Your Retirement Planning Timetable: A Decade-by-Decade Guide to Staying on Track

Planning for retirement is a lifelong journey. Think of your retirement like a train route: each decade is a stop, and each stop has key actions and opportunities that can help ensure a smoother ride into your retirement years.

This guide breaks down retirement planning by age, combining industry benchmarks with legally defined opportunities, and highlights when to act so you can build a plan that works for your life.

Why Timelines Matter in Retirement Planning

A few general guidelines can help you create benchmarks for how much you should aim to save at different ages. Assuming that you:

• Begin saving at age 25
• Save 6% of your salary, increasing 1% annually until reaching 12%
• Average an annual return of 5.5% on your investments
• Receive annual salary increases of 1.5%
• Retire at age 67 and aim to replace 85% of your final income

Your savings milestone targets should be:

• Age 35: 1x your salary
• Age 45: 3x your salary
• Age 55: 5x your salary
• Age 67: 8x your final salary

These are guidelines, not rules. If you're ahead or behind, know that working with a financial advisor can help you adjust your strategy, prioritize your next steps, and make the most of the time and resources you have.

Key Retirement Milestones by Age

Age 50: Higher Contribution Limits Begin

Beginning at age 50, you can contribute an additional $7,500 per year in catchup contributions.

• 401(k), 403(b), 457, Thrift Savings Plan (TSP): Up to $30,500 per year
• IRA: Up to $7,500 per year
  These are known as "catch-up contributions" and can significantly increase your retirement savings during your peak earning years.

Age 55: Access to 401(k) Without Penalty (In Some Cases)

• If you retire, quit, or are laid off at 55 or older, you can withdraw from your 401(k) without the 10% penalty.
• IRA withdrawals still face penalties unless exceptions apply (e.g., Roth IRA contributions can be withdrawn anytime, but earnings may be penalized).

Age 59½: Penalty-Free Access

• You can begin taking withdrawals from both 401(k) and IRA accounts without the 10% early withdrawal penalty.
• Regular income tax still applies, and large withdrawals may push you into a higher tax bracket.

Age 60: Super catch-up contributions

An even higher catch-up contribution limit applies for employees aged 60 to 63 who participate in 401(k), 403(b), governmental 457 plans, and TSPs under a change made in SECURE 2.0. For 2025, this higher catch-up contribution limit is $11,250 instead of $7,500.

• 401(k), 403(b), 457, and TSP: Up to $34,750 per year 

Age 62: Early Social Security Eligibility

• You can claim Social Security, but your monthly benefit may be reduced by up to 30%.
• If you continue to work, some benefits may be withheld until you reach full retirement age.

Age 65: Medicare Eligibility Begins

• Your enrollment period for Medicare lasts 7 months. You can start enrolling 3 months before you turn 65, and the enrollment period ends 3 months after the month you turn 65.
• Medicare is a key part of retirement planning; missing enrollment deadlines can lead to penalties.

Age 66-67: Full Retirement Age (Depending on Birth Year)

• Born 1943-1954: Full retirement age is 66
• Born 1955-1959: Add 2 months for each year after 1954
• Born 1960 or later: Full retirement age is 67

Claiming before this reduces your monthly benefit; delaying increases it.

Age 70: Maximum Social Security Benefit

• Delaying Social Security past full retirement age increases your benefit by 8% per year until age 70 (for those born after 1943).
• No additional increase after 70, so this is the latest you should delay claiming.

Age 73: Required Minimum Distributions (RMDs)

• For traditional IRAs and 401(k)s, RMDs now begin at age 73 (as of SECURE 2.0 Act updates).
• You must withdraw a calculated amount annually or face a 25% penalty on the shortfall.
• These withdrawals are taxable, but once withdrawn, the funds can be reinvested outside of retirement accounts.

How Your Advisor Helps You Stay on Track

Every retirement journey is unique. A qualified financial advisor does more than manage investments—they guide you through decisions about retirement age, income strategy, tax optimization, and more.

At Wealth Enhancement, our advisors practice Plan-Led Investing™, which combines your personal goals with data-driven investment planning, all backed by a national network of specialists. From the moment you begin saving to your first RMD, we help craft a plan built to handle what life brings.

Let's Craft Your Future, Together

Whether you're 30 years from retirement or already thinking about claiming Social Security, now is the right time to plan. Partnering with a financial advisor can help you navigate your unique journey with clarity and confidence.

Wealth is in the details. Let’s build a plan that reflects yours.

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