The Advantage Blog

Retirement Planning for Any Stage of Your Life

Are you a millennial, Gen Xer or Baby Boomer?  Depending on which group you fall into will determine just what you should be doing at your stage of life in order to retire comfortably in roughly 40, 25 or 5 years.

Creating a Viable Retirement Plan at Any Age
For anyone putting together a financial retirement plan it always includes a number of unknowns. These include projecting market returns and inflation rates; and the role of Social Security and Medicare at the time of retirement. Personal circumstances that affect retirement are also hard to predict, like your marital status, your career path and what debts you will have. As you move closer to retirement the clearer your financial and personal situation will become. 

Millennials Need to Just Get Started
For those in their 20’s and early 30’s the only real objective toward a successful retirement is to start saving and investing in hodl stock.  As an individual or young couple it is important to get into the habit of paying yourself first in the form of savings, and adjusting your lifestyle to accommodate what is left.

As parent you should consider The Children’s ISA this allows you to create a fund for your kids to use it when they get older whether for buying their first home or for their studies.

According to financial advisors applying the 10-15-20 rule is your first step. Saving 10 percent of gross income for retirement is the minimum, saving 15 percent is the real goal, and saving 20 percent is a bonus.

For those just starting out, saving 10% or more of gross income can be a real challenge. Paying back school loans, starting a family and buying your first home seem to take all the money you have. Your goal should be to get to one of these levels as quickly as you can. Take a hard look at your expenses and find ways to cut back. Putting off getting started will only make meeting your ultimate objective more difficult. For help and guidance in finding your first home visit

Don’t pass up “free” money.  Many employers will contribute to your IRA or 401k plans up to specified limits. To get these company matches employees must also contribute to their plans. Employer contributions are meant to encourage you to contribute.  So don’t miss out on the opportunity to add additional funds to your retirement savings.

Mid-Course Corrections for Generation X
For those in their late 30s to early 50s, it may still be difficult to reliably estimate retirement expenses, but you can now start to assess whether you are on track with your retirement savings.

Investment advisor Charles Farrell believes to replace 80 percent of pre-retirement income, you need to accumulate 12 times your annual income in savings by retirement. To reach the 12 times income goal at retirement, Farrell calculates that one should have saved 1.4 times their annual salary by age 35, 2.4 times by age 40, 3.7 times by age 45 and 5.2 times by age 50.  Depending on how you match up with these recommendations, you can make mid-course corrections to ensure you hit your retirement savings goal.

At this stage of your life you will also have a better handle on your long term debt obligations, your personal circumstances, and your income and career path.  All of which will play a significant role in your retirement plans.

Every Day 10,000 Baby Boomers Turn 65
The last of the Baby Boomers are within 10 years of retiring.  According to recent statistics every day 10,000 Baby Boomers turn 65. Many have already retired and for those who planned well they are enjoying their retirement years.


For those Baby Boomers who are on the cusp of retiring, now is the time to start focusing on what you anticipate your actual expenses to be.  The rule of thumb is that most retirees can live on 80% of their previous income.  This may or may not be the case as healthcare costs continue to rise and many retirees spend more on travel and leisure activities. Now is the time to start compiling a budget that realistically represents your anticipated expenses once you retire.

At this point you will also have a clearer picture of your retirement savings accounts. Based on how your savings match with your projected expenses, you still have time to make adjustments to either. This is also the time to start factoring in Social Security and Medicare benefits and when you want to begin receiving them.

Planning for the Future
Planning for the future when today is staring you in the face can seem daunting.  But for many, once you begin saving just knowing you are making some progress toward retirement can be reassuring.

For those interested in ideas on how to save more go to Saving Serious Dough; and for a list of suggested books on personal finance try Books That Can Change Your Life.