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February 26, 2021

Financial Milestones to Reach by Each Decade of Your Life

By the time you graduate from high school or college and are starting your adult life, you have probably learned some basic financial concepts—opening a bank account, paying bills, having a budget, learning how credit works, understanding how to pay taxes, balancing a checking account, etc. These are the basic financial skills you need just to survive in the real world. 

Beyond that, however, what needs to be done in order to achieve real financial freedom and retire exactly how you want to? Below are financial milestones you can aim for in each decade of your life to ensure you are setting your future self up for success. Having financial goals by age can be a great yardstick to stick to as you go.  These financial milestones can be strict or even just serve as guidelines based on your personal circumstances, but can definitely give you something concrete to aim for. 

Source: U.S. Census Bureau, Survey of Income and Program Participation, Survey Year 2018

Reach These Milestones by Age 30

You’ve graduated, you land your first job, and you are ready to take on the world. If you are like most young adults, however, you’ll also find that getting your personal finances in order is more complicated than you thought it would be. Here are some of the lessons to master and investment milestones to work towards before you reach 30.


Reach These Milestones by Age 40

The decade from thirty to forty can bring some pretty major life changes. Getting married and starting a family introduces a whole new set of financial challenges. Here are some of the lessons to master and financial milestones to work towards before age 40.


Reach These Milestones by Age 50

Now that you are in your forties, you are likely reaching your peak earning years. Use this time to make sure you are in the best position possible to meet all the financial milestones you are aiming for in life. Here are some of the lessons to master and financial milestones to work towards before you reach 50.


Reach These Milestones by Age 60

As you get closer to retirement, you should start making final preparations for this next phase in your life. Here are some of the lessons to master and retirement age milestones to work towards before you reach 60.

By retirement age (67), one should aim to have eight times their annual salary saved. If you are making $125,000, then having around $1,000,000 saved should put you on track.

Every individual and situation is different. There are so many factors such as medical costs, debt, life expectancy, and retirement lifestyle that all play into the amount needed during retirement. AARP writes that for a retiree to generate $40,000/year after stopping work, he or she will need savings of about $1.18 million to support a 30-year retirement (calculated using average returns of 6 percent and inflation at 2.5 percent).

People who start saving for retirement at age 22 may only need to allocate 10% of their annual salary to retirement. The older you are when you start saving for retirement, the greater the percentage of your salary will need to be devoted to retirement. The timeline may also depend on the age at which you plan to retire. That being said, there is no one-size-fits-all approach to financial planning, but the above are some good money milestones to hit to ensure you are on the right track!

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