The Ultimate Age-Based Guide to Retirement Savings

It’s never too early to plan for retirement. No matter where you are on your journey, there are smart decisions you can make today that will pay dividends tomorrow. We’ve outlined a basic financial to-do list for every decade of your life so you can enjoy your golden years in comfort. If you haven’t accomplished everything in each decade, don’t worry! Today is the perfect time to start.

Savings Goals for Your 20s

  • Start an emergency fund. Open a savings account and aim to save enough money to cover 3 to 6 months of expenses. This way, if you lose your job or get sick, you’re less likely to accumulate credit card debt, default on student loans, or dip into other savings (like retirement).
  • In your 20s, you’ve likely aged out of your parent’s insurance coverage and now it’s time to secure some of your own. Common ways to acquire insurance are through your school, job, or through the health insurance marketplace.
  • Set up a retirement account and start saving. You can sign up for your employer’s 401K plan, or enroll in a Roth IRA. The important thing is to be consistent. Have a set amount automatically drafted from your account so you won’t’ be tempted to skip a month. Even as little as $5 will add up, thanks to compound interest.

Savings Goals for Your 30s

  • In your 30s, you’ve likely spent 5 or more years establishing your career. Now it’s time to look at any remaining student loans and create a plan to pay them off. You can use a loan payment calculator to estimate how much you can afford to pay each month and how long it will take to pay the loan in full.
  • If you’re currently renting, chances are you’ve dreamed about purchasing your own home. Now is the time save for a down payment. Your goal should be 10-20% of the cost so you can have immediate equity and avoid private mortgage insurance.
  • In addition to your health insurance, you should add life insurance and a will. Life insurance may be offered through your employer, and a simple will can cost as little as $200-300 to establish.
  • Revisit the amount you save for retirement each month. In your 30s, it’s likely that your income is a bit more consistent. Most experts recommend saving between 10-15% of your pretax income in your established accounts each month.

Savings Goals for Your 40s

  • Perhaps you’ve purchased a home and have set up your retirement funds. To increase your available savings, eliminate any non-mortgage debt like credit cards or student loans. If this feels daunting, consider using the snowball or avalanche method to tackle the task.
  • Give your budget a second look and see if you have any extra cash to throw toward your mortgage principal every month. Paying extra on the principal will increase your equity and shorten the life of your mortgage, saving you money on interest in the long term.
  • If you have children, set up a college savings account. College may seem like a long way off, especially if your little ones are still in grade school, but it will be here before you know it and having some funds tucked away can make a big difference.

Savings Goals for Your 50s

  • Now that you’re on the home stretch toward retirement, maxing out your retirement contributions is a great idea. Saving the maximum amount allowed each year will ensure you stay on track with your goals.
  • Create a living trust. A living trust directs your assets if you become ill, disabled, or impaired by the symptoms of aging. A designated trustee executes the trust to your benefit and the benefit of your family while you are living.
  • Research long-term care insurance and secure the option that’s best for you. Planning for retirement is all about preparing for the unknown. Long-term care insurance helps you pay for care services you may need while protecting your nest egg.

Savings Goals for Your 60s

  • Retirement is right around the corner — and you’ve earned it! Meet regularly with your financial advisor to refine your goals and avoid surprises so you can retire with confidence.
  • You’ve worked hard to set up financial stability for yourself and your family. Review your life insurance and will to make sure it’s current with your situation and wishes.

Get Help to Retire with Confidence

Whether you’re just starting out, or are approaching retirement years, Neely’s can help you stay on track. Don’t be afraid to ask for help — Neely’s has been Roanoke and Vinton’s trusted source of financial expertise since 2007. Our friendly professionals are standing by! Contact us or stop by our offices in Roanoke or Vinton.

Emergency Funds: Preparing for the Unexpected

It can feel hard to pay bills each month, much less save for something that may or may not occur. But If the Covid-19 pandemic has taught us anything, it’s that the unexpected can and does happen. That’s why you need an emergency fund.

Experts suggest saving 3 to 6 months of expenses in an emergency fund. This kind of savings may feel like an unattainable luxury (especially during a period of inflation) but having even $500 tucked away can make a big difference in your financial stability. No one likes to think about potential crisis, but it’s even worse to be unprepared. Read on to learn 5 ways an emergency fund could help you in the future.

Unexpected Medical Bills

In 2020, 17% of adults had major, unexpected medical bills with the median cost between $1,000-$1,999. Dealing with a health emergency is one of the top stressors in life. Adding financial strain to an already stressful situation can make your health outcomes worse. An emergency fund can give you peace of mind while you or a loved one recovers.

Personal Property Repairs

If you’re a homeowner or have ever purchased a new car, you probably remember how it felt to be handed the keys to your new property. The possibilities and the sense of accomplishment make it a thrilling experience. However, ownership often comes with maintenance costs. Perhaps you need to replace the roof, or your car needs a new set of tires. Being able to draw on an emergency fund can take some the stress out infrequent but routine upkeep.

Unemployment

An estimated 23 million people lost their jobs in April of 2020. Many wouldn’t have predicted this record number of layoffs just a year prior. Job loss can be scary but having a financial cushion can help you bridge the gap between jobs. One way to be prepared is to add all your monthly expenses like housing, food, and transportation. Then strive to save enough to cover three months, giving you time to find a new job without taking on debt.

Travel to Attend Family Emergencies

What if you had a family emergency or death that required travel? Would you be able to purchase a last-minute plane ticket or hotel? Knowing you can cover these costs can be a huge relief in a time of potential stress and grief.

Pet Health Emergency

According to the National Pet Owners Survey, conducted by the America Pet Products Association, 70% of U.S. homes owned a pet in 2021. Even the most pampered pets can have health emergencies that require surgery. It’s always a good idea to save money in case your beloved animal companion requires unexpected veterinary care.

The reasons to start an emergency fund are numerous and there are ways to make saving easy. Begin by opening a dedicated savings account and set up an automatic contribution each month. You’ll love the peace of mind you gain as your savings grows. As a trusted local provider of accounting and financial services, Neely’s Accounting is here to help. We’ve assisted countless clients in the Roanoke region. Call or contact us today to let us support you as you build your financial safety net.