Retirement savings by age: What to do with your portfolio in 2025

The amount of time you have left until you retire is a major factor when determining your retirement readiness. Investors at every age can enter 2025 more strategically by asking themselves these key questions:

Consider the following retirement action plans tailored for each generation.

It’s critical that you start saving for your long-term goals—especially retirement—as soon as possible. Younger investors can take full advantage of the power of compounding over several decades.

T. Rowe Price analysis shows that, in many cases, you should have 11 times your ending salary saved by the time you retire. Setting aside 15% of your annual income (including any workplace plan company match) can help you reach that goal, but if that’s too difficult right now, start saving what you can and work to increase that amount over time. (See “Saving enough for retirement.”) Keep in mind that many employer-sponsored plans allow you to automate contribution increases.

Big changes to your budget, such as paying off your student loans or getting married, may provide opportunities to accelerate your savings. Coming together to form a new household means realigning your goals and finances with your partner. You may now have two incomes that can contribute to your retirement savings.

Withdrawals from Roth IRA and Roth 401(k) accounts are tax-free in retirement, provided you have held the account for at least five years and are age 59½ or older. Roth contributions are made with after-tax money, making them ideal for workers who expect to be in a higher tax bracket in the future. If you are starting your career, it’s likely your earnings will increase and you’ll be in a higher tax bracket later, making Roth contributions a better strategy for many young investors today.

With several decades left until full retirement age, you should focus on stocks, as you will have enough time to benefit from the long‑term growth potential while riding out any short‑term volatility.

During this time frame, you are likely in your peak earning years. You may still be juggling competing financial goals, or you may be enjoying more financial freedom as your children move out or graduate from college. As a result, you may be able to redirect resources toward your retirement savings.

T. Rowe Price analysis suggests that 45-year-olds should have three times their current income set aside for retirement. This savings benchmark rises to five times current income at age 50 and seven times current income at age 55. Fortunately, there’s still time for even modest adjustments to have a large impact down the road. If possible, aim to contribute the maximum amount to your retirement accounts. Moreover, your retirement contribution limits increase in the form of “catch‑up” contributions once you turn age 50, allowing you to focus even more on saving what you need to reach your target. (See “Contribution limits.”)

In addition to setting money aside in your retirement accounts, consider saving in a taxable account. Setting aside money in a taxable account can provide you with flexibility for different goals and improve the tax diversification of your retirement savings. If you are already on track in your retirement accounts, maybe your next dollar should not go to a tax-deferred account.

With more than a decade or two of working years left until retirement, it’s important to maintain the growth potential of your portfolio through an appropriate allocation to stocks. In your 50s, you may want to consider adding a meaningful allocation to bonds.

If you are not yet retired, this is the time to assess your retirement readiness. As a household, review your savings and figure out a plan for taking distributions from your various accounts (including the order and amount) to meet your spending needs in retirement. Be sure to include your Social Security benefits in this plan—now is also the time to understand your options. Look up how much you could expect to receive in Social Security benefits at different ages, and determine a plan that will work for you.

If you remain unsure of your retirement readiness, consider delaying retirement by a few more years. This strategy would allow your savings to continue to grow. Consider making those large purchases or paying down debt before you retire and while you’re still earning income.

If you don’t currently have money saved in a Roth IRA, you may want to consider Roth contributions, if you qualify, or a Roth conversion during lower-income years. You can make withdrawals from Roth accounts if you need more income but want to avoid increasing your taxable income for a given year. Roth IRAs and Roth 401(k) assets aren’t subject to required minimum distributions (RMDs)—the minimum withdrawals required by the IRS from retirement accounts once you turn 73. Therefore, you can leave the money to continue growing tax-free if you don’t need it.

Retirement can last up to three decades or more, meaning your portfolio will still need to grow in order to support you. Exposure to stocks should remain an important part of your allocation target, even in retirement. However, a possible need to access these assets for income in the near term means you are more susceptible to short-term risks. That’s why it’s important to position your portfolio (across all your accounts) to add more exposure to bonds and cash.

No matter your age, you can take steps now to ensure that you are ready for retirement. The key is to make retirement savings a priority early on and then maintain that focus throughout your working years. Even after you’ve retired, remain focused on a sustainable plan that will help support you through this time of your life.