{"id":5998,"date":"2024-10-07T21:48:39","date_gmt":"2024-10-07T21:48:39","guid":{"rendered":"https:\/\/finderica.com\/how-to-save-for-retirement-from-your-20s-to-your-60s\/"},"modified":"2024-10-07T21:48:39","modified_gmt":"2024-10-07T21:48:39","slug":"how-to-save-for-retirement-from-your-20s-to-your-60s","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=5998","title":{"rendered":"How to Save for Retirement From Your 20s to Your 60s"},"content":{"rendered":"\n<div>\n<p>You probably don\u2019t need us to tell you that the earlier you start saving for retirement, the better. But let\u2019s face it: For a lot of people, the problem isn\u2019t that they don\u2019t understand how compounding works. They start saving late because their paychecks will only stretch so far.<\/p>\n<p>Whether you\u2019re in your 20s, or your golden years are fast approaching, saving and investing will help make your retirement more comfortable. We\u2019ll discuss how to save for retirement during each decade and the hurdles you may face at different stages of life.<\/p>\n<div class=\"adBorder\" id=\"thepe-361582650\">\n<h3>Swipe Like a Millionaire\u00a0\u2014 No Gold Card Required<\/h3>\n<p>Ever wondered how millionaires get to be\u2026 millionaires? Us, too. So we looked into it.<\/p>\n<p>What we found are\u00a0<a href=\"https:\/\/partners.thepennyhoarder.com\/millionaires-sdyn-prt\/?aff_id=384&amp;aff_sub3=millionaires-sdyn-prt\/&amp;aff_sub4=191914\" rel=\"false noopener\" target=\"_blank\">simple, millionaire-approved tips<\/a>\u00a0that anyone can use to manage their money.<\/p>\n<\/div>\n<h2><span class=\"tph-toc-anchored-text\" id=\"how-much-should-you-save-for-retirement\"><\/span>How Much Should You Save for Retirement?<\/h2>\n<p>A good rule of thumb is to save between 10% and 20% of pre-tax income for retirement. But the truth is, the actual amount you need to save for retirement depends on a lot of factors, including:<\/p>\n<ul>\n<li><i>Your age.<\/i> If you get a late start, you\u2019ll need to save more.<\/li>\n<li><i>Whether your employer matches contributions. <\/i>The 10% to 20% guideline includes your employer\u2019s match. So if your employer matches your contributions dollar-for-dollar, you may be able to get away with less.<\/li>\n<li><em>How aggressively you invest. <\/em>Taking more risk usually leads to larger returns, but your losses will be steeper if the stock market tanks.<\/li>\n<li><em>How long you plan to spend in retirement. <\/em>It\u2019s impossible to predict how long you\u2019ll be able to work or how long you\u2019ll live. But if you plan to retire early or people in your family often live into their mid-90s, you\u2019ll want to save more.<\/li>\n<\/ul>\n<h2><span class=\"tph-toc-anchored-text\" id=\"how-to-save-for-retirement-at-every-age\"><\/span>How to Save for Retirement at Every Age<\/h2>\n<p>Now that you\u2019re ready to start saving, here\u2019s a decade-by-decade breakdown of savings strategies and how to make your retirement a priority.<\/p>\n<h3><span class=\"tph-toc-anchored-text\" id=\"saving-for-retirement-in-your-20s\"><\/span>Saving for Retirement in Your 20s<\/h3>\n<p>A dollar invested in your 20s is worth more than a dollar invested in your 30s or 40s. The problem: When you\u2019re living on an entry-level salary, you just don\u2019t have that many dollars to invest, particularly if you have student loan debt.<\/p>\n<h4>Prioritize Your 401(k) Match<\/h4>\n<p>If your company offers a 401(k) plan, a 403(b) plan or any retirement account with matching contributions, contribute enough to get the full match \u2014 unless of course you wouldn\u2019t be able to pay bills as a result. The stock market delivers annual returns of about 8% on average. But if your employer gives you a 50% match, you\u2019re getting a 50% return on your contribution before your money is even invested. That\u2019s free money no investor would ever pass up.<\/p>\n<h4>Pay off High-Interest Debt<\/h4>\n<p>After getting that employer match, focus on tackling any high-interest debt. Companies like <a href=\"https:\/\/t.thepennyhoarder.com\/aff_c?offer_id=6680&amp;aff_id=2\" rel=\"nofollow noopener\" target=\"_blank\"><b>Freedom Debt Relief<\/b><\/a> can help with that by having negotiators work with your credit card companies to reduce your overall credit card debt.