Steps for every stage of life

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It’s never too early to start planning for retirement. Knowing what strategies to employ at each phase of your retirement planning will help you develop an overall strategy that will work no matter what your age. With that in mind, BusinessNewsDaily asked three financial experts what workers should do at each stage of their career to ensure they retire with enough savings.

What to do before turning 30

retirement savings
Credit: Retirement Image via Shutterstock

Budget and create a plan

First and foremost, people must put a retirement plan in place. Not only should this plan include how people will save, but it should also focus on when they want to retire.  This has the benefit of focusing workers on what they must do in order to clearly establish their retirement goals. 

"To stick your money haphazardly into retirement funds and just say I want to retire by a certain age, is not as effective as really thinking about what kind of money you need to retire off of," said Leslie Tayne, a lawyer with more than 10 years of experience in consumer and business financial debt-related services. "You may have the goal to retire by a certain age, but if you don’t have the correct vehicle to do so you may get caught short. People really need to research and see which stocks or bonds will be performing to see how much money will grow and that is true for any investment."

However, before, savers can ever start that plan, they must set a budget, Tayne says. 

"People need to figure out their budget first because perhaps you find out that there is no money to even place into retirement," said Tayne, the founder of the law offices of Leslie Tayne. "You need to know how much money you are talking about because you will determine which vehicles will be accessible immediately, or what you need to do to get to them."

Click here for two more strategies to employ in your twenties.

What to do before turning 40

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Fix your plan and know your financial situation

Before thinking about retirement, all workers need to first understand their financial situation and, in particular, their financial obligations. Part of that understanding comes from knowing that financial plans may shift and change as you get older. For that reason, workers would be well served by amending any existing plans and continuing to monitor their financial situations as they get older.

"Too many people look at retirement as a subjective thing that is too far away and something they don’t need to worry about now," said James Roberts, partner at Roberts and Taylor Wealth Management Group. "You need to plan for retirement the same way you prepare for a house, knowing you need a 20 percent down payment. Then you look at your budget and see what you need to save to reach it. If you do that, you will be more likely to [be able to] afford the house you want, and the same is true for retirement."

Roberts says people who either start or continue to save in their thirties must focus on establishing a pattern of good spending habits in order to reach their retirement goals. "If you wait until later in life to form a plan, your financial spending habits have been determined for several decades at that point," said Roberts. "It is hard to teach an old dog new tricks. If you can change that behavior at 30 and spend the next 20 to 30 years focused on your retirement goals, you will be more likely to reach them."

Click here for two more strategies to employ in your thirties.

What to do before turning 50


Plan for major life events

Retirement planning can be a challenge at each stage of life, but new challenges in particular appear once workers turn 40. To successfully arrive at their retirement goals, workers must be sure to factor in those events.

"People in their 40s are what I call a part of the 'sandwich generation,' meaning they are taking care of their parents and their kids, so they have a lot of expenses," said David Ogman, financial adviser at The Shapiro Ogman Group at Morgan Stanley. "That leaves them with the decision to try to save for their own retirement or do their best to help out their children and their parents with their investments."

Despite that unique set of challenges, Ogman says that workers can in fact make a great deal of progress in their retirement goals before turning 50.

"Use your 40s as the peak of your career to save money, so that in your 50s it is smooth sailing," Ogman said. "Although these days, as we discussed, people are living longer, thus working longer, so you can use both your 40s and 50s to really sock away money into your investment accounts. You can remain fairly aggressive in your 40s, investing in blue-chip growth stocks, REITs and commodities (through an ETF or mutual fund), and then revisit the allocation in your 50s when you tweak the allocation to include more bonds."

Click here for two more strategies to employ in your forties.

What to do before turning 60

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Shift away from risky options

Shift away from risky options While there may be a time and place for risky investments when saving for retirement, most experts agree that tolerance for risk should decrease as workers approach their retirement goals.

"When you are young, you have plenty of time to recover, but when you are in your 50s and getting closer to 60, you don’t have that luxury," said Steve Gaito, director of My Retirement Education Center . "The premise I follow is, how much return do you need to reach your goals? It doesn't make sense for a person to take more risk and possibly go backwards, but a person who hasn’t saved as much should look to be more aggressive."

To help guard investments from risk, Gaito says workers should manage investments more conservatively as they approach retirement. Those who do not follow that advice are unnecessarily exposing themselves to risk, Gaito says.

"I think there is a misconception out there that volatility actually gives you a better return," said Gaito. In reality, "you are trying to manage the volatility of your portfolio. "I give an example with two portfolios: if one has 50 percent return the first year, loses 20 percent the second year and has no return the third year, it has an average return of 10 percent. Compare that to another portfolio that does a 10 percent return each year for three years, and it’s the same return."

Click here for two more strategies to employ in your fifties.