Fidelity Just Revealed What You Should Do in Every Decade to Retire on Your Terms

Retiring comfortably isn’t just about wishing and hoping. It’s a strategic game played across decades, with each stage demanding different priorities and actions. Fidelity, one of the world’s largest financial services companies, recently unveiled a comprehensive guide outlining exactly what you should be focusing on in your 20s, 30s, 40s, 50s, and 60s to ensure a financially secure retirement.

Forget the vague advice about “saving early.” Fidelity’s breakdown offers actionable steps, empowering you to take control of your future regardless of where you are in your journey. Here’s a decade-by-decade look:

Your 20s: The Foundation Builder

This is the time to lay the groundwork for long-term financial success. Don’t underestimate the power of starting early, even with small amounts.

• Key Focus: Building Good Habits and Eradicating Debt.
• What Fidelity Recommends:
  • Enroll in your employer’s retirement plan (like a 401(k)) and contribute enough to get the full company match. This is essentially free money!
  • Prioritize paying off high-interest debt like credit cards. This can significantly hinder your savings progress.
  • Aim to save at least 15% of your income towards retirement, including employer contributions. This may seem daunting, but start small and gradually increase your savings rate.
  • Create a budget and track your spending. Knowing where your money goes is crucial for making informed financial decisions.
  • Learn the basics of investing. Understanding different investment options will help you make informed decisions as your savings grow.

Your 30s: The Growth Accelerator

With career progression often accelerating in your 30s, it’s time to ramp up your savings and investment strategies.

• Key Focus: Maximizing Savings and Diversifying Investments.
• What Fidelity Recommends:
  • Continue saving at least 15% of your income, aiming to increase it if possible. Lifestyle creep can be a danger in this decade, so be mindful of spending habits.
  • Diversify your investment portfolio. Don’t put all your eggs in one basket. Explore different asset classes like stocks, bonds, and real estate.
  • Consider a Roth IRA. This can provide tax-free growth and withdrawals in retirement.
  • Re-evaluate your insurance coverage. Ensure you have adequate life, disability, and health insurance to protect your family and assets.
  • Think about long-term financial goals beyond retirement, like buying a home or funding your children’s education.

Your 40s: The Course Corrector

This decade often brings increased financial responsibilities like mortgages and children’s expenses. It’s crucial to stay on track and make necessary adjustments.

• Key Focus: Staying on Target and Addressing Potential Shortfalls.
• What Fidelity Recommends:
  • Assess your progress towards your retirement goals. Are you on track to retire when and how you want?
  • Consider catching-up contributions. If you’re behind, contribute more to your retirement accounts to make up for lost time.
  • Review your investment portfolio and rebalance as needed. Ensure your asset allocation still aligns with your risk tolerance and time horizon.
  • Pay down debt strategically, prioritizing high-interest loans.
  • Start planning for future healthcare costs in retirement. Healthcare expenses can be a significant burden, so plan accordingly.

Your 50s: The Fine-Tuner

With retirement on the horizon, it’s time to fine-tune your strategy and prepare for the transition.

• Key Focus: Solidifying Your Plan and Preparing for Retirement.
• What Fidelity Recommends:
  • Meet with a financial advisor. A professional can help you assess your situation and create a personalized retirement plan.
  • Estimate your retirement expenses. Determine how much money you’ll need to live comfortably.
  • Consider downsizing or delaying retirement if necessary. These are difficult decisions, but they can significantly impact your financial security.
  • Start planning for Social Security benefits. Understand your options and when to start claiming benefits.
  • Review your estate plan and ensure your wishes are documented.

Your 60s: The Transition to Retirement

It’s time to put your plan into action and enjoy the fruits of your labor.

• Key Focus: Managing Your Retirement Income and Enjoying Your Retirement.
• What Fidelity Recommends:
  • Create a withdrawal strategy. Determine how much money you can safely withdraw each year without depleting your savings.
  • Monitor your spending and adjust your budget as needed.
  • Stay active and engaged. Retirement can be a significant adjustment, so find ways to stay healthy and connected.
  • Continue to review your investment portfolio and make adjustments as needed.
  • Celebrate your achievements and enjoy your retirement!

The Bottom Line

Fidelity’s decade-by-decade guide provides a roadmap for building a secure retirement. While these are general guidelines, remember that everyone’s situation is unique. Consulting with a financial advisor can help you create a personalized plan that aligns with your specific goals and circumstances. By starting early, staying disciplined, and adapting to changing circumstances, you can increase your chances of retiring on your own terms and enjoying a comfortable and fulfilling retirement.

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