7 Retirement Savings Goals Everyone Should Have

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Are you in your early 20s and starting to make your own money? Or are you already in your mid-40s with kids starting to grow up? Regardless of your age, you need to consider planning for your retirement.

It is sad to note that a quarter of Americans do not have savings for their retirement. Younger people aged 18 to 29 make up 42% of Americans who do not save up for their retirement. The retirement numbers, however, improve as people age. 

Nevertheless, millions of Americans do not know how to save. The key is to set retirement savings goals so you can retire right. 

Continue reading below as we discuss seven important goals for your retirement.

The Need to Save Up Early

We see it in the movies and we hear it from people we know: A person ending up dirt poor upon reaching his retirement age. 

Though many are aware of the risks of not having a retirement fund, they still do nothing about it.

The only time they will scramble to save money is when they are too old or weak for a 9 to 5 job. Sometimes, they will only realize the importance of a retirement plan when it’s all too late.

Hence, you need to start somewhere. In case you feel that you cannot keep up with the savings, there are options like the Secure Act to give you a boost. 

Read this article for more information on the Secure Act.

But the best way to kick-off your retirement plan is to come up with retirement savings goals. And you need to start working on them as early as today.

Retirement Savings Goals

When it comes to financial goal-setting, there is a lot to consider. However, some money goals are non-negotiable. Furthermore, you need to realize that these goals come with a timetable.

You need to attain specific goals once you reach particular age brackets.

Let’s take a look at seven of the most important savings goals you should focus on.

1. Start with an Emergency Fund

The best time to start working on your retirement goals is in your early 20s. This is the time when you are on your first or second job. Thus, your first goal is to have a fully-funded emergency fund by age 25. 

An emergency fund will serve as the backbone of your retirement plan. In case an emergency happens, the fund will cover the expenses. You want to create a fund that is equivalent to at least three to six months’ worth your salary.

Also, consider securing personal health insurance. By age 26, you’ll be living on your own. Hence, you don’t want to get sick without any coverage.

Finally, this is also the stage where you need to start your contributions to your retirement fund. Try to go for an IRA or 401(K). If you start your contributions while you’re young, you will maximize the power of compound interest

2. End Your Student Loan Debt

Once you reach 30, your focus must be beefing up your financial foundation. Thus, your first goal is to settle your student loan debt as fast as you can. This is crucial considering you’ll soon need to save up for your kids’ college tuition. To pay off your student loan sooner, consider a debt consolidation company.

Once you put to bed your student loan debts, start working on your home down payment. You want to have a home you can truly call your own, right? Then save around 10% to 20% for the down payment. 

If you already have a family, consider buying a life insurance policy. Also, establish a last will and update it every year to protect your family finances.

Lastly, increase your retirement contributions to 15% of your income to ensure you can retire securely.

3. College Plan for the Kids

By the time you hit your 40s, your main goal is to work on your kids’ college expenses. Don’t be like other parents who only start worrying about their kids’ college when they are a year away from it.

But first, make sure to eliminate all your consumer debts. These are debts that are outside your mortgages.

Moreover, make it a goal to save an amount that is twice your annual income. This is the amount you want to put into your retirement fund.

4. Reach Your Maximums

While still in your 40s, you also want to hit your savings maximum. Doing this will help you reach a target of having $1 million worth of savings by the time you reach 67. 

The computation is to save $10,000 every year with a 9% interest rate in effect. Sounds hard? This is doable if you fund your 401(K) up to the maximum limit.

5. Mix and Maintain

Another important goal is learning how to mix and maintain your investments. 

The key to maximizing the gains of your investments is diversification. This means not placing all your eggs in one basket. 

People in their 40s still have a relatively high-risk appetite. However, they must also be wise where they put their money. 

Consider investing in stocks. But make sure to leave some of your investment eligible money for more conservative options like bonds.

Additionally, you need to learn how to make tough financial decisions when necessary. Make some financial compromises but not at the expense of your retirement savings.

6. Go the Extra Mile

By the time you hit your 50s, your goals must be solidifying your financial foundation. Do this by paying extra on your home. This is doable now that you already eliminated your consumer debts.

If you finish securing your children’s college fund, channel some of your extra dollars toward your home mortgage.

Additionally, consider buying long-term care insurance.

7. Apply the Finishing Touches 

Once you reach your 60s, your goal is to fine-tune your retirement goals. Talk to a financial adviser and ask for guidance if you need to make any tweaks in your finances.

Also, revisit your life insurance and last will. Update these financial policies if necessary.

Increase Your Financial Knowledge

By working on these retirement savings goals early, you will save up more money without feeling much pressure. Furthermore, you will get to secure the future of your kids and avoid becoming a financial burden in retirement. Retire right!

But financial knowledge and budgeting isn’t all about retirement. Hence, we invite you to increase your knowledge by checking our other articles to help you retire securely. We provide guides and tips to help you become a wiser manager of your financial and retirement resources.

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