Daily Capital

Retirement Goals by the Decade

U.S. stocks closed mixed on Friday but improved throughout the session, pushing the Dow Jones to a record close. Amazon shares fell 4.3% after the quarterly earnings report. The major indexes posted a mixed weekly performance, with the S&P ending slightly lower while the Dow was up 1%. For the year, tech has been the best performing sector – up close to 22%.

Weekly Returns:
S&P 500: 2,472 (-.004%)
FTSE All-World ex-US: (+0.4%)
US 10 Year Treasury Yield: 2.29% (+.02%)
Gold: $1,275 (+1.6%)
EUR/USD: $1.17 (+.002%)

Want a clear view of your retirement?

Major Events:

  • Monday – KKR to buy WebMD in $2.8 billion deal
  • Tuesday – McDonald’s posted biggest jump in global sales in 5 years
  • Wednesday –Amazon market cap tops half a trillion
  • Thursday – Apollo raises $24.6 billion for largest private equity fund ever
  • Friday – Starbucks fell 7.5 percent after quarterly report

Our take:

While we are all trying to enjoy this summer, it’s important to take a step back and think about what little steps you’re taking at your age to better align your long term goals for retirement. In that spirit, here are a few things that you should have set up or in place to address based on your age:

Your 20s:
Start contributing to your 401k. The sooner you start contributing to your 401k the more you’ll get to benefit from the power of tax free or deferred compounding. Many companies will have matching and if you are not contributing, you are missing out on free money.

Your 30s:
Pay down non-mortgage debt. This is the time to start paying down credit card debt and student loans so you’ll enter your forties with better positioning to start building your nest egg. Make sure you have a sufficient emergency fund balance (usually six months of expenses). Consider insurance if you have started a family as well as setting up wills and estate planning documents.

Your 40s:
This is the decade to beef up your savings and really start defining your long-term goals. Balancing retirement, college and personal or family goals. Are you on track to pay for college goals, have you revisit insurance coverage? Are your 401k contributions maxed out?

Your 50s:
You are now eligible to make larger contributions towards retirement accounts. Take advantage of the catch up provisions. If you have children, start to set priorities and expectations on how you plan to help them after college and through adulthood. Reassess how close and when you want to retire. Are the wills and estate planning documents up to date?

Your 60s:
You should have a better idea of what retirement could look like for you and what it really means for you to be “retired”. Do you want to keep working as long as you can? Would you like to slow down? What are your Social Security benefits and when is the optimal age to start taking them? At 65, make sure you visit and understand Medicare whether you intend to use it or not. Optimize your investment accounts so you are as tax efficient as possible.

Your 70s and beyond:
Grandchildren could be a big part of starting to think about legacy and family planning. Any philanthropic goals or organization that you care about? Required Minimum Distributions (RMDs) will be a factor whether you are still working or not.

Use our free tools to see if you’re on track for retirement.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Amin Dabit, CFP®
Amin Dabit is the Vice President of Advisory Services at Personal Capital. Amin brings over a dozen years of experience in private wealth management and financial planning. Amin leads Personal Capital's advisory team to identify and establish strategies for reaching clients' financial goals by providing comprehensive, customized financial advice designed to improve their financial lives.

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