• KEY TAKEAWAYS
  • When you're younger you can afford to take more risk with your investments as you will have longer in the market.
  • After 50, you can make additional "catch-up" contributions in many kinds of retirement accounts.

This year, no matter how old you are, commit to improving your retirement situation.

Retirement should be a blast. If you plan well now—you can make that dream a reality.

In your 20s

It’s easy to tell yourself that you have plenty of time when you are in your 20s. No matter how young you think you are, now is the time to start saving for retirement. Compound interest will work in your favor for longer. Learn about investing, and how it works. Start contributing to a retirement account, whether it’s a 401(k) at your work, an IRA, or both. It doesn’t matter if you can only contribute a small amount; the important thing is to get started and in the habit.

In your 30s

This is a good time to really concentrate on the accumulation/growth phase of your retirement nest egg. You’ll have time to recover if you make mistakes. Plus, now that your earning power has (hopefully) increased, it’s a great time to boost your retirement savings. In your 20s, it was all about getting started. Now, you can probably afford to contribute a little bit more to the cause. Pay attention to your asset allocation, and really get serious about developing a solid retirement portfolio.

In your 40s

Now that you are starting to inch closer to retirement, it’s a good time to double-check your savings. Are you really investing enough? Do you need to rebalance your portfolio and reconsider your asset allocation? If you think that you will retire early, it might be time to start shifting from accumulating assets to preserving them. At the very least, you should be maxing out an IRA for you and for your life partner.

In your 50s

Hopefully, by this time, you have been regularly contributing to your retirement account for decades. Even if you haven’t been, you can still take advantage of compound interest if you start immediately to make significant contributions to a retirement account. You can even make “catch up” contributions to tax-advantaged retirement accounts once you turn 50. If you have been saving up over time, now is when you start moving your asset allocation to reflect safety and income over growth and accumulation. It’s also a great time to reflect on what you want to do with your time during retirement, and start making plans to downsize.

No matter your age, you should make it a goal to improve your retirement. Work on building your assets, and paying down your debts.

Plan now, invest in your retirement accounts, and your future self will thank you.

New to Betterment? As the most trusted online financial advisor, Betterment offers a fully diversified investment portfolio of 12 global asset classes, optimized to provide you the best possible returns for both retirement planning and wealth building. Betterment costs 0.15% of assets under management annually for a portfolio of $100,000 or more. Learn more here.

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