<\/p>\n<p>It\u2019s free to talk with a debt consultant to discuss your options and find the best debt relief strategy for your situation. There are no judgments. Just be prepared to explain why you\u2019re struggling to make your payments and tell them a little bit about your finances.<\/p>\n<h4>Take More Risks<\/h4>\n<p>Look, we\u2019re not telling you to throw your money into risky investments like bitcoin or the SS Reader stock your cousin won\u2019t shut up about. But when you start investing, you\u2019ll probably answer some questions to assess your risk tolerance. Take on as much risk as you can mentally handle, which means you\u2019ll invest mostly in stocks with a small percentage in bonds. Don\u2019t worry too much about a stock market crash. Missing out on growth is a bigger concern right now.<\/p>\n<h4>Build Your Emergency Fund<\/h4>\n<p>Building an emergency fund that could cover your expenses for three to six months is a great way to safeguard your retirement savings. That way you won\u2019t need to tap your growing nest egg in a cash crunch. This isn\u2019t money you should have invested, though. Some options include:<\/p>\n<h4>Tame Lifestyle Inflation<\/h4>\n<p>We want you to enjoy those much-deserved raises ahead of you \u2014 but keep lifestyle inflation in check. Don\u2019t spend every dollar each time your paycheck gets higher. Commit to investing a certain percentage of each raise and then use the rest as you please.<\/p>\n<figure id=\"attachment_175341\" style=\"width: 1024px\" class=\"wp-caption alignright\"><img loading=\"lazy\" fetchpriority=\"high\" loading=\"lazy\" fetchpriority=\"high\" decoding=\"async\" class=\"lazyload size-large wp-image-175341\" src=\"https:\/\/www.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/saving-30s-final-1024x683.jpg\" alt=\"A woman meditates in her apartment with her cat. \" width=\"1024\" height=\"683\" srcset=\"https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131605\/saving-30s-final-1024x683.jpg 1024w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131605\/saving-30s-final-360x240.jpg 360w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131605\/saving-30s-final-768x512.jpg 768w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131605\/saving-30s-final-100x67.jpg 100w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131605\/saving-30s-final-222x148.jpg 222w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131605\/saving-30s-final-314x209.jpg 314w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131605\/saving-30s-final-363x242.jpg 363w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131605\/saving-30s-final-467x311.jpg 467w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131605\/saving-30s-final-649x433.jpg 649w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131605\/saving-30s-final-750x500.jpg 750w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131605\/saving-30s-final-793x529.jpg 793w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131605\/saving-30s-final-300x200.jpg 300w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131605\/saving-30s-final.jpg 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"><figcaption class=\"wp-caption-text\"> Getty Images<\/figcaption><\/figure>\n<h3><span class=\"tph-toc-anchored-text\" id=\"saving-for-retirement-in-your-30s\"><\/span>Saving for Retirement in Your 30s<\/h3>\n<p>If you\u2019re just starting to save in your 30s, the picture isn\u2019t too dire. You still have about three decades left until retirement, but it\u2019s essential not to delay any further. Saving may be a challenge now, though, if you\u2019ve added kids and homeownership to the mix.<\/p>\n<h4>Invest in an IRA<\/h4>\n<p>Opening a Roth IRA is a great way to supplement your savings if you\u2019ve only been investing in your 401(k) thus far. A Roth IRA is a solid bet because you\u2019ll get tax-free money in retirement.<\/p>\n<p>In 2024, you can contribute <a href=\"https:\/\/www.irs.gov\/newsroom\/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000\" target=\"_blank\" rel=\"noopener\">up to $7,000<\/a> if you\u2019re younger than 50. The deadline to contribute isn\u2019t until tax day for any given year, so you can still make contributions for 2024 until April 15, 2025. If you earn too much to fund a Roth IRA, or you want the tax break now (even though it means paying taxes in retirement), you can contribute to a traditional IRA.