How to Set Retirement Goals by Age

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Editor's Note: This story originally appeared on SmartAsset.com.

Too many Americans are unprepared for retirement, according to a PwC analysis. Around a quarter of U.S. adults have no savings at all for retirement, and only 36% are on track.

Fortunately, several major brokerages offer age-based benchmarks that folks would be wise to consider as part of their retirement planning. Fidelity Investments, J.P. Morgan and T. Rowe Price each offer benchmarks on where you should be based on your age, income and marital status.

These benchmark providers base their suggested savings goals on varying assumptions. For example, Fidelity organizes its values so that investors can retire by age 67 with 10 times their final salary.

In the end, some of the rules might not work for your particular situation. So, use them as a starting point to get you moving. Also consider working with a financial adviser to gauge your readiness for retirement.

With that in mind, here are some general financial and personal retirement goals by age you might want to keep in mind.

Retirement Goals by 30

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While you should start saving by age 30, your actual saving goals are likely subject to change around this time. Many people use their 20s to figure out who they are and what they want and to settle into the workforce.

They also usually lack the same responsibilities that encourage people above the age of 30 to focus on their retirement, such as marriage or a family. So, they might not have the same means or motivation to create a structured plan yet.

Still, it’s essential to start saving as soon as you possibly can, even if you don’t have a strict schedule yet. Even a small amount can help you build significant wealth at this time since you can take advantage of compound interest.

Small, regular contributions can build over the decades into a valuable resource during your senior years.

There are also a few things you should have already started on. For example, experts usually recommend creating an emergency fund in the case of an unexpected cost or job loss.

This tends to be around three to six months’ worth of living expenses, which you can store in a high-yield savings account. You should also have established credit by this time and begun buying life and health insurance policies.

Here are some of the most popular benchmarks for this age group:

  • Fidelity Investments Benchmark: 1X your starting salary
  • J.P. Morgan Asset Management Benchmark: 0.8X your annual income
  • Rowe Price Benchmark: 0.5X your annual income

Additionally, you may decide to aim for a flat percentage on an annual basis. Some may put away as little as 15% of their income or as much as 80%. It depends on your current income level, age and future retirement plans.

Retirement Goals by 40

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Up until your 40s, your main goal is likely to maximize your savings and take advantage of interest rates. One of the main ways to catch up to your target savings is through investment.

At this age, you can still take on riskier investments in your portfolio, like stocks. Because you still have some time to recover from potential downs in the market, you don’t have to limit yourself quite yet.

It’s also a good time to focus on two areas: life insurance and college funds. Health concerns, end-of-life planning and education costs can eat away at your savings. So, covering these expenses will help safeguard your future funds.

If you don’t yet have life insurance, you may want to consider purchasing it by this time. It can help take care of your loved ones if you were to unexpectedly pass and pay for burdensome costs, like bills, mortgage payments and funeral arrangements.

As for college expenses, you have a couple of options. You can simply store away money, or you can look into a tax-free option such as a 529 plan. These make it simple to save for qualified college expenses, and other family members can contribute, helping you grow the fund.

Here are the most popular benchmarks for this age group:

  • Fidelity Investments Benchmark: 3X your starting salary
  • J.P. Morgan Asset Management Benchmark: 1.7X your annual income
  • T. Rowe Price Benchmark: 1.5X to 2.5X your annual income

Overall, this is the perfect time to catch up on any lack of saving.

Retirement Goals by 50

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Once you pass the age of 40, you might need to start considering ways to reduce your risk of financial loss. So, while you’re still building up your savings, you may need to pull back on spending. Or, you might want to push yourself to work longer.

But one of the biggest ways to lower your risk is to revisit your investment portfolio. At this point, you may need to opt for safer investments or further diversify your asset allocation. Shying away from potentially risky choices, such as long-term investments or stocks, will help you avoid financial loss.

