Retirement Planning by the Decade: A Savings Guide

Retirement is far away, but you'll never be more powerful from a savings perspective.

Your company-sponsored retirement plan, such as a 401(k), may be your most powerful savings tool. Many employers automatically enroll new employees in their retirement plans—but it's still up to you to contribute enough to reach your goals. A good target at this age is 10% to 15% of your pretax income if your income allows. If you can't afford it, at the least, aim for contributing enough to get the full employer match, if offered.

And don't forget: As your income grows, you can more readily increase your contributions—up to $24,500 in 2026 for a 401(k) and similar retirement plans like a 457(b) or 403(b).

The more of your credit card balance you carry over from month to month, the more of your income goes toward interest payments—and the less is left over for savings.

While compound interest is instrumental in helping your savings grow, it becomes a detriment if you have a revolving credit line. Debt control is key for building long-term wealth.

Likewise, having a pot of money for emergencies like car repairs or an unexpected medical bill means you'll be less likely to reduce or pause your retirement savings to help cover the cost.

If your employer offers an eligible high-deductible health plan, you typically can set up an HSA, which offers three distinct tax advantages: Generally, contributions are tax deductible, assets can potentially grow tax-free, and withdrawals are tax-free for qualified medical expenses.

If you're young and healthy, it's unlikely you'll use all your HSA funds each year. Instead, you can invest the remainder until you really need it. While this can be a great way to save for health care in retirement, remember investing involves risk. (For 2026, annual contribution limits are $4,400 per individual and $8,750 for families.)

Juggling competing goals shouldn't distract you from your future self.

Everyday costs typically rise during this stage of life—with expenses like child care, a bigger house, or a second car. Now's the time to be honest with yourself about your true needs versus your wants.

For example, a hypothetical saver who frees up just $100 a month to invest could potentially have an additional $50,000 saved after 20 years, assuming a 7% annual return.

As your income grows, resist taking on more or bigger financial commitments. Consider how much closer to reaching your goals you can get with just a modest increase to your expenses and by investing the difference instead.

One of the best ways around this trap is to "pay yourself first" and fund your savings before paying for anything else. If you're already maxing out your 401(k) and can save even more, consider contributing to a tax-advantaged IRA—up to $7,500 in 2026—or a taxable brokerage account.

As parents, we want to do everything we can to support our kids—but when it comes to saving for retirement and college, it's important to prioritize your own future. After all, you can't borrow for retirement as easily as you can for college.

What's more, you generally don't need to save 100% of the cost of college. A good rule of thumb is to pay a third with savings, a third with current income, and a third with loans.

Now's also the time when many savers are struggling to cobble together a down payment on a first home or a larger one to accommodate a growing family.

You may be tempted to tap your retirement savings for a loan, but just because you can, doesn't mean you should. Although debt payments and any interest will go back into your 401(k), you'll miss out on potential growth of the amount borrowed from your account.

An empty nest often can free up funds for retirement.

In 2026, savers ages 50 and older can contribute an extra $8,000 to a 401(k) plan, for a total of $32,500—and an additional $1,100 to an IRA, for a total of $8,600.

Note, however, catch-up contributions must go into a Roth 401(k) account using after-tax dollars if your FICA wages—pretax earnings before contributions to tax-deferred retirement accounts and excluding earnings used for health care premiums and HSA contributions—exceeded $150,000 in 2025.

