Retirement Planning by Age: Your Complete Timeline

My uncle retired last year at 64 with $1.8 million saved. My dad retired at 65 with about $180,000. Both worked similar jobs, made similar money. The difference? My uncle started saving at 25. My dad started at 42. That 17-year head start meant my uncle retired with 10 times more money despite earning roughly the same lifetime income. Time is the secret ingredient most people discover way too late.

Retirement planning isn't one-size-fits-all. What you should focus on at 25 is completely different from 45 or 55. Here's exactly what to do at each stage.

Your 20s: The Foundation Decade

Your 20s are when compound interest becomes your superpower. A dollar saved at 25 grows more than a dollar saved at any other age. Even small amounts become huge over 40 years.

Priority 1: Get the Match

If your employer offers 401(k) matching, contribute at least enough to get the full match. This is free money—typically a 50-100% instant return. If they match 50% up to 6% of your salary, you need to contribute 6%. On a $50,000 salary, that's $3,000 from you, $1,500 free from them. That's a guaranteed 50% return.

Priority 2: Open a Roth IRA

In your 20s, your tax bracket is probably low. Roth IRAs let you contribute after-tax money that grows tax-free forever. Contribute up to $7,000 annually if you can (2024 limit). In retirement, you'll pull out that money completely tax-free. That's huge.

Target: Save 15% of Gross Income

This seems impossible on an entry-level salary. Start with whatever you can—even 5%—and increase it every time you get a raise. Save half of every raise for retirement. You won't miss money you never got used to spending.

Your 30s: The Acceleration Decade

Your 30s are typically when income grows substantially. This is when you need to resist lifestyle inflation and channel raises into retirement.

Priority 1: Max Out Retirement Accounts

If possible, max out your 401(k)—$23,000 in 2024 (plus $7,500 catch-up if you're over 50). Also max your IRA—$7,000. That's $30,000 annually in tax-advantaged accounts. Sounds like a lot, but on a $100k household income, it's 30%.

Priority 2: Increase Equity Exposure

In your 30s, you have 30+ years until retirement. You can handle market volatility. Consider 80-90% stocks, 10-20% bonds. Don't panic sell during downturns—that's when you should be buying more.

Your 40s: The Catch-Up Decade

Your 40s are peak earning years for many people. This is your last chance to course-correct if you're behind.

By 40, you should have roughly 3x your annual salary saved. By 45, about 4-5x. If you're not there, now's the time to get aggressive. You still have 20-25 years of compounding ahead.

Your 50s: The Home Stretch

Your 50s are when retirement becomes real. You can see the finish line, and it's time to make sure you'll cross it prepared.

At 50, catch-up contributions kick in—an extra $7,500 annually to your 401(k) on top of the normal $23,000. That's $30,500 total. Take advantage of this if you can. These are your highest-income years; channel as much as possible to retirement.

Your 60s: The Transition Decade

This is when you transition from accumulation to preservation. By 60, you should have 8-10x your annual salary saved. By 65, roughly 10-12x.

In your early 60s, start shifting to a more conservative allocation—maybe 60% stocks, 40% bonds. You don't want a market crash right before retirement to derail decades of saving.

The Bottom Line

The best time to start saving for retirement was 20 years ago. The second best time is today. If you're behind, don't despair—focus on what you can control. Increase contributions, reduce expenses, delay retirement by a few years. Small changes compound over time, just like investments do.