As the old saying goes, age is just a number. There’s a lot you can do, regardless of how many candles you’ve blown out on your birthday cake. However, there is value — in more ways than one — in hitting certain financial milestones by key ages.
By the time you’ve reached the big 5-0, odds are, you have your eye on how to grow your wealth and security in the here and now while also looking to the horizon toward retirement.
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If there’s one person who knows a thing or two about hitting personal finance goals, it’s Suze Orman. From saving to investing to, of course, planning your retirement, she has advice that serves everyone well — especially if you’re at an age where you’re flattered to be carded at the wine store.
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Planning for retirement can feel like spinning plates: You’ve got to balance the income you need to sustain your current lifestyle with the income you think you’ll need to sustain the kind of life you want in retirement (are you a big traveler or more of a homebody?), your longevity and the return on your retirement investment portfolio.
It’s a lot to consider. While acknowledging these factors are “hard to pin down,” Orman points to a “cheat sheet” compiled by Fidelity that estimates how much you should have saved for retirement by certain ages. According to that ranking, by the time you reach 50, you should have saved around six times your current income.
Does that feel daunting? It doesn’t have to be. “The good news is that now you have a sense that you really should up your savings game,” said Orman. “Your goal, for the rest of this year, and for 2024 and beyond is to just save more. If you are contributing 6% to your workplace retirement plan, raise that to 7% or 8%.”
While it’s tempting to think of overspending as a young person’s issue, people of all ages can be seduced by the siren song of simply buying too much stuff — and not putting enough money away for your retirement. Fortunately, Orman offered a simple yet effective tip: Scour your spending habits to find extra cash you can redirect to retirement savings. For instance, if you’ve already saved $4,000 in a Roth IRA, look to add another $1,000 or $2,000.
