No matter where you are on life’s journey, investing in your future is always a good idea. But what that looks like will change over time. Your priorities shift, your income grows, and your tolerance for risk evolves. That’s why it’s smart to regularly revisit your investment strategy and make sure it’s still working for you.
Here’s how to align your investments with the stage of life you’re in, so you can keep building toward the future you envision.
In Your 20s: Build the Foundation
In your 20s, time is your greatest financial advantage. The earlier you start, the more you benefit from compounding returns—the ability of your investments to grow on themselves over time. Even small contributions to a retirement account like a 401(k) or IRA can add up significantly in the long run.
Focus on:
- Building emergency savings
- Paying down high-interest debt
- Contributing to a Roth IRA and/or workplace retirement plan
- Getting comfortable with a growth-oriented portfolio (more stocks than bonds)
Smart Moves:
- Contribute enough to get your employer’s 401(k) match
- Consider using Roth IRAs for tax-free growth
- Focus on building good financial habits: automating savings and learning to budget
- Start thinking about what estate planning documents you may need as your life changes
Your 30s: Grow and Balance
Life gets busy in your 30s—maybe it’s a new home, a growing family, or advancing in your career. With more goals to juggle, it’s important to strike a balance between risk and stability while keeping long-term growth in focus.
Focus on:
- Increasing your retirement contributions as income rises
- Properly diversifying across asset classes (a mix of U.S. and international equities and bonds)
- Staying invested through market ups and downs
Smart Moves:
- Aim to save approximately 15% of your income for retirement (including any employer match)
- Consolidate old 401(k)s or roll into an IRA
- Begin exploring life insurance and estate planning
- Start saving for your children’s college education
In Your 40s: Catch Up and Strategize
Your 40s are often peak earning years but peak expense years, too. This is a good time to refocus on your long-term goals and make sure you’re still on the right path.
Focus on:
- Catching up on retirement savings if you’ve fallen behind
- Reducing debt
- Sharpening your vision for retirement
Smart Moves:
- Review your investment mix; depending on your goals and risk tolerance, consider adding more bonds or dividend-paying stocks
- Explore college savings, caregiving strategies, and tax-smart giving
In Your 50s: Protect and Prepare
Retirement is getting closer, and now’s the time to fine-tune your strategy. You may want to reduce risk, review income sources, and plan for potential health care expenses.
Focus on:
- Max out retirement accounts and explore catch-up contributions when eligible
- Creating a clear picture of your retirement needs
- Adjusting your portfolio to stay in line with your goals, which may include preservation and steady growth
- Minimizing taxes on future withdrawals
Smart Moves:
- Rebalance your portfolio regularly
- Consolidate accounts and simplify where possible
- Consider Roth conversions
- Evaluate your retirement income sources and determine if planning should be done to diversify them
- Start planning your Social Security strategy—timing matters
In Your 60s and Beyond: Distribute Wisely
Once you reach retirement, your focus may shift from growing your nest egg to using it smartly and strategically. Strategic withdrawals help your money last and support the legacy you want to leave.
Focus on:
- Generating income from your investments as needed
- Begin preparing for Required Minimum Distributions to potentially minimize their tax impact
- Adjusting your plan as needed over time
Smart Moves:
- Plan for and follow a sustainable withdrawal strategy
- Look into keeping some growth potential in your portfolio to outpace inflation
- Use a mix of taxable, tax-deferred, and tax-free accounts to create flexibility and manage taxes
- Regularly review beneficiaries and your estate plan
The Bottom Line
No matter your age, your investment strategy should reflect both where you are today and where you want to be tomorrow. Whether you’re just starting out or refining your retirement plan, a trusted advisor can help tailor an approach that fits your life.