Retirement Savings Milestones in Every Decade of Your Life

Although everyone has his own unique financial targets, you can use some benchmarks to see whether you are hitting your retirement goals. For each decade of your life, you have to accomplish certain financial goals that build up towards your retirement dream.

by Jeanne Jampac, 03 January 2018

Secure a happy and comfortable future for yourself and your loved ones by ensuring these financial goals per decade.

How much you need to save for retirement depends on the lifestyle you want to lead. For most of us, it is generally about living comfortably. But how does a comfortable life translate that into figures? To happily retire, you need to have a benchmark on how much you need in the future in order to know if you are saving enough today. According to financial experts, the following are the ideal milestones to hit in every decade of your life.

In Your 20s

The perfect time to start developing good financial habits is when you are fresh off college and ready to be independent. Around this time, you have to secure your own health insurance and start contributing to a retirement plan. Likewise, make sure to have an emergency fund equivalent to at least three months’ salary.
By the time you hit 30, your savings should be equivalent to your annual salary. In other words, if you are earning PhP300,000 a year, you should have at least PhP300,000 in your retirement savings. 

In Your 30s

Your 30s should be a time when you are both emotionally and financially stable. During this period, you should be aiming for a stable career and property investments. If you accumulated debt in your 20s, make sure to pay it off completely over the course of the 10-year period. Remember, the sooner you pay off your debt, the sooner you can allot a portion of your income to savings and investments. As for property investment, this is the time to start saving for a down payment on a house as real estate costs can get really high. In addition, whether you are planning to start a family or remain single, this is an ideal time to secure life insurance for yourself and your dependents. 
By the time you hit 40, you should have twice your annual salary saved. Assuming your salary increased to PhP500,000 a year, you should have at least PhP1,000,000 in your retirement savings. 

In Your 40s

Your 40s should be a time when you are already established in generally all facets of life, and this should manifest in your finances. By this time, you should have eliminated all your debts. You should also look into increasing your source of income by either seeking a promotion or a new job that pays higher. You can use this additional money to beef up your retirement plan contributions or make other investments. For those who have kids, now is the time to secure an educational plan for college funding. 
By the time you hit 50, you should have at least thrice your annual salary saved. Say, if you are earning PhP700,000 a year, you should have at least PhP2,100,000 in your retirement savings. 

In Your 50s

If you are looking to retire at 60, you should almost be at the finish line by the time you’re 50. However, this does not mean you can get complacent. This period is crucial to getting that “happily retired” status you have been dreaming of. Check with a professional to see whether you are on track to meet your retirement goals or if you need to make adjustments in order to reach it. Now is also the time to review your other plans and insurances, and see if they meet your needs and your dependents’. 
By the time you hit 60, you can start withdrawing from your retirement plan and maybe pursue other dreams you have made for yourself and your loved ones.