Peak earning years

Most people in their 30s, 40s, and 50s are pursuing multiple goals at the same time, like paying down debt while saving for retirement and a child's education. It's a balancing act that requires careful planning.

Balance multiple goals

These are the years most people are tackling multiple goals, By prioritizing and planning, it's possible to strike a balance.
Balancing
goals

How do you balance it all?

It may not always seem like there's enough money coming in to cover your current expenses and save for future needs. So, how do you juggle competing demands?
This framework can help you identify and prioritize your goals within each category so you can create a realistic plan for pursuing them.
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Plan for retirement

  1. Make 401(k) contributions to meet your employer match
  2. Maximize 401(k) contributions
  3. Contribute to an IRA
  4. Few or no fees
  5. Make catch-up contributions
  6. Consider a Health Savings Account (HSA)

Make every dollar count

Track your spending and look for savings opportunities with the Bank of America Spending & Budgeting tool.

Maximize your retirement savings

Use time to your advantage. Increase your savings as your income grows and take full advantage of tax-friendly retirement accounts.
Retirement
savingsSlide 1 of 3
Maximizing
contributionsSlide 2 of 3
Beyond your
401(k)Slide 3 of 3

How much should you be saving for retirement?

What each person needs to save for retirement will vary based on a number of factors:
  • Your current age
  • The age at which you plan to retire
  • How long you expect to live (based on family history)
  • How much you plan to spend in retirement
  • Your sources of retirement income
It's important to remember that the amount you save and invest is only one component of your future retirement income. Most Americans will have Social Security as the backbone of their retirement savings. So, how do you know if you are on track?
This chart shows how much you should have saved if you want to replace 39% of your pre-tax income, which is the typical average percentage of overall retirement income sources that come from retirement savings. Multiplying your yearly income by the number in the appropriate age bracket provides a target amount to have saved by that age.
This exhibit measures from smallest to largest the recommended retirement savings by age: 18-25 at 2; 26-30 at 0.9; 31-35 at 1.6; 36-40 at 2.4; 41-45 at 3.4; 46-50 at 4.6; 51-55 at 6.0; 56-60 at 7.6 and 61-64 at 9.2. This exhibit measures from smallest to largest the recommended retirement savings by age: 18-25 at 2; 26-30 at 0.9; 31-35 at 1.6; 36-40 at 2.4; 41-45 at 3.4; 46-50 at 4.6; 51-55 at 6.0; 56-60 at 7.6 and 61-64 at 9.2.
Source: Chief Investment Office and Bank of America Retirement & Personal Wealth Solutions, "Financial Wellness: Helping improve the financial lives of your employees," 2023. Note: Calculations are based on obtaining 39% of income replacement from retirement savings (pre-tax) for middle-income households of $40,000 to $100,000 annually.

Are you on track?

See where you stand in your retirement savings with our Personal Retirement Calculator.

Increasing your contributions can add up over time

If your employer offers a retirement plan, i.e. 401(k) or 403(b), make participating in that a top priority and take full advantage of any employer match. Contribute as much as you can, up to the limit set by the IRS popup.
Even a seemingly small percentage change in your contributions could potentially make a big difference. This chart demonstrates the difference between contributing 6% and 10% of a hypothetical annual salary of $75,000 over a 30 year time period.
Bar chart illustrating how much a 6% and 10% contribution of a $75,000 annual salary over 30 years could contribute to a retirement nest egg. 6% of a $75,000 annual salary could amount to $367,221 in 30 years. 10% of a $75,000 annual salary could amount to $612,035 in 30 years. Amounts based on a hypothetical 6% annual rate of return. Bar chart illustrating how much a 6% and 10% contribution of a $75,000 annual salary over 30 years could contribute to a retirement nest egg. 6% of a $75,000 annual salary could amount to $367,221 in 30 years. 10% of a $75,000 annual salary could amount to $612,035 in 30 years. Amounts based on a hypothetical 6% annual rate of return.
Source: AARP 401(k) Savings and Planning Calculator
Dollar figures are rounded to the nearest hundred. This hypothetical illustration assumes an annual salary of $75,000, pre-tax contribution rates of 6% and 10% with contributions made at the beginning of the month and a 6% annual effective rate of return. Hypothetical results are for illustrative purposes only and are not meant to reflect an actual investment, nor does it account for the effects of taxes, or investment expenses or withdrawals. Returns are not guaranteed and results will vary. Investment returns cannot be predicted and will fluctuate. Investor results may be more or less. It is not intended to serve as investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Withdrawals prior to age 59½ also may be subject to a 10% additional federal tax, unless an exception applies.

