Retirement Planning at Every Age: A Summit Bank Perspective

Retirement planning advice has a tendency to be either obvious ("save more") or overwhelming (401(k) contribution limits, Roth conversion ladders, RMD rules). This is our attempt at something more useful: a plain-language framework for each life stage, focused on the two or three decisions that matter most at each point.

In your 20s: start before you feel ready

The most valuable thing a 25-year-old can do for their retirement is almost anything. The compounding math is genuinely spectacular at this stage, and the biggest mistake isn't picking the wrong fund or missing a contribution limit — it's waiting.

The two moves that matter: (1) Contribute at least enough to get your full employer match if you have a 401(k). That's an immediate 50-100% return on those dollars. (2) Open a Roth IRA if you qualify (income under $146,000 single / $230,000 joint in 2025). You're in a low tax bracket now; Roth contributions grow tax-free and you'll be grateful in your 60s.

In your 30s: optimize, don't just contribute

Your income is higher, your expenses are likely up too (mortgage, kids, childcare), and you're starting to see meaningful balances in your retirement accounts. The temptation is to coast on autopilot. Don't.

Three moves for your 30s: (1) Increase your contribution rate by 1% every time you get a raise — automate this. (2) Revisit your investment allocation. Most people default into a target-date fund, which is fine, but check the underlying asset allocation. At 35, you can typically hold 80-90% equities. (3) If you have children, balance a 529 college savings plan against your retirement funding. The rule of thumb: retirement comes before college savings. You can't borrow for retirement.

In your 40s: pressure-test your trajectory

By your mid-40s, you have enough history to do a real retirement income projection. A financial advisor can run this for you; our wealth management team does it free for Summit Bank members. You're looking for one question: am I on track to replace 70-80% of my pre-retirement income?

If the answer is no, your 40s are the best time to correct it. Key moves: (1) Max your 401(k) contributions ($23,500 in 2025). (2) If you've been carrying high-interest debt, pay it down aggressively — a 7% interest rate you're paying is a guaranteed 7% return. (3) Review beneficiary designations on all accounts. Life changes (divorce, remarriage, children) make these wrong more often than people realize.

In your 50s: catch-up contributions and healthcare planning

At 50, you become eligible for retirement account catch-up contributions. The IRS lets you contribute an extra $7,500 to a 401(k) and an extra $1,000 to an IRA per year. If you can afford it, maximize these — the tax advantage is significant and the window closes at retirement.

The sleeper issue in this decade: healthcare. Medicare doesn't begin until 65, and if you retire at 60 or 62, you'll need to fund 3-5 years of private health insurance. This is consistently the cost that surprises early retirees most. Build it explicitly into your retirement income model.

At retirement: distribution strategy and Social Security timing

The accumulation phase is over; now the challenge is drawing down your accounts efficiently. The sequence of withdrawals matters for taxes: generally, spend taxable accounts first, then tax-deferred (401k, traditional IRA), and preserve Roth accounts as long as possible.

Social Security timing is one of the highest-leverage decisions of retirement. For each year you delay claiming past age 62, your benefit grows roughly 6-8%. If you're healthy and can afford to wait, delaying to 70 versus claiming at 62 can mean 77% more per month for the rest of your life. The break-even point is roughly age 80 — if you expect to live past 80, delay.

Talk to Summit's wealth management team

Summit Bank Wealth Management advisors are fiduciaries: we're required to act in your best interest, not our own. Complimentary retirement projections and plan reviews are available at any of our 42 branches across New England, Monday through Saturday. Book an appointment at summitbank.com/wealth.