<\/p>\n<p>Your investment options with a 401(k) are limited. But with an IRA, you can invest in whatever stocks, bonds, mutual funds or exchange-traded funds (ETFs) you choose.<\/p>\n<h4>Avoid Mixing Retirement Money With Other Savings<\/h4>\n<p>You\u2019re allowed to take a 401(k) loan for a home purchase. The Roth IRA rules give you the flexibility to use your investment money for a first-time home purchase or college tuition. You\u2019re also allowed to withdraw your contributions whenever you want. Wait, though. That doesn\u2019t mean you should.<\/p>\n<p>The obvious drawback is that you\u2019re taking money out of the market before it\u2019s had time to compound. But there\u2019s another downside. It\u2019s hard to figure out if you\u2019re on track for your retirement goals when your Roth IRA is doing double duty as a college savings account or down payment fund.<\/p>\n<h4>Start a 529 Plan While Your Kids Are Young<\/h4>\n<p>Saving for your own future takes higher priority than saving for your kids\u2019 college. But if your retirement funds are in shipshape, opening a 529 plan to save for your children\u2019s education is a smart move. Not only will you keep the money separate from your nest egg, but by planning for their education early, you\u2019ll avoid having to tap your savings for their needs later on.<\/p>\n<h4>Keep Investing When the Stock Market Crashes<\/h4>\n<p>The S&amp;P 500 index, which represents about 80% of the U.S. stock market, finished out 2023 <a href=\"https:\/\/www.marketwatch.com\/livecoverage\/stock-market-today-s-p500-nears-record-high\" target=\"_blank\" rel=\"noopener\">with a 24% gain<\/a>. But the stock market has a major meltdown like the March 2020 COVID-19 crash about once a decade.<\/p>\n<p>But if a prolonged bear market or crash happens in your 30s, it\u2019s often the first time you have enough invested to see your net worth take a hit. Don\u2019t let panic take over. No cashing out. Commit to dollar-cost averaging and keep investing as usual, even when you\u2019re terrified.<\/p>\n<div class=\"adBorder\" id=\"thepe-1893747764\">\n<h3>Is Your Bank Holding You Back?<\/h3>\n<p>Got $1,000 in checking? These\u00a0<a href=\"https:\/\/partners.thepennyhoarder.com\/1000-checking-account-make-4-moves-prt\/?aff_id=384&amp;aff_sub3=1000-checking-account-make-4-moves-prt\/&amp;aff_sub4=191809\" target=\"_blank\" rel=\"noopener\">smart moves<\/a> could help you reach your next big savings goal. <\/p>\n<\/div>\n<figure id=\"attachment_175344\" style=\"width: 1024px\" class=\"wp-caption alignright\"><img loading=\"lazy\" loading=\"lazy\" decoding=\"async\" class=\"lazyload size-large wp-image-175344\" src=\"https:\/\/www.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/saving-40s-final-1024x683.jpg\" alt=\"Two women walk and laugh.\" width=\"1024\" height=\"683\" srcset=\"https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131935\/saving-40s-final-1024x683.jpg 1024w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131935\/saving-40s-final-360x240.jpg 360w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131935\/saving-40s-final-768x512.jpg 768w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131935\/saving-40s-final-100x67.jpg 100w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131935\/saving-40s-final-222x148.jpg 222w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131935\/saving-40s-final-314x209.jpg 314w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131935\/saving-40s-final-363x242.jpg 363w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131935\/saving-40s-final-467x311.jpg 467w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131935\/saving-40s-final-649x433.jpg 649w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131935\/saving-40s-final-750x500.jpg 750w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131935\/saving-40s-final-793x529.jpg 793w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131935\/saving-40s-final-300x200.jpg 300w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12131935\/saving-40s-final.jpg 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"><figcaption class=\"wp-caption-text\"> Getty Images<\/figcaption><\/figure>\n<h3><span class=\"tph-toc-anchored-text\" id=\"saving-for-retirement-in-your-40s\"><\/span>Saving for Retirement in Your 40s<\/h3>\n<p>If you\u2019re in your 40s and started saving early, you may have a healthy nest egg by now. But if you\u2019re behind on your retirement goals, now is the time to ramp things up. You still have plenty of time to save, but you\u2019ve missed out on those early years of compounding.