Changing jobs?

Don't forget your retirement savings, as you have choices for what to do with your account balance.Footnote 1 Learn more  about changing jobs

Giving your retirement savings a boost

In addition to any workplace retirement accounts you may have (401(k) or 403(b)), saving in a tax-advantaged retirement account, like a traditional or Roth IRA is a good way to help build your nest egg. Knowing which type of retirement account to use can be overwhelming.
Explore more insights or use our Retirement Account Selector tool.
Learn more  about types of retirement accounts Try it out : the Retirement Account Selector Tool
Image of the Merrill IRA selector tool Image of the Merrill IRA selector tool

Did you know?

If you're married and not working but file a joint return, you may be able to contribute to an IRA even if you did not have taxable compensation — as long as your spouse did, and they earned enough to cover the contribution.
Previous slide of 3 Slide 1 of 3: Retirement savings Slide 2 of 3: Maximizing contributions Slide 3 of 3: Beyond your 401(k) Next slide of 3

Monitor your investments

Once you've invested, it's important that you monitor your portfolio and rebalance it as needed to align with your financial goals.
Asset
allocation

Don't set it and forget it

Because financial markets are dynamic and unpredictable, you can't expect your portfolio to perform exactly as planned. It takes close monitoring and periodic adjustments to help stay on track: The more you do so, the better you'll get at keeping your portfolio aligned with your goals.
This example shows how a portfolio's assets allocationFootnote 2 changed from moderate to more aggressive, over many years because the stocks outperformed the other investment types. It can even happen over a period as short as six months, which is why it's important to review on a regular basis.
The chart is titled 'How your asset allocation could change over time.' There are two of pie charts with allocations and horizontal scales with low risk on the left and high risk on the right. The first is dated December 31, 2008, and the allocation is 35% bonds, 5% cash/money markets and 60% stocks, and the risk level is in the middle. The second is dated December 5, 2023, and the allocation is 8% bonds, 1% cash/money markets and 91% stocks, and the risk level is medium high. The chart is titled 'How your asset allocation could change over time.' There are two of pie charts with allocations and horizontal scales with low risk on the left and high risk on the right. The first is dated December 31, 2008, and the allocation is 35% bonds, 5% cash/money markets and 60% stocks, and the risk level is in the middle. The second is dated December 1, 2023, and the allocation is 8% bonds, 1% cash/money markets and 91% stocks, and the risk level is medium high.
Chief Investment Office.Footnote 3 Dec 2023. Strategic Asset Allocations account for impact of taxes on investment income and realized capital gains. Illustrations above are for clients with low tax sensitivity.

Did you know?

If you'd rather have Merrill investment professionals choose your investments and manage your portfolio for you, you might want to look into Merrill Guided Investing, an investment advisory program.Footnote 4

Protect your wealth and wishes

Injuries, illness and forces beyond your control can trigger significant expenses. Having an estate plan is important to your overall financial health.
BeneficiariesSlide 1 of 3
HealthcareSlide 2 of 3
InsuranceSlide 3 of 3

Designating beneficiaries is a key first step

While it's not always easy to think about what happens to your money when you die, something will happen. But — here's the good news — you can take one easy step that can make a big difference in protecting your loved ones: designating beneficiaries for your banking and investment accounts.
Once you've designated beneficiaries for your accounts, consider taking your protection of your assets and family a step further. Click through the steps to learn more (you should consult with an attorney or tax advisor).
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Provide for dependents

Make sure you have at least a basic will that includes provisions for your dependents, such as naming guardians for minors, providing for children from a previous marriage, and specifically addressing the care and income of relatives with special needs.