Retirees often hold the bulk of their savings in a traditional 401(k), meaning they must pay ordinary income tax when they begin taking withdrawals in retirement. While you can't predict future tax rates, having a mix of account types now can help provide tax diversity to give you more control over your tax exposure later on. To do so, you could:

• Max out your HSA. Health care costs in retirement continue to rise, so building up tax-free savings for such expenses can help keep your taxable income low. Plus, once you reach age 65, you can make withdrawals for nonmedical purposes, which will be taxed only at your ordinary tax rate—similar to an IRA. In addition to the annual limits, you are eligible for an extra $1,000 catch-up contribution if you're 55 or older.
• Contribute or convert some funds to a Roth IRA. If you have substantial savings in a tax-deferred 401(k) or IRA, required minimum distributions (RMDs) at age 73 (or 75 if born in 1960 or later) could trigger a large tax bill. To mitigate this, you could start contributing after-tax dollars to a Roth IRA—which has no RMDs and whose withdrawals are generally tax-free, so long as you're 59½ or older and it's been at least five years since your first contribution. If you exceed contribution income limits, you could instead convert a portion of your traditional IRA to a Roth IRA. You'll pay income taxes on the converted amounts, but a Roth conversion will reduce the tax-deferred balance subject to RMDs.
• Save more in a taxable brokerage account. While realized gains in such accounts are subject to taxation, the principal is not.

Most people anticipate their living expenses will drop significantly in retirement—but that may not be the case. A realistic spending plan involves both subtracting costs you no longer expect, like college tuition and possibly your mortgage, and then adding those necessary to be the kind of retiree you envision, like travel, health care, and annual gifts to children or grandchildren.

Nearly 70% of those over age 65 will require some type of long-term care¹—often at considerable expense.

Long-term care insurance can help protect you from having to sell assets to pay for your care. The most cost-effective time to buy is between ages 55 and 65, but you have a better chance of qualifying for a policy when you're younger and more likely to have fewer health issues.

To maintain your current lifestyle in retirement, here's how much you should have in savings at various points along the way.

High earners and those planning to splurge in retirement should consider using the higher end of the multiplier ranges. If you're in between ages, you can use either the multiplier closer to your age or average the multiplier ranges of the ages you fall between to estimate your savings goal.

For example, if your current age is 50 and your current income is $200,000, you should have between $1 million and $1.4 million saved by now.

60s & 70s: Smart strategies can help secure a comfortable future.

Workers ages 60 to 63 can contribute an additional amount over the regular catch-up contribution amount to their 401(k) or similar plan. In 2026, that means $11,250, for a total contribution limit of $35,750.

In retirement, you want to avoid having to sell assets in a down market to fund your expenses—especially early on, which would undercut your remaining years of growth potential. Keeping two to four years' worth of expenses in low-risk investments, such as CDs or short-term bond funds can help you ride out a recession.

Now's the time to start figuring out your cash flow from tax-advantaged accounts, taxable accounts, pensions, Social Security, and other sources. The mix may look different early in retirement—before, say, Social Security kicks in (see "Strategize for Social Security")—but a financial professional can help you create a tax-smart cash flow plan.

You can start taking reduced benefits at 62, but you significantly increase your lifetime benefit by waiting until full retirement age (66 or 67, depending on your birth year). If you can afford to wait even longer, each year you delay past your full retirement age will get you an extra 8% in benefits, up to age 70—after which point there is no incremental benefit.

When you become eligible for Medicare, you must apply during your enrollment window—typically the seven-month period starting three months before you turn 65 and ending three months after your birthday—or face penalties. However, you may be able to delay Medicare enrollment if you have health insurance through your or your spouse's employer.

By now, many people have adjusted to retired life—but that doesn't mean your circumstances won't continue to shift. Here's what to keep on your radar:

At age 70½, you're eligible to make up to $111,000 in qualified charitable distributions (QCDs) from any tax-deferred IRA account in 2026. That can satisfy all or part of your IRA RMDs, and you can exclude your distributions—up to the limit—from your federal taxable income. State taxes may differ.

If you have tax-deferred savings, you must start taking RMDs once you turn 73 or face a penalty of up to 25% on the amount you failed to withdraw. You can delay your first RMD until April 1 of the year after your 73rd birthday, but you still must take your second RMD by December 31—which could trigger an especially large tax bill that year.

An annual check-in with a financial planner can help ensure your retirement paycheck is sufficient—and sustainable. A healthy person of means can expect to live into their 90s—so make sure your plan is designed to go the distance.