<\/p>\n<h4>Continue Taking Enough Risk<\/h4>\n<p>You may feel like you can afford less investment risk in your 40s, but you still realistically have another two decades left until retirement. Your money still has \u2014 and needs \u2014 plenty of time to grow. Stay invested mostly in stocks, even if it\u2019s more unnerving than ever when you see the stock market tank.<\/p>\n<h4>Put Your Retirement Above Your Kids\u2019 College Fund<\/h4>\n<p>You can only afford to pay for your kids\u2019 college if you\u2019re on track for retirement. Talk to your kids early on about what you can afford, as well their options for avoiding massive student loan debt, including attending a cheaper school, getting financial aid, and working while going to school. Your options for funding your retirement are much more limited.<\/p>\n<h4>Keep Your Mortgage<\/h4>\n<p>Mortgage rates vary from week to week, but they\u2019re expected to stay low for most of 2021. Your potential returns are much higher for investing, so you\u2019re better off putting extra money into your retirement accounts. If you haven\u2019t already done so, consider refinancing your mortgage to get the lowest rate.<\/p>\n<h4>Invest Even More<\/h4>\n<p>Now is the time to invest even more if you can afford to. Keep getting that full employer 401(k) match. Beyond that, try to max out your IRA contributions. If you have extra money to invest on top of that, consider allocating more to your 401(k). Or you could invest in a taxable brokerage account if you want more flexibility on how to invest.<\/p>\n<h4>Meet With a Financial Adviser<\/h4>\n<p>You\u2019re about halfway through your working years when you\u2019re in your 40s. Now is a good time to meet with a financial adviser. If you can\u2019t afford one, a financial counselor is typically less expensive. They\u2019ll focus on fundamentals like budgeting and paying off debt, rather than giving investment advice.<\/p>\n<div class=\"adBorder\" id=\"thepe-763849508\">\n<h3>The 5 Dumbest Things We Keep Spending Too Much Money On<\/h3>\n<p>You\u2019ve done what you can to cut back your spending. You brew coffee at home, you don\u2019t walk into Target and you refuse to order avocado toast. (Can you sense my millennial sarcasm there?)<\/p>\n<p>But no matter how cognizant you are of your spending habits, you\u2019re still stuck with those inescapable monthly bills.<\/p>\n<p>You know which ones we\u2019re talking about: rent, utilities, cell phone bill, insurance, groceries\u2026<\/p>\n<p>Ready to stop paying them? <a href=\"https:\/\/partners.thepennyhoarder.com\/spending-too-much-sdyn-prt\/?aff_id=384\" target=\"_blank\" rel=\"noopener\">Follow these moves\u2026<\/a><\/p>\n<\/div>\n<figure id=\"attachment_128783\" style=\"width: 1200px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" loading=\"lazy\" decoding=\"async\" class=\"lazyload size-full wp-image-128783\" src=\"https:\/\/www.thepennyhoarder.com\/wp-content\/uploads\/2019\/03\/05192018_AngelRock_TR029-final.jpg\" alt=\"A woman waves her hands in the air as she overlooks a mountainous view in Alaska.\" width=\"1200\" height=\"800\" srcset=\"https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2019\/03\/24141409\/05192018_AngelRock_TR029-final.jpg 1200w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2019\/03\/24141409\/05192018_AngelRock_TR029-final-360x240.jpg 360w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2019\/03\/24141409\/05192018_AngelRock_TR029-final-768x512.jpg 768w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2019\/03\/24141409\/05192018_AngelRock_TR029-final-1024x683.jpg 1024w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2019\/03\/24141409\/05192018_AngelRock_TR029-final-100x67.jpg 100w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2019\/03\/24141409\/05192018_AngelRock_TR029-final-222x148.jpg 