Retirement Planning for Every Decade

Life Events

No matter what your age, it’s never too early to start building the nest egg you need for a comfortable post-work lifestyle. Whether you’re in your 20s or your 50s, there’s no better time than now to make retirement planning a priority.

In your 20s

We know retirement isn’t even a speck on your financial horizon yet, and that’s okay! The money you set aside now has the best potential to grow over the next few decades. Sock away just a little bit from every paycheck to ensure that you’re financially ready to buy a car, a house, or travel in the future. Learning to budget and sticking to it now will help set you up for financial success for the rest of your life.

In your 30s

If you don’t already have it, life insurance will never be less expensive than it is right now. Permanent life insurance policies can build up cash value that you may tap into later if you leave the workforce. The right life insurance policy may potentially grow on a yearly basis without subjecting your funds to the same market fluctuations found in other retirement savings vehicles. Also, unlike 401(k)s, IRAs and other retirement plans, you can generally access the cash value of a whole life policy at any time.

Risk can be your friend. Volatile stocks and higher-risk mutual funds may have a higher rate of return in the long run than more stable investments. It may be worth your while to explore your investment options and diversify your portfolio, depending on your circumstances and risk tolerance.

In your 40s

  • Make an appointment with a financial planner to help map out the next 25 years.
  • Look into maximizing your employer’s 401K match, and explore tax-deferred IRA options.
  • Speaking of your employer, now is the time to understand your employer’s defined benefit pension plan. Jumping from job to job may mean you lose some important benefits in the long run.

In your 50s

  • If you happen to get a lump sum windfall from a life insurance payout, estate settlement or other source, consider putting it into an annuity.
  • Annuities are contracts in which an insurance company pays you a specified amount in return for contributions paid in. These payments can last for a specific timeframe or even for a lifetime. This creates a source of regular earnings retirees can depend on, helping you avoid outliving your assets.
  • While your other investments are percolating, consider safe places for some of your liquidity, such as treasury securities, certificates of deposits and money market accounts. As these funds mature, you can pour them into the annuity, too.

In your 60s

  • Retirement and Social Security: Retirement ages are moving further and further out on the timeline. Every year you can put off taking money out of your retirement plan, it has a chance to grow. The same is true of Social Security. You will maximize your Social Security payout if you work until you are eligible to receive 100% of the benefits. If you were born after 1959, full benefits start at age 67. You can delay receiving Social Security benefits until age 70 -- the longer you pay into the system, the larger the monthly payment you will get out of it.
  • Home Equity: If your house is more than you need, you may consider downsizing to a smaller, low-maintenance home, or moving to an area with a lower cost of living. The equity you get from your home may provide a boost to an annuity that could start paying out immediately.
  • Permanent Life insurance: If you need some extra income now, the permanent life insurance policy you purchased twenty years ago may be a potential source. Withdrawals from your cash value are generally considered a return of premiums paid, so the money you take out is not taxed. Policy loans that you don’t pay back may lower the death benefit.

6 Tips for a Rewarding Retirement

Keith J. Weber, certified financial planner and author of Rethinking Retirement: How to Create the Life You Want Without Waiting to Retire, says, "A large proportion of baby boomers will not be able to afford to retire the way they'd like to. Many will have no choice but to continue working. It's very different than the dream."

But Weber says the key to a happy retirement is to, "have a purpose or find something you love to do, and do it for as long as you possibly can, whether you need the income or not."

Weber has identified activities people should pursue within six "life arenas" to have a rewarding retirement:

  1. Engage in a fulfilling purpose.
  2. Practice financial maturity
  3. Continue personal growth and development, including spirituality.
  4. Connect with family and friends.
  5. Maintain health and wellness.
  6. Develop leisure and lifestyle interests.


Retirement planning
doesn’t have to be daunting task. Whether you’re starting a new job or winding down your career, it’s smart to have a strategy in place for your golden years. The key is to set your plan in motion early so you can live your life on your terms later.

This material is for general informational purposes only and is not legal or tax advice. The material may not reflect your particular circumstances. Neither Farmers Insurance nor any of its agents, employees, or registered representatives is authorized to provide tax or legal advice. Please consult your tax or legal advisors for advice specific to your situation. Carefully read the contract prior to purchasing any life insurance or annuities. This material presents our general understanding of current law, as tax laws and IRS administrative positions may change. This material is not intended to, and cannot be used to avoid any Internal Revenue Service penalties.

Life insurance, annuities and accidental death insurance issued by Farmers New World Life Insurance Company, 3003 77th Ave. SE, Mercer Island, WA 98040.

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