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Feeling behind on your retirement savings? You’re not alone. Mid-career professionals often face the challenge of catching up while juggling other financial priorities. But don’t despair.
In a recent podcast episode of Yahoo Finance’s Decoding Retirement, Stephanie Guild, head of investment strategy at Robinhood, shared the concrete steps you can take now to maximize contributions, diversify your portfolio, and secure a more comfortable future.
The key, Guild said, is to start now.
Mid-career individuals shouldn’t worry about what they haven’t yet done in terms of planning because it’ll only serve as a distraction. Instead, they should prioritize catching up by maximizing contributions to their 401(k) or IRA.
In 2025, the maximum contribution limit for a 401(k) is $23,500. For individuals under 50, the IