The journey to retirement is an ongoing process, filled with a marathon of decisions. We at Peoples Bank and Trust Co. understand that each phase of your life holds different questions and concerns along with new and exciting adventures. If you’re curious what your path to retirement may look like, take a glance at these common retirement thoughts throughout each decade of savings:
Age 20-30
- Should I pay off student loans or save for retirement?
- My 401(k) should be plenty for now.
- How much money do I really need to retire?
- If I can save something toward retirement, I feel like I’m doing good.
- What are the differences between a Roth 401(k) and a Traditional 401(k)?
During this time the most important part of your retirement savings is getting started. Whether this is through your company’s 401(k) or an independent IRA, the sooner you save, the more funds you can accumulate through interest. While paying down your student loans are equally important, the one commodity they could limit for your retirement is time. Even by saving a small amount early, you can have the potential to save more in the long run.
Age 30-40
- Kids, cars, and a home – where do I find extra income to save for retirement?
- I got a bonus! Should I save it or spend it?
- Save it! My future self will thank me.
- When do I really want to retire?
- I can’t wait until I don’t have to work for a living anymore.
Throughout this decade you may see a lot of exciting milestones. Whether these come in the form of promotions, expanding families, or other new personal opportunities, they each will add to the tasks you’re currently juggling while saving for retirement. To help manage your life and your money, we recommend automating your savings to ensure that no matter what life has in store, your retirement savings remains consistent.
Age 40-50
- I’d love to still have money to spoil any future grandkids!
- I’ll open an IRA to supplement my 401(k).
- I’m going to see what I need to save to still reach my savings goal.
- My savings should have a great future if I stay on track!
- I don’t want to have to work unless I want to.
Now is when you want to begin fine-tuning your retirement to the specific details. If you would like to retire in a certain location, you’ll need to budget the anticipated cost of living in addition to any other annual spending. This is also the perfect time to determine the age you would like to retire. The average age for Americans to retire is 67, however, this can be lower than 50, or higher than 75, it all depends on your preferences and planning.
Age 50-60
- I can’t retire yet, I’d just be bored!
- I’ll retire after 60; I can still work part-time if I want to.
- Thanks younger me!
- I can do all the things I love during retirement! Gotta love that compound interest.
- I’m so glad I started saving when I did.
After you decide when and where you want to retire, the final specifications begin to unroll. When you start taking distributions, and how much you take, is completely up to your discretion, depending on the retirement account. Many Americans continue working part-time, in order to bring in additional income and give their savings several more years of compounding interest. This can be a valuable option, but it’s not for everyone.