retirement. If  that's a challenge, some company plans allow you to automatically increase your contributions by 1% or more every year, which can make hitting this goal easier and less painful. Your 30s can be a good time to start talking with an investment professional to ensure you’re on track to reach your goals.

In Your 40s:

Congratulations, you’ve entered your peak earning years! You may still have a lot of expenses ─ mortgages, car payments, child care and educational costs − but by now you’ve built up some good savings habits. Put any bonuses, raises, and inheritances you receive into savings or investments. Work with an accountant to ensure you’re getting every tax advantage you can; they can often suggest ways to reduce your tax bill so that extra money can get funded into retirement savings.*

In Your 50s:

You’re still flying high at work, but retirement is just around the corner. Take a hard look at your retirement savings. Are you on track? If you’re not, plow as much money as you can into your retirement accounts; if you’re 50 or older at the end of the year, you can make an annual “catch-up” contribution to your 401(k) of up to $6,500 in 2022 and $7,500 in 2023.* Avoid the temptation to dip into your retirement savings to fund a child’s college education as you won’t have time to make up the short-fall.

In Your 60s and Beyond:

Whew, you made it! If you were able to save throughout your working years and invest that money wisely, you can now enjoy the fruits of your labor. Life expectancies are longer today than they’ve ever been, so if you’re short on retirement funds, consider working beyond the traditional retirement age. This could be your opportunity to do the work you’ve always wanted to do. While time won’t be able to work its magic on any savings you accrue now, you’ll have regular income coming in each month to augment your savings.


The investment advisors at Hanscom Investment Services can help you with retirement planning whatever age you are. It’s never too early…or too late! Give them a call at 800-656-4328 ext. 2236 or visit

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* The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.

†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. Hanscom Federal Credit Union is not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Hanscom Investment Services, and may also be employees of Hanscom Federal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Hanscom Federal Credit Union. Securities and insurance offered through LPL or its affiliates are: 

Not Insured by NCUA or Any Other Government Agency / Not Hanscom Federal Credit Union Guaranteed / Not Hanscom Federal Credit Union Deposits or Obligations / May Lose Value

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