222w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2019\/03\/24141409\/05192018_AngelRock_TR029-final-314x209.jpg 314w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2019\/03\/24141409\/05192018_AngelRock_TR029-final-363x242.jpg 363w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2019\/03\/24141409\/05192018_AngelRock_TR029-final-467x311.jpg 467w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2019\/03\/24141409\/05192018_AngelRock_TR029-final-649x433.jpg 649w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2019\/03\/24141409\/05192018_AngelRock_TR029-final-750x500.jpg 750w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2019\/03\/24141409\/05192018_AngelRock_TR029-final-793x529.jpg 793w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2019\/03\/24141409\/05192018_AngelRock_TR029-final-300x200.jpg 300w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\"><figcaption class=\"wp-caption-text\"> Tina Russell\/The SS<\/figcaption><\/figure>\n<h3><span class=\"tph-toc-anchored-text\" id=\"saving-for-retirement-in-your-50s\"><\/span>Saving for Retirement in Your 50s<\/h3>\n<p>By your 50s, those retirement years that once seemed like they were an eternity away are getting closer. Maybe that\u2019s an exciting prospect \u2014 or perhaps it fills you with dread. Whether you want to keep working forever or retirement can\u2019t come soon enough, now is the perfect time to start setting goals for when you want to retire and what you want your retirement to look like.<\/p>\n<h4>Review Your Asset Allocation<\/h4>\n<p>In your 50s, you may want to start shifting more into safe assets, like bonds or CDs. Your money has less time to recover from a stock market crash. Be careful, though. You still want to be invested in stocks so you can earn returns that will keep your money growing. With interest rates likely to stay low through 2023, bonds and CDs probably won\u2019t earn enough to keep pace with inflation.<\/p>\n<h4>Take Advantage of Catch-up Contributions<\/h4>\n<p>If you\u2019re behind on retirement savings, give your funds a boost using catch-up contributions. In 2024, you can contribute:<\/p>\n<ul>\n<li aria-level=\"1\">$1,000 extra to a Roth or traditional IRA (or split the money between the two) once you\u2019re 50<\/li>\n<li aria-level=\"1\">$7,500 extra to your 401(k) and most other workplace accounts once you\u2019re 50<\/li>\n<li aria-level=\"1\">$1,000 extra to a health savings account (HSA) once you\u2019re 55.<\/li>\n<\/ul>\n<p>The Secure Act 2.0, which passed in December 2022, will increase catch-up contributions to employer-sponsored accounts workers between ages 60 and 63 beginning in 2025.<\/p>\n<h4>Work More if You\u2019re Behind<\/h4>\n<p>Your window for catching up on retirement savings is getting smaller now. So if you\u2019re behind, consider your options for earning extra money to put into your nest egg. You could take on a side hustle, take on freelance work or work overtime if that\u2019s a possibility to bring in extra cash. Even if you intend to work for another decade or two, many people are forced to retire earlier than they planned. It\u2019s essential that you earn as much as possible while you can.<\/p>\n<h4>Pay off Your Remaining Debt<\/h4>\n<p>Since your 50s is often when you start shifting away from high-growth mode and into safer investments, now is a good time to use extra money to pay off lower-interest debt, including your mortgage. Retirement will be much more relaxing if you can enjoy it debt-free.<\/p>\n<figure id=\"attachment_175345\" style=\"width: 1024px\" class=\"wp-caption alignright\"><img loading=\"lazy\" loading=\"lazy\" decoding=\"async\" class=\"lazyload size-large wp-image-175345\" src=\"https:\/\/www.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/saving-60s-final-1024x683.jpg\" alt=\"A couple in their 60s walk on the beach.