When you start working, retirement can feel very far away. Young people often feel like thinking about retirement income is a task for later in their lives. It’s never too early to start planning for a secure retirement, though.
Of course, the details of your planning will shift as you get closer to your retirement date. Learn how to tailor your retirement planning by age in this guide.
Defining Retirement Income
Retirement income is the money you receive after you stop working. This money can come from a variety of retirement income sources, such as Social Security payments, pensions, and retirement account withdrawals.
Just like income from working, retirement income can be very different from one person to another. Someone who starts saving early and contributes regularly to a well-invested retirement fund will likely have much more income to work with in retirement than someone who does not take those steps. That’s why planning ahead is so important.
People often ask themselves questions like “How much should I save for retirement?” or “What is a good monthly retirement income for a couple?” The reality is that there’s no set number that will work for everyone. Your retirement savings goal will depend on many personal factors, such as where you live (or plan to live in retirement), how much you expect your expenses to be, and the returns you expect from your investments.
Think about the different sources of income you can create to have available in retirement and use a retirement income calculator to help determine your goal number.
Planning in Your 20s: Start Strong, Build Habits
In your 20s, you’re still starting out in your career, but that doesn’t mean you should ignore retirement planning entirely. Investing early means your retirement money will have much more time in the market before you retire. That extra time helps you grow your money and reach a much higher target through the power of compound returns.
Compare, for example, someone who starts investing $200 per month at age 20 versus age 40. Assuming they get a 10% average return on their investments and retire at 65, the one who starts at 20 will have $1.7 million at retirement, while the one who starts at 40 will have just $236,000. Even though the difference in their total contributions is less than $50,000, the person who starts saving for retirement 20 years early is exponentially better off.
In your 20s, try to take advantage of employer-sponsored business retirement plans, like 401(k)s. Companies often match your 401(k) contributions up to a certain amount, so don’t leave that money on the table.
Focus on saving money rather than spending when possible. A little bit saved and invested for retirement today can add up to a lot by the time you actually retire.
Planning in Your 30s: Growing Income, Growing Responsibility
In your 30s, as you gain more experience in your field, you may receive a higher salary as compensation. Consider increasing your retirement contributions as your income rises.
A good way to stay consistent is to decide on a percentage of your income to save for retirement, like 10% to 20%. For example, if you picked 10% and were earning $50,000 per year, you’d invest $5,000 annually in your retirement accounts. If you got a raise and started earning $60,000 per year, you’d increase your retirement contributions to $6,000 annually.
You may need to balance retirement savings with other big personal finance goals in your 30s, such as buying a home, saving for kids, or traveling. Break down your income to see how much you can devote to each goal depending on when you plan to achieve it. Separating your savings into a separate savings account can help you see where you’re at.
Also, consider exploring Roth IRAs (individual retirement accounts) and health savings accounts (HSAs) as part of your retirement income planning.
Planning in Your 40s: Catching Up and Refining Strategy
In your 40s, focus on maxing out your retirement accounts. As of 2026, individuals under 50 can contribute up to these limits in their retirement accounts each year:
- $24,500 in your 401(k), 403(b), or governmental 457 plan
- $7,500 in an IRA account
Keep in mind that, depending on your income level, you may be phased out from making traditional or Roth IRA contributions.
Address any changes in your financial life while you’re saving for retirement. For example, if you no longer need to spend as much on childcare because your children are in school, you may be able to put more toward retirement savings.
Run a retirement needs assessment to figure out where you are with your financial planning for retirement and how much you still need. Use retirement services
for help.
Planning in Your 50s: Accelerate and Protect
Once you hit 50, you can take advantage of catch-up contributions. These rules set higher contribution limits so you can invest more in your retirement accounts each year. In 2026, the catch-up contribution limit for 401(k), 403(b), and governmental 457 plans is an extra $8,000 annually.
Start income stream planning, too. Look at where you’ll be getting income from in retirement and how much, so you can make adjustments as needed. Be sure to evaluate your insurance and long-term care needs in your retirement budget as well. Working with a professional to help you C.A.R.E. for your future can be very helpful at this stage.
Planning in Your 60s: Transition to Retirement
Finally, in your 60s, it’s probably time to transition into retirement. Figure out when you should start taking Social Security payments based on your needs. The longer you wait, the higher your payments will be.
Create a withdrawal strategy to manage your other retirement funds, too. Decide how much to take out and when. If possible, consolidate and simplify your accounts so they’re easier to manage.
Income Streams and Challenges
To protect your financial security in retirement, make sure you keep in mind key factors like:
- Dealing with inflation, which can eat away at the buying power of your savings
- Navigating market volatility, as your savings may increase and decrease in value
- Planning for healthcare costs that will likely increase with age
- Investing your retirement portfolio across annuities, pensions, and dividend-paying investments
Trust the Right Bank
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