Financial Milestones for Every Age and Stage of Life

Financial Plans to Make in your 20s

Your 20s are a decade of immense change and opportunity, laying the foundation for your future financial success. Here are the milestones you should aim to achieve in your 20s:

• Begin setting aside savings for emergencies and retirement
• Begin paying off student loan debt (if applicable)
• Begin establishing good credit habits
• Start saving for a home down payment
• Get health and life insurance
• Invest in yourself by learning personal finance

Begin building your savings

Retirement may be the last thing on your mind at this stage in life, especially when many things feel like they are just getting started, but having an eye on retirement will ensure you have enough money to last when you get there.

A good, practical way to start is by setting up and regularly contributing to an emergency fund. This will help you get in the habit of saving and give you funds to fall back on, should you need them. Most experts estimate that you should save enough to cover three to six months’ worth of expenses, such as rent/mortgage, utilities, car/student loan payments, etc. An emergency fund calculator can help you determine the total amount you should save.

Additionally, it’s never too early to start wading into the waters of investing. After all, the sooner you start, the more you can earn in the long run. Taking the time to learn and understand personal finance and how to invest now will ensure that your savings are there when you need them later down the road. 

Begin building credit

As an independent young adult, chances are your credit history is just starting or hasn’t started at all. However, establishing and maintaining a positive credit history is needed for everything from getting a cellphone to qualifying for a car loan. Your credit score determines the interest rates you pay on loans and are a key factor in the loan application process.

Building a credit history takes time, but you can get started building credit by:

• Paying bills on time
• Using credit cards wisely
• Diversifying your credit portfolio
• Regularly checking your credit report

Financial Plans to Make in your 30s

As your 30s unfold, your financial priorities shift from building a foundation to growing your wealth and securing your future. As you roll through your 30s, here are a few financially worthy milestones you’ll want to complete:

• Have a year’s worth of your annual salary saved toward retirement
• Financial independence from parents (including independent living arrangements and no assistance with insurance or phone bills)
• Student loans completely or close to being paid off
• Good credit history established with a score in the mid-700s or higher
• Education credentials achieved or near completion (graduate/professional degrees, certifications)
• Begin setting up an estate plan and life insurance

Sharpen your focus on retirement

At this stage in life, chances are you’re a bit more established in a job and career, and potentially earning more than you were in the previous decade. Now is a great time to focus your attention on the savings you started in your 20s by giving them a bit more direction. If you have a 401(k), maximize your contributions and take advantage of any employer match. If you don’t have access to an employer-provided 401(k), consider setting up and regularly contributing to an IRA.

Additionally, as you continue to grow in your career, you may be interested in investing in something outside of your retirement accounts, such as mutual funds, stocks, real estate or exchange-traded funds. Creating a diversified portfolio that matches your age, risk appetite and budget is a great way to help reach your financial goals sooner.

Become a homeowner

Buying your first home is certainly one of the most significant milestones in life. When deciding to buy a house, there are several money saving tips homeowners should consider. However, the first step is simply to assess your finances by checking your credit score, calculating your debt-to-income ratio and determining exactly how much you can afford to spend. Having saved for a down payment can also significantly reduce the barriers to homeownership.

Financial Plans to Make in your 40s

Your 40s mark a pivotal decade where you’re balancing family, career and retirement planning to help ensure a comfortable future. To reach your goal of a secure retirement try to reach these milestones in your 40s:

• Have 3 times your annual salary saved toward retirement
• Increase investing and portfolio diversification assets
• Establish college savings for children (if applicable)
• Update estate plan documents (as needed)
• Seek the assistance of financial advisers as net worth and investments portfolios become more complex (as needed)
• Invest in yourself to remain employable or earn promotions/raises (education, job skills, certifications)

Wealth building

By this point in your journey, it’s safe to assume you’ve managed to check off quite a few of life’s financial milestones. Chances are you might also find yourself in a career with your income, earnings and expenses all in a more stable and manageable state. This makes your 40s an ideal time to put more attention toward building wealth.