Did you know?

There's no limit to the number of beneficiaries you can designate on an account. Learn more

Be ready to pay for healthcareFootnote 5 costs now and in the future with a Health Savings Account (HSA)

If you are enrolled in an HSA qualified high-deductible health plan, you can save money in a tax advantaged HSA to pay for qualified out-of-pocket health care expenses. The annual limit is defined by the IRS each year. Both employees and employers can contribute to an HSA and unused dollars rollover and are portable should you change jobs or retire.
Learn more about an HSA account as well as the different types of retirement accounts Merrill offers by clicking below. Or try out the Bank of America HSA Savings Calculator to see how you might benefit from an HSA.
Learn more  about types of retirement accounts Try it out : the Retirement Account Selector Tool
Image shows a picture of the results page of the Bank of America HSA calculator Image shows a picture of the results page of the Bank of America HSA calculator
For illustrative purposes only
Bank of America HSA Savings Calculator hypothetical assumptions: Single, Current Age- 40, Retirement age- 65, 29% tax bracket, 5% rate of return; contributing $2,100 annually and estimated annual out of pocket expenses of $400

Did you know?

You can open an HSA on your own if your employer doesn't offer one. Learn more

How insurance helps you prepare for the unexpected

There are many different types of insuranceFootnote 6 that can help you protect your assets as well as your general wellbeing. Click through the list to see how various types of insurance might fit into your plan.
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Insure your life if others depend on you

Your employer may offer subsidized life insurance (most likely term life, which is the simplest form of life insurance). Other types, like whole life, universal life and variable life, can offer the opportunity of investment returns as well as protection.

Did you know?

In addition to insurance, an emergency fund is a key part of your emergency plans. Learn more with Bank of America Better Money Habits.
Previous slide of 3 Slide 1 of 3: Beneficiaries Slide 2 of 3: Healthcare Slide 3 of 3: Insurance Next slide of 3

Managing through life's events

Throughout your life, you're going to experience important events — like getting married or divorced, having a baby, a job change — that will affect your finances. While some are planned, others are not. We're here to help you prepare for those critical times.
Family  topics
Getting married  topic Starting a family  topic Getting divorced  topic Losing a loved one  topic Receiving an inheritance  topic

Getting married

Getting married or moving in together can be the start of an exciting new adventure. These resources can help you get ready for this new phase in your life.
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Starting a family

The cost of raising a child continues to increase. Learn how to prepare financially and protect your growing family.
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Getting divorced

Receiving an inheritance can open up new possibilities. These tips can help you prepare to manage an inheritance or unexpected new wealth.
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Losing a loved one

The last thing anyone wants to prepare for is the loss of a loved one. But there are important decisions to make, and planning ahead can help make this time a little less stressful.
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Receiving an inheritance

Receiving an inheritance can open up new possibilities. These tips can help you prepare to manage an inheritance or unexpected new wealth.
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Your first job

Congratulations on reaching an important milestone. These resources can help you get your finances and working life off to a great start.
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Changing jobs

A job transition means considering how you'll handle employer-sponsored benefits like retirement accounts, along with insurance and other perks.
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Job loss

While it may be tempting to reach for retirement assets after losing a job, look for other sources that won't have an impact on your long-term plans.
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Starting a business

Starting your own business can be exciting and challenging. Learn the basics of planning, preparing and launching your new endeavor.
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Buying a home

Whether you're a first-time buyer or already own a home and are looking to refinance or make a move, there are a lot of financial considerations connected to homeownership. These resources can help.
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Buying a car

A new car could be one of the most expensive purchases you make. Before you commit to the first vehicle that catches your eye, think about how to plan to use and pay for it.
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Saving for a large purchase (travel, etc.)

Achieving a shorter-term goal like taking a vacation or buying a car calls for a disciplined savings approach. These tips and resources can help you get started.
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Caregiving

If you're faced with taking on the responsibility of caring for an aging or ill loved one, these resources can help.
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Put your plans into action ... ready to get started?

