Savings for retirement should be a consistent priority throughout life. Playing the 401 k rules to your maximum benefit will contribute to those savings. Chas Schwab developed the following timeline.
In Your Twenties?
Fifties and Sixties?
- Resist the temptation to cut back on savings for retirement, regardless of what's going on elsewhere in your life
- Put bonuses and raises into your savings for retirement.
- Make savings for retirement a priority. Or course, this priority will be met with competing goals, such as a house or your children's college education. But remember: Loans are available for homebuyers and for Johnnys college ride, but there are no loans or financial aid options to help pay for retirement
- Track your spending. That way you'll find ways to cut back on expenses and enhance savings for retirement
- Continue to put bonuses and raises into your retirement savings
Forties: Max Out Contributions to Pension Plans per Pension and 401 k Rules
- Contribute the maximum-allowed amount to your 401 k or other employer retirement plan according to 401 k rules
- After you contribute the maximum to your 401 k, consider the benefits of contributing to a traditional or Roth IRA. Put bonuses
and raises into your savings for retirement
Fifties and Sixties: Follow 401 k Rules for Catch-up
- Take advantage of "catch-up" contributions to your retirement accounts. Pension and 401 k rules allow these catch-ups after age 50
- Consider retiring later or working part-time in retirement to help increase your income
- Become a more conservative investor than before. Consider decreasing your
proportion of stocks to help reduce the impact of market volatility on your portfolio
Topic: Retirement Planning
Savings for Retirement
Tips from the Chicago Herald Tribune
Americans in Their 60s
Charles Schwab Timeline
Do This at Age 25
Do This at 45
Do This at 65
AARP Retirement Calculator
Retirement Planning Quiz
The Benny Award