As you begin exploring additional ways to invest or diversify your portfolio, now might be the time to hire a financial professional or learn more about wealth-building tools. A financial adviser can review your plan and confirm you are on the right path toward financial freedom in retirement. 

Get your estate plan in order

Estate planning may be one of the gloomier parts of financial planning, but it is also one of the more critical efforts you can make to help protect your loved ones. There are many different components that go into estate planning, including creating documents that cover power of attorney, beneficiary designations, advanced healthcare directives and revocable trusts.

A good place to start is to create a last will and testament. Doing so helps circumvent confusion and ensures you can secure the financial future of your family members. You can also create trusts or organize other important measures to help your loved ones avoid probate.

Financial Plans to Make in your 50s

Your 50s are a time to refine your financial strategy, focusing on maximizing retirement savings and minimizing debt. While in your 50s, these are the milestones you should expect to complete as you near retirement:

• Have 6 times your annual salary saved toward retirement
• Begin making “catch-up” retirement savings plan contributions (when available)
• Become familiarized with aging parents’ finances and caregiver/health-related issues
• Start paying down debt

Maximize your retirement contributions

Retirement accounts, like the 401(k) and the IRA, offer catch-up contributions every year for individuals over 50 years of age. As the name suggests, these catch-up contributions are in place to help you considerably increase your retirement savings in the remaining years leading up to retirement.

For 2024, the catch-up contribution for a Roth IRA is an extra $1,000 on top of the $7,000 limit for those under 50. For a 401(k) you can contribute an extra $7,500 on top of the $23,000 limit for everyone else, for a total max contribution limit of $30,500. However, starting in 2026, those over 50 will be divided into two groups based on annual income.

Those making less than $145,000 can continue making catch-up contributions to their regular pretax 401(k) plans, while those making $145,000 or more will have to put their catch-up contributions into a Roth 401(k), meaning those contributions will be on an after-tax basis.

Clear your debt

While your retirement age may vary depending on the year you were born, one thing is for certain: It’s never a great strategy to head into retirement with debt. Not only can your source of income diminish significantly, but high interest rates will inevitably eat into your hard-earned savings. So, prioritize settling all your loans and debts as quickly as possible, including credit card bills.

According to a Survey of Consumer Finances, the median debt among Americans ages 45 and older in 2022 ranged from $140,000 for those 45–54 to $36,000 for those 70 and up. The good news is, there are plenty of helpful steps that can be taken over the next several years to get out of debt and secure your future finances.

Financial Plans to Make in your 60s and Beyond

As you enter your golden years, it’s time to reap the rewards of your lifetime of hard work and wise financial decisions. While in your 60s there are still a handful of financial milestones that you can strive for:

• Have 8 times your annual salary saved for retirement
• Have home mortgage, home equity loans and lines of credit, and credit card debt paid off (ideally prior to retirement)
• Downsize (if necessary)
• Continue making catch-up retirement savings plan contributions (as needed)
• Invest in yourself by learning new skills/prepare to transition into a post-retirement job or volunteer role
• Begin learning about Social Security, Medicare, and employer retirement benefits (if applicable)

Explore retirement income sources

Money management experts expect retirees to spend about 70% to 80% of their preretirement income during their golden years. With so much cash being spent, many people are finding the need to generate a little post-retirement income to supplement their savings.

Whether landing a part-time job, opening a side-hustle business or simply rearranging your investment strategy to generate more post-retirement cash, figuring out a way to earn a few extra bucks in your golden years can help relieve some of the financial pressures associated with living on a fixed income.

Manage your required minimum distributions

If you’ve nurtured the habit of saving and investing over the course of your life, there’s no reason to assume those habits will stop in retirement. However, despite your best intentions to safeguard the growth of your investments, after you pass 72 years of age, the IRS requires you to take distributions (RMDs) from your traditional IRA each year. It’s important to work with a professional to understand the tax implications of these withdrawals.

Zions Bank is here for you — at every stage of life

Our branch teams are ready to answer any questions or support you in any way you need by phone, online or in person. To speak with a Zions Bank Wealth advisor, please visit our website to schedule an appointment.