Retirement Planning for your 20s, 30s, 40s, & 50s

If You're in Your 60s:

• Build a cash cushion to cover at least two years of expenses. If the stock market or the bond market tumbles, you do not want to be forced to sell off your investments at a low price just to cover your everyday bills. And you will be less stressed over market fluctuations.

• Control spending. Start now. One guideline is that you want to spend 4% or less each year from your retirement savings, or $4,000 if you have $100,000 saved.

• You can start collecting Social Security at age 62, but you must apply for benefits four months before you want to start receiving them. If you consider yourself likely to live well into your 80s or 90s, you can consider delaying collecting Social Security until you reach full retirement age. Go to www.ssa.gov. Your monthly check goes up with each year you wait to collect, but consider life expectancy and your likely financial needs.

If You're in Your 50s:
• Adapt to new technologies, new duties on the job, new challenges. Don't quit for a reactionary reason, such as a shift change, or in a moment of weariness or frustration.

• Cut your debt. Save more money. If you are 50 or older, you can contribute up to $6,000 to an IRA or Roth IRA. (Under 50, the max is $5,000.) For 401(k) plans, the maximum pretax contribution limit is $16,500 for 2010 and could be higher in 2011, depending on inflation.

• Pay attention to pensions. You may have one coming from a previous employer. Look through your paperwork. Contact plan administrators. Or go to www.pensionaction.org or www.pensionhelp.org.

If You're in Your 40s:

• Invest money for retirement: If you're saving 4%-5% of your pay each year in a retirement account, bump that to 10%-15%. Opt for a diverse mix. At age 45, you might want 55% or so of your long-term IRA or 401(k) in mutual funds that invest in stocks and the rest of it in bonds.

• Try to build savings outside of a retirement plan, too, to cover emergencies and other expenses.

If You're in Your 30s:

• It's not easy in your 30s to think about retirement, but force yourself. Get a target savings amount. Go to www.choosetosave.org and click on the link for the "Ballpark Estimate" retirement calculator.

• When you change jobs, make sure you keep money invested in a retirement account -- don't cash it out.

• If available, sign up for a 401(k) when you change jobs.

• Try to cut your debt so you can save more.

If You're in Your 20s:

• It's never too early to cultivate good habits that will build the financial foundation you need for retirement, such as paying off your credit card each month and paying your bills on time.

• Pay off your student loans.

• Do not put off saving for retirement. If money is tight, sign up to have at least a tiny amount, even if it's just 1%-2%, taken out of your paycheck toward a 401(k).

SOURCE