\" width=\"1024\" height=\"683\" srcset=\"https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12132228\/saving-60s-final-1024x683.jpg 1024w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12132228\/saving-60s-final-360x240.jpg 360w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12132228\/saving-60s-final-768x512.jpg 768w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12132228\/saving-60s-final-100x67.jpg 100w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12132228\/saving-60s-final-222x148.jpg 222w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12132228\/saving-60s-final-314x209.jpg 314w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12132228\/saving-60s-final-363x242.jpg 363w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12132228\/saving-60s-final-467x311.jpg 467w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12132228\/saving-60s-final-649x433.jpg 649w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12132228\/saving-60s-final-750x500.jpg 750w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12132228\/saving-60s-final-793x529.jpg 793w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12132228\/saving-60s-final-300x200.jpg 300w, https:\/\/cdn.thepennyhoarder.com\/wp-content\/uploads\/2018\/03\/12132228\/saving-60s-final.jpg 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\"><figcaption class=\"wp-caption-text\"> Getty Images<\/figcaption><\/figure>\n<h3><span class=\"tph-toc-anchored-text\" id=\"saving-for-retirement-in-your-60s\"><\/span>Saving for Retirement in Your 60s<\/h3>\n<p>Hooray, you\u2019ve made it! Hopefully your retirement goals are looking attainable by now after working for decades to get here. But you still have some big decisions to make. Someone in their 60s in 2024 could easily spend another two to three decades in retirement. Your challenge now is to make that hard-earned money last as long as possible.<\/p>\n<h4>Make a Retirement Budget<\/h4>\n<p>Start planning your retirement budget at least a couple years before you actually retire. Financial planners generally recommend replacing about 70% to 80% of your pre-retirement income. Common income sources for seniors include:<\/p>\n<ul>\n<li><b>Social Security benefits. <\/b>Monthly benefits replace about 40% of pre-retirement income for the average senior.<\/li>\n<li><b>Retirement account withdrawals. <\/b>Money you take out from your retirement accounts, like your 401(k) and IRA.<\/li>\n<li><b>Defined-benefit <\/b><b>pensions<\/b><b>.<\/b> These are increasingly rare in the private sector, but still somewhat common for those retiring from a career in public service.<b><\/b><\/li>\n<li><b>Annuities. <\/b>Though controversial in the personal finance world, an annuity could make sense if you\u2019re worried about outliving your savings.<\/li>\n<li><b>Other investment income. <\/b>Some seniors supplement their retirement and Social Security income with earnings from real estate investments or dividend stocks, for example.<\/li>\n<li><strong>Part-time work.<\/strong> A part-time job can help you delay dipping into your retirement savings account, giving your money more time to grow. <b><\/b><\/li>\n<li><b>Reverse mortgages: <\/b>If you\u2019ve paid off your home or have significant equity, a reverse mortgage can provide extra income.<\/li>\n<\/ul>\n<p>You can plan on some expenses going away. You won\u2019t be paying payroll taxes or making retirement contributions, for example, and maybe your mortgage will be paid off. But you generally don\u2019t want to plan for any budget cuts that are too drastic.<\/p>\n<p>Even though some of your expenses will decrease, health care costs eat up a large chunk of senior income, even once you\u2019re eligible for Medicare coverage \u2014 and they usually increase much faster than inflation.<\/p>\n<div class=\"adBorder\" id=\"thepe-1400398283\">\n<h3>We Dare You to Take Control of Your Debt<\/h3>\n<p>Up for a debt challenge?<\/p>\n<p>In 10 days, <a href=\"https:\/\/partners.thepennyhoarder.com\/organize-your-finances-prt\/?aff_id=384&amp;aff_sub3=organize-your-finances-prt\/&amp;aff_sub4=191929\" rel=\"false noopener\" target=\"_blank\">these 10 practical steps<\/a>\u00a0could help you get back on the right financial track.<\/p>\n<\/div>\n<h4>Develop Your Social Security Strategy<\/h4>\n<p>You can take your Social Security benefits as early as 62 or as late as age 70. But the earlier you take benefits, the lower your monthly benefits will be. If your retirement funds are lacking, delaying as long as you can is usually the best solution. Taking your benefit at 70 vs. 62 will result in monthly checks that are about 76% higher. However, if you have significant health problems, taking benefits earlier may pay off.