A Decade-by-Decade Roadmap to Reaching Retirement Goals

Decade-by-decade retirement planning

It’s usually easier to tackle a major goal when you break it down into many smaller targets.  That’s particularly true if you’re pursuing an important long-term financial objective. For example, a decade-by-decade roadmap can be very beneficial for someone who’s saving for retirement.

Here’s a case in point:

In your 30s: Start saving

Saving now, when retirement is thirty or more years away, offers time for your money to benefit from the wealth-building power of compounding.

One of the smartest ways to save is to participate in a qualified retirement plan at work. If your employer doesn’t offer a plan, establishing an IRA can be an excellent alternative.

In your 40s: Adopt an investment strategy  

After saving for more than a decade, the next step is to invest your accumulated balance according to a strategy that reflects your risk tolerance and time horizon.

When retirement is decades away, the long time frame often calls for an aggressive growth or growth strategy to pursue capital appreciation. The investments will have higher return potential but pose a greater risk of loss, particularly during volatile periods or bear markets. It’s common for people in their 40s to choose growth and accept the associated risk, believing they’ll have ample time to recover any losses.

In your 50s: Pay off bad debt and boost savings

In this decade of life, earnings tend to peak, which just happens to coincide with eligibility for the special catch-up provisions in qualified plans.  

This is also an ideal time to pay off high-interest rate credit cards. High balances require a lot of monthly income to service, which often poses a hardship for retirees and prompts anxiety. It’s smart to pay off those cards while you’re still working full-time.

In your 60s: Plan for retirement income

As people approach retirement, their investment objectives change from wealth accumulation to wealth protection and retirement income planning. Many clients feel comfortable downshifting to a more moderate or conservative investment strategy by their early 60s. They’re hoping to enjoy reliable, tax-efficient income and some capital appreciation during a decades-long retirement.        

If you’d like to have a customized roadmap and personalized advice, schedule a free consultation with Johnson Brunetti. We’ve helped clients of all ages plan for a financially secure future. So why wait? Let’s get the conversation started today.