Saving Goals for Every Age

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It seems that current financial news is laser-focused on the crisis of skyrocketing student loan and credit card debt. While it's easy to focus on what the average American owes, we often forget that there is a savings crisis going on at the same time.

According to a 2017 GOBankingRates survey, more than half of Americans (57 percent) have less than $1,000 in their savings accounts. An astounding 39 percent of Americans have no savings whatsoever.

Retirement savings aren't faring well, either. According to a 2016 retirement confidence survey, more than a third of workers over age 50, and half the surveyed retirees, had less than $25,000 put away for retirement. Imagine trying to live the decades of your golden years on such a small nest egg.

It is time to save more money. Start following these savings goals for every decade of your life, and you won't end up as a sad savings statistic.

In your 20s

Don't waste your 20s thinking you have plenty of time to earn more and save more. Putting away even a small percentage of your income each month can translate into big savings by the time you hit your 50s.

Savings goals

In your 20s, your first goal should be to start an emergency fund and build it to $1,000. Setting up this emergency fund gives your finances a little cushion so that you can avoid dipping into debt every time something goes awry. Once you hit the $1,000 mark, build up your emergency fund to three to six months' worth of daily living expenses. This will protect your finances even further against expensive emergencies or a job loss.

Retirement goals

Before you leave your 20s, use your gross annual income as the target amount for how much you should have saved for retirement. For example, individuals making $40,000 per year should try to have $40,000 saved in their retirement accounts before turning 30. This goal sounds daunting, but it's achievable, especially if you start earlier rather than later. (See also: 5 Retirement Accounts You Don't Need a Ton of Money to Open)

If your company offers automatic deductions from your paycheck into a 401(k) each month, make sure you're enrolled so you won't have to consciously make the sacrifice. If you work for a company that offers a 401(k) match on a percentage of your contributions, make sure you're contributing enough to get that match. Otherwise, you're leaving free money on the table.

In your 30s

With the growing pains of your 20s out of the way, it's time to step up your personal finance game. During this decade of your life, you'll ideally start earning more money and keep the ball rolling on your savings goals. Remember to steer clear of unnecessary debt: In your 30s, you may be balancing a student loan with a new mortgage payment, so the less additional debt you take on, the easier it will be to reach your money goals.

Savings goals

If you have more expenses or are earning more money than you were in your 20s — especially if it's a lot more — you need to grow your emergency fund to a larger cushion. Aim to cover a year's worth of your daily living expenses (payments on your mortgage, student loan, credit cards, utilities, etc.). Once your emergency fund is fully funded, you want to keep that money there. Only dip into it when an emergency happens. After your financial emergency has been dealt with, you should get back to fully funding the account. (See also: 8 Ways to Decide if It's a "Fund-Worthy" Emergency)

Retirement goals

In your 30s, focus on doubling the amount in your retirement accounts to twice that of your annual gross income. Make sure your retirement portfolio is not set to an ultra conservative investment mix. You have several decades before retirement, plenty of time to recover from any market downturns, and you can afford to set your portfolio allocation to a higher risk. This will increase your account's earning potential while it still has a long time to grow. (See also: 8 Steps to Starting a Retirement Plan in Your 30s)

In your 40s

Your 40s can feel like an overwhelming financial decade. It's likely you have a lot on your plate; you may be trying to maximize your retirement savings while also putting away money for your kids' college education. Don't get discouraged; it's more important than ever to stay on the ball. (See also: 6 Personal Finance Rules to Live By in Your 40s)

Savings goals

At this point, your emergency fund should still have enough to cover a year's worth of living expenses. Once you've built enough safety savings, your extra dollars would better serve you elsewhere.

Your extra money should first go toward your retirement and paying off any high-interest debt. If your retirement accounts are well-funded, and your debt is low, you can then send your dollars to other important savings accounts, like a college fund for your kids, a family vacation fund, or a home renovation fund. Aim to contribute 20 percent of your monthly take-home pay to your desired savings account each month. (See also: 5-Day Debt Reduction Plan: Pay It Off)

Retirement goals

As mentioned above, retirement is a major priority now. It's more important to build your retirement savings than it is to put away money for your kids' college tuition or an unnecessary expense like a family vacation. Your kids will have options when they attend college, whether in the form of student loans, scholarships, or AP credits. You will not have any options if your retirement savings are not enough.

Aim to save four times your annual gross income in your retirement accounts before you leave your 40s. You don't have to switch your portfolio asset allocation to low risk, but consider revising your retirement accounts to a more moderate risk level. With your retirement savings looking healthy, don't fall into the temptation of dipping into it for emergencies or to pay your child's college tuition. It is seldom worth it. (See also: Are You Ruining Your Retirement by Spoiling Your Kids?)

In your 50s

As you enter your 50s, retirement is visible on the horizon. You may be facing unique challenges during this decade, such as changes to your health or caring for an elderly parent. This is the time to cover all your bases; accelerate your savings and play catch up where you need to. (See also: 6 Financial Steps to Take When Your Aging Parents Move In)

Savings goals

Your emergency fund should still reflect at least a year's worth of living expenses. If you have an aging relative who may need your care, or a health issue that threatens to leave you out of work, you may need to build your emergency savings further.

Your 50s are also the time to get serious about debt repayment. At this point, high-interest credit card debt is a large threat to your financial wellbeing. When you retire, you'll be living on a fixed income. If you didn't save enough money throughout your working life, that income may not be very high. The last thing you'll need to worry about are the bills piling up for your credit cards, car loans, or mortgage payments. Tackle these things as best as you can, now. The less debt you bring into retirement, the better.

Retirement goals

Before you leave your 50s, strive to have six times the amount of your annual salary saved for retirement. Your portfolio should now be managed as fairly low risk, though with people living longer than ever, it may still make sense to own a few higher-risk investments such as stocks.

In order to catch up on retirement savings later in life, take advantage of the additional money you can contribute to your retirement accounts once you hit age 50; in 2018, it's an additional $6,000 per year to your 401(k), and an additional $1,000 per year to an IRA. (See also: 5 Ways Longevity Is Changing Retirement Planning (And What to Do About It))

In your 60s

You are on the cusp of retirement, but this doesn't mean now is the time to slack off on savings. You should be working extra hard toward your goal of financial stability for your golden years.

Savings goals

The goal is to enter retirement with very little financial worry. You still need an emergency fund in retirement. If you don't have any liquid savings set aside for a crisis, focus on building that up. If your emergency fund is stocked, every extra dollar should go toward contributing the max on your retirement accounts and paying off the rest of your debt.

Retirement goals

Will retirement contributions even make a difference at this point? Yes! Boost your retirement funds as much as possible in the last few years you're still working. It's important to remember that life happens. You may have a plan to retire at 65, but a health issue, caregiving obligation, or even a layoff could force you to retire early. In a situation like that, you'll be so glad you continued contributing to your retirement accounts past age 60. (See also: What to Do if You're Laid Off Before You Retire)

Even in an ideal scenario, you'll still be relieved when you're ready to officially kick off your retirement with a well-stocked nest egg.

How much do you have saved?

How are you faring for your age group? Do you need to save more or are you right on track? If you are behind, don't get discouraged; now is the time to get your budget under control and accelerate your savings for a financially secure future.

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