Everyone’s life journeys are different, which means everyone’s financial milestones by age look different. Your goals likely vary from even close friends and family – and that’s okay!
Still, drawing a roadmap for your own success gives you something to aspire to. Setting financial goals by age – even if you don’t always meet them – keeps you on track and provides motivation when you get lost.
Below, we’ve compiled a few financial goals by age to help you get started.
Financial Milestones by Age 20
Before you turn 20, you’re somewhat limited in what you can do to accomplish your goals. But that doesn’t mean you can’t get a head start!
Some basic financial goals by age 20 include:
- Get your first job and start saving up. Experts recommend saving between 10-20% of your pre-tax income for the future.
- Open your first bank account with your parents at 16, or on your own when you’re 18.
- Start contributing to an employer-based retirement plan like a 401(k) or opening an Individual Retirement Account (IRA).
- Build your first budget (and prepare to alter it throughout your life as your goals and finances change). Start saving for a computer, car, or your first apartment.
- Learn more about personal finances. Find a few good resources like blogs or books to explore the world of finance and investing.
- Do your taxes at least once. When you’re young and making small amounts of money is a great time to learn about taxes. That way, messing up means you won’t owe the IRS your house. You can fill out paper forms or use a financial program like TurboTax to start.
- Open a low-limit credit card at 18 and make a few small purchases every month. Be sure to pay it off before the statement comes due to avoid interest charges!
Financial Goals: Ages 20-30
Your 20s are an exciting time full of change and finding yourself. Maybe you go to college or trade school, join the family business, or travel the world. But in the process, don’t neglect your essential financial goals.
- Start paying off any student debts you’ve accumulated.
- Open your first retirement account (if you haven’t already) to take advantage of time and compound interest. Maximize your contributions as high as your income or account limits allow. Aim for saving 1x your annual income by age 30.
- Bulk up your emergency savings until you have 3-6 months’ worth of household expenses set aside, just in case.
- Get a head start on saving for your next car or home down payment. Open a separate brokerage account or high-yield savings account to maximize your compound interest.
- Sign up for life and health insurance while your premiums remain low.
- Establish your credit history with a higher-limit credit card, auto loan, or your student loans. Aim for a score around 740+ to get the best interest rates.
- Invest in yourself. Learn new skills, explore career paths, and round out your professional portfolio.
- Consider hiring a financial advisor to learn more about financial goals by age. Seek personalized advice regarding budgeting, investments, taxes, and more.
Financial Milestones: Ages 30-40
Many people bloom professionally, personally, and financially in their 30s. You may get married, have children, take a promotion, or even change careers.
Life gets more expensive, too, with new car and mortgage payments that make following financial goals by age more important.
- Gain financial independence. Not everyone adheres to the “traditional” structure of moving out for college 18. But by your 30s, you’ll likely have moved out and stopped accepting parental aid on insurance premiums and cell phone bills.
- Update your goals. Save for your childrens’ higher education, move from renting to buying, or double down on paying off your existing mortgage.
- Finish paying off your student loans as soon as possible.
- Focus on your retirement savings. Maximize your contributions to take advantage of your higher income. Consider how your asset allocation, risk level, and diversification align with your financial goals.
- Save 3-4 times your annual income by your 40th birthday.
Financial Goals: Ages 40-50
Many people’s lives become more stable in their 40s. You may be on your way to owning your own home, raising teenagers, or adding new additions to the family. With steady career growth, you can meet many of these financial milestones by age 50.
- Hire a financial advisor. If you haven’t taken this crucial step, now’s the time! A financial advisor will keep you on track to meet your goals and help you change course if you stray.
- Pay off your debts. Now that you’re (hopefully) more financially stable, clear any new or lingering debts dragging you down. You may have time left on your mortgage, but focusing on your credit card debts can save you big long-term!
- Invest in real estate, if possible. Owning a rental property can provide a steady income stream and help secure your retirement. Ideally, you can charge slightly higher than your mortgage payment.
- Create an estate plan. Estate plans protect your spouse, children, and other loved ones by establishing your will, life insurance, retirement and savings accounts, and guardianship plan.
- Help your parents prepare. As your parents age into their 60s and older, it’s time to ensure their financial and medical affairs are in order. Otherwise, you may be on the hook for them down the road.
- Save 5-6 times your annual income by your 50th birthday.
Financial Milestones: Ages 50-60
Many people retire or semi-retire around 65. Over the next decade, it’s time to double down on achieving any last-minute financial milestones by age 60.
- Make catch-up contributions to your retirement accounts. Many allow you to save an additional $1,000 per year after 50 to increase your retirement earnings.
- Clear out your debts. It’s never a good idea to step into retirement with debt – even your mortgage. Prioritize paying off your credit cards first, then dive into mortgage payments.
- Start researching retirement specifics, like withdrawal limitations, Social Security payments, and Medicare benefits.
- Catch up on your retirement strategies. Your 50s are the right time to strategize for long-term financial plans. Maybe you sell your house, move to a better climate, or start transitioning from risky stocks into fixed-income assets.
- Aim to save 8 times your annual salary by the time you hit 60.
Financial Goals: Ages 60-70
As you near 65, you’re likely ramping up for retirement. Perhaps that means moving into a part-time position, volunteering, or traveling the world. No matter your goal, your financial milestones should have prepared you for this day.
- Decide when to start collecting Social Security. If you take Social Security at the minimum age, you may be able to retire earlier. However, waiting until you’re 70 greatly increases the size of your monthly payments.
- Consider part-time work. Whether you work a “fun” job or take consulting gigs, working part-time keeps you busy and increases your monthly income.
- Move your investments into income-producing assets. Whether you prefer bonds, real estate, or other asset classes, choose investments that carry low risks. As tempting as high-return stocks are, it takes just one market crash for your retirement plan to go out the window.
- Budget for long-term care. There may come a time where living alone is no longer feasible. Ideally, you should budget at least $250,000 for quality retirement community or end-of-life care, should the need arise.
- Enjoy your retirement funds. Budgeting and investing don’t have to be all frugality and boringness. Take the vacation of your lifetime. Enjoy a year off with the grandkids. Volunteer at an animal shelter and bring home a fluffy pet to liven up your living room. In other words, have fun – you’ve earned it!
Financial Milestones: Ages 70-80
You’re probably no longer working full-time by your 70s, though a part-time job can provide stimulation and an excuse to leave the house. But don’t forget to slow down and breathe. You’ve have a long, successful life – if you don’t enjoy it now, when will you?
If finances are tight, consider cutting back on your spending or downsizing your house. You may also consider a retirement or nursing home as the best option.
For individuals with children, go over your estate plans, including your will. Consult your lawyer to ensure all inheritance plans are in place and airtight.
Financial Goals by Age 80 and Beyond
You did it. You made it through life’s big financial milestones one decade at a time. Enjoy the rest of your days however you’d like.
Maybe you give to charity, hand out your heirlooms, or find a quiet retirement community. Maybe you spend your money on high-quality medical care or housing so you can read, watch TV, and play with your fluffy friend.
Above all, use your money for all it’s worth – and make it work for you.
Buy those good hearing aids.
Outfit your house to keep you active, healthy, and safe.
Eat foods that bring you joy.
What are they going to do – shorten your lifespan when you’re older?
These Financial Milestones By Age Aren’t Everything
The financial milestones we’ve outlined here may not suit everyone’s lifestyle. Sure, they provide a solid foundation and a few good general recommendations to start with. But if your own life journey takes a sudden turn, don’t give up! Sometimes, life – and finance – is about rolling with the punches.