<\/p>\n<h4>Figure Out How Much You Can Afford to Withdraw<\/h4>\n<p>Once you\u2019ve made your retirement budget and estimated how much Social Security you\u2019ll receive, you can estimate how much you\u2019ll be able to safely withdraw from your retirement accounts. A common retirement planning guideline is the 4% rule: You withdraw no more than 4% of your retirement savings in the first year, then adjust the amount for inflation.<\/p>\n<p>If you have a Roth IRA, you can let that money grow as long as you want and then enjoy it tax-free. But you\u2019ll have to take required minimum distributions, or RMDs, beginning at age 73 (previously age 72) if you have a 401(k) or a traditional IRA. These are mandatory distributions based on your life expectancy.<\/p>\n<p>The penalties for not taking them are stiff: You\u2019ll owe the IRS 50% of the amount you were supposed to withdraw for tax years 2022 and prior, though the penalty dropped to 25% for 2023 and subsequent years.<\/p>\n<h4>Keep Investing While You\u2019re Working<\/h4>\n<p>Avoid taking money out of your retirement accounts while you\u2019re still working. Once you\u2019re over age 59 \u00bd, you won\u2019t pay an early withdrawal penalty, but you want to avoid touching your retirement funds for as long as possible.<\/p>\n<p>Instead, continue to invest in your retirement plans as long as you\u2019re still earning money. But do so cautiously. Keep money out of the stock market if you\u2019ll need it in the next five years or so, since your money doesn\u2019t have much time to recover from a stock market crash in your 60s.<\/p>\n<h2><span class=\"tph-toc-anchored-text\" id=\"a-final-thought-make-your-retirement-about-you\"><\/span>A Final Thought: Make Your Retirement About You<\/h2>\n<p>Whether you\u2019re still working or you\u2019re already enjoying your golden years, this part is essential: You need to prioritize you. That means your retirement savings goals need to come before bailing out family members, or paying for college for your children and grandchildren. After all, no one else is going to come to the rescue if you get to retirement with no savings.<\/p>\n<p>If you\u2019re like most people, you\u2019ll work for decades to get to retirement. The earlier you start planning for it, the more stress-free it will be.<\/p>\n<p><i>Robin Hartill is a certified financial planner and a senior editor at The SS. She writes the Dear Penny personal finance advice column. Send your tricky money questions to <\/i><i><span class=\"__cf_email__\" data-cfemail=\"3e7a5b5f4c6e5b5050477e4a565b4e5b50504756515f4c5a5b4c105d5153\">[email\u00a0protected]<\/span><\/i><i>.<\/i><\/p>\n<p>        <!-- ACF Financial Disclaimer --><\/p>\n<p>        <!-- End ACF Financial Disclaimer --><\/p>\n<p>        <!-- \n\n<div class=\"single-social-share-bottom text-center\"> --><br \/>\n                    <!-- <\/div>\n\n --><\/p>\n<p>        <!-- Newsletter Signup Form --><\/p>\n<hr>\n<hr>\n<div class=\"newsletter-signup-wrapper-for-digioh\">\n<div class=\"col-xs-12 newsletter-wrap flex-row\">\n<div class=\"container flex-container\">\n<div class=\"col-xs-12 new-newsletter-form\">\n<p class=\"text-subheading\">Ready to stop worrying about money?<\/p>\n<p class=\"text-get-daily\">Get the SS Daily<\/p>\n<p class=\"email-privacy-policy-blurb-white\">\n<\/p><\/div>\n<\/div><\/div>\n<\/p><\/div>\n<p>        <!-- End Newsletter Signup Form --><\/p><\/div>\n<p><script type=\"text\/javascript\" id=\"wp-fcapi-js-before\">\n\/* <![CDATA[ *\/\n!function(f,b,e,v,n,t,s)\n{if(f.fbq)return;n=f.fbq=function(){n.callMethod?\nn.callMethod.apply(n,arguments):n.queue.push(arguments)};\nif(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';\nn.queue=[];t=b.createElement(e);t.async=!0;\nt.src=v;s=b.getElementsByTagName(e)[0];\ns.parentNode.insertBefore(t,s)}(window, document,'script',\n'https:\/\/connect.facebook.net\/en_US\/fbevents.js');\nfbq('init', '263664193816679');\n\/* ]]> *\/\n<\/script><br \/>\n<br \/><a href=\"https:\/\/www.thepennyhoarder.com\/retirement\/how-to-save-for-retirement\/\" target=\"_blank\" rel=\"noopener\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>You probably don\u2019t need us to tell you that the earlier you start saving for retirement, the better. 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