After you turn 50, you can also start contributing more to your 401(k) and IRA plans. With catch-up contributions, you can make additional contributions to your 401(k) of up to $6,500. As for IRAs, you can contribute an extra $1,000 annually.

These measures, along with potential downsizing moves in your life, can help you transition financially into your later years.

Here are the most popular benchmarks for this age group:

  • Fidelity Investments Benchmark: 6X your starting salary
  • J.P. Morgan Asset Management Benchmark: 3.0X your annual income
  • T. Rowe Price Benchmark: 3.5X to 6X your annual income

Higher-income earners should also consider saving for higher benchmarks by this age. While you can be consistent, increasing the portion you put towards savings will help you in the long run.

For example, it will be less likely that you’ll have to change your lifestyle during retirement. And you’ll need more since Social Security replaces a lower percentage of the income you earned before retiring.

Retirement Goals by 60

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At this point in your retirement plan, you may face a transition. You probably are asking less frequently, “How much do I need to save?” and instead are wondering, “How can I make my savings last?” The simple reason: We’re living longer.

So, while it may be tempting to throw caution to the wind because you’ve almost reached retirement, it’s wise to buckle down during this time. You still have to plan out finances for at least another 20 years by the time you hit 60.

That’s because, according to the Social Security Administration, life expectancy for men and women by the age of 60 exceeds 20 years. For men, it’s 21.77 years, and for women, it’s 24.80 years.

However, you’ll want to hold out from collecting your Social Security too soon. While you can start as young as 62, you won’t receive your full benefits if you do that. Instead, wait to receive your benefits until you hit 70, past your full retirement age. At that point, you’re entitled to the entirety of your earned benefit.

Make paying off debts a priority during the upcoming decade, too. That way, you have less on your plate once you settle into retirement.

Here are the most popular benchmarks for this age group:

  • Fidelity Investments Benchmark: 8X your starting salary (10X total by age 67)
  • J.P. Morgan Asset Management Benchmark: 5.2X your annual income ($30,000) (6.8X total by age 65)
  • T. Rowe Price Benchmark: 6X to 11X your annual income

You might notice a wide gap in T. Rowe’s benchmark for this age range. They claim that the range tends to get wider as you age. Your marital status can also contribute to your T. Rowe benchmark as well.

How to Boost Your Retirement Savings

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There are multiple pressures on Americans that make it difficult to save right now. But, it’s important to start building your nest egg as soon as possible. The earlier you start, the more secure your senior years will be.

Think about it. A 25-year-old starts investing a regular but small amount, either through the stock market or a retirement account. The 10 years of interest they would accrue compared with a 35-year-old just starting to invest can make a significant difference in their eventual savings.

Likewise, starting on your employer-sponsored retirement account is also a vital way to increase savings. When you do, make sure to take advantage of your employer’s contribution matching program. That’s essentially free money put into your account, up to a certain percentage of your annual salary.

You might also want to think about other savings funds that could help you in the future. For example, one of the most common and expensive costs waiting for us as we age is medical bills.

A health savings account, or HSA, is a tax-advantaged account many people can fund on top of their retirement plan, thus covering you if you face any unexpected medical emergencies in the long term.

Regardless of your investment, though, or the plan you choose, it’s important to revisit your strategy regularly. Your life will likely face changes along the way, whether you gain new goals or experience financial hurdles.

Adjusting your methods will ensure you stay on top of things. That might require you to focus on paying down debt for a few years, altering your investment portfolio or working on a new fund.

The Takeaway

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Benchmarks are only estimates, but they can help you track your progress or give you a wake-up call. Try to find a detailed estimate tailored to your particular situation. You can use a retirement calculator to do this or consult a financial adviser. Some specialize in retirement planning and can make it easy to review your complete financial situation.

With their guidance, you can craft a customized retirement plan that accommodates your personal background, potential future changes and alternative income sources. Also, if you’re interested in reading up on the calculations for each benchmark, you can see them here: Fidelity Investments, J.P. Morgan and T. Rowe Price.

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