Bank of America products

Explore Bank of America checking and savings accounts along with other banking products.
Learn more  about Bank of America products

Merrill investing accounts

Explore accounts for general investing, retirement, education expenses and more.
Open an investing account  with Merrill

Have questions?

Schedule an appointment to talk with a specialist.
Schedule an appointment  with Merrill

Learn about our other life stages

Early in your career  life stage information at Merrill Nearing retirement life stage information at Merrill In retirement life stage information at Merrill
Investing involves risk including possible loss of principal. Past performance is no guarantee of future results.

Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.
Footnotes 
You have choices about what to do with your employer-sponsored retirement plan accounts. Depending on your financial circumstances, needs and goals, you may choose to roll over to an IRA or convert to a Roth IRA, roll over an employer-sponsored plan from your old job to your new employer, take a distribution, or leave the account where it is. Each choice may offer different investment options and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment (particularly with reference to employer stock), and different types of protection from creditors and legal judgments. These are complex choices and should be considered with care. For more information visit our rollover page or call Merrill at 888.637.3343.
Footnote 
Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets.
Footnote 3 The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., ("Bank of America") and Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S" or "Merrill"), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp."). This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.

Footnote 
Please review the applicable Merrill Guided Investing Program Brochure (PDF) or Merrill Guided Investing with Advisor Program Brochure (PDF) for information including the program fee, rebalancing, and the details of the investment advisory program. Your recommended investment strategy will be based solely on the information you provide to us for this specific investment goal and is separate from any other advisory program offered with us. If there are multiple owners on this account, the information you provide should reflect the views and circumstances of all owners on the account. If you are the fiduciary of this account for the benefit of the account owner or account holder (e.g., trustee for a trust or custodian for an UTMA), please keep in mind that these assets will be invested for the benefit of the account owner or account holder. Merrill Guided Investing is offered with and without an advisor. Merrill, Merrill Lynch, and/or Merrill Edge investment advisory programs are offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S") and Managed Account Advisors LLC ("MAA") an affiliate of MLPF&S. MLPF&S and MAA are registered investment advisers. Investment adviser registration does not imply a certain level of skill or training.
You may also be able to obtain the same or similar services or types of investments through other programs and services, both investment advisory and brokerage, offered by Merrill; these may be available at lower or higher fees than charged by the Program. The services that you receive by investing through Merrill Guided Investing or Merrill Guided Investing with Advisor will be different from the services you receive through other programs. You may also be able to obtain some or all of these types of services from other firms, and if they are available, the fees associated with them may be lower or higher than the fees we charge.

Footnote 5 This material should be regarded as educational information on healthcare considerations and is not intended to provide specific healthcare advice. If you have questions regarding your particular situation, please contact your legal or tax advisor.

Footnote 6 All guarantees and benefits of the insurance policy are backed by the claims-paying ability of the issuing insurance company. They are not backed by Merrill or its affiliates, nor do Merrill or its affiliates make any representations or guarantees regarding the claims-paying ability of the issuing insurance company.

Footnote 7 Long-term care insurance coverage contains benefits, exclusions, limitations, eligibility requirements and specific terms and conditions under which the insurance coverage may be continued in force or discontinued. Not all insurance policies and types of coverage may be available in your state.

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Investment products offered through MLPF&S and insurance and annuity products offered through MLLA:
Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value
Are Not Deposits Are Not Insured by Any Federal Government Agency Are Not a Condition to Any Banking Service or Activity

Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.

Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets.
Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

This material is not intended as a recommendation, offer or solicitation for the purchase or sale of any security or investment strategy. Merrill offers a broad range of brokerage, investment advisory (including financial planning) and other services. Additional information is available in our Client Relationship Summary (PDF).

Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as "MLPF&S" or "Merrill") makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation ("BofA Corp."). MLPF&S is a registered broker-dealer, registered investment adviser, Member Securities Investor Protection (SIPC) popup and a wholly owned subsidiary of Bank of America Corporation ("BofA Corp").
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