Financial planning is a lifelong endeavor, but people often seek out investment advice that doesn’t fit their current lifestyle. When it comes to saving for your retirement, most Americans invest and manage those retirement savings for six decades or longer. That’s why we put together these insider retirement savings tips to make your retirement planning effective, easier and more enjoyable.

Our expert financial planning team at Hudson Companies, helps you you want to consider how your resources and risk tolerance change over time as you move through different stages in your life


Here is some age-appropriate retirement advice that we recommend:


#1 Ideal Asset Allocation by Age

In the past, investment advisors advocated the “100 Rule,” which called for subtracting your age from 100 to determine how much of your assets should be invested in stocks. For example, this financial rule called for 25-year olds to hold 75% of assets in stocks or “riskier” investments and 25% in bonds, CDs, equities or other low-risk investments. This has changed now. It’s the “110 or 120 Rule”. Americans are living much longer, making it extremely important to generate enough money to last throughout their whole retirement.

  • While this financial rule is useful for a basic guidance, it’s important to look at your particular financial and retirement situation.
  • Develop a more nuanced investment mix that is more closely aligned with your retirement savings goals and risk comfort level.


#2 In Your 20s: Balance Saving and Investing


Your earning ability is at its lowest in your 20s. But the power of compound interest makes this decade the best time to invest. Many financial advisors recommend that people in their 20s invest a majority of their retirement savings in stocks rather than bonds or savings accounts. A 2016 investment analysis by NerdWallet found that a 25-year old with a $40,456 salary who invested 15% a year exclusively in the stock market would likely end up with as much as $3.3 million more than if he or she kept their money in savings accounts.

  • You should strive to balance your retirement savings approach with paying off outstanding debt first (student loans, credit cards), then saving for an emergency fund.


In Your 30s: Invest Aggressively in Stocks

It’s a good idea to fully take advantage of your employer’s contribution by investing 10 to 15% of your salary in your office retirement plan in your 30s. Investing with the thought of your retirement in a home or rental property is a good idea, provided you will be able to keep the real estate for at least five years. When you compare long-term investment returns on stocks and bonds, stocks vastly outperform cash and bond investments over time.​

  • You have decades to potentially make up any temporary losses in the stock market, so invest as aggressively in equities as your risk comfort level allows.  ​


In Your 40s: Maximize Your Retirement Contributions

When you are in your 40s, you want to be saving as much as possible for your retirement. Now is the time to max out your retirement contributions by investing the full $18,000 allowed each year. Investing in a tax-advantaged Roth IRA in addition to your 401(k) or 403(b) will help you boost your retirement savings.

  • It’s the right time to start investing in some lower-risk bonds too, unless you have been neglecting your retirement savings plan.
  • An experienced financial advisor can help determine the ideal investment mix to achieve your retirement savings goals while maintaining an acceptable risk level.


In Your 50s and 60s: Start Preparing for Retirement

​If you have the need to build emergency funds to meet your unexpected medical expenses and other costs in your retirement, mature investors are allowed to start making catch-up contributions to tax-free savings accounts in the year they turn 50. In 2018, as a matured investor, you can save up to $24,500 in a 401(k) and up to $6,500 in an IRA each year.  When you are in your last decades of saving for your retirement, it is time to start rebalancing your financial portfolio.

  • Consider moving your financial funds into bonds and money markets.
  • A financial advisor can help you plan your retirement and compile a comprehensive financial profile, assessing all your funding sources to figure out your ideal investment mix to provide income throughout your retirement.

We suggest using the above financial recommendations as starting points to saving for your retirement throughout the different stages of your life.


However, regardless of age, everyone can benefit from a personalized retirement plan.  As an experienced team of financial experts, we help determine and customize an ideal asset allocation for your individual retirement savings plan. Please contact us today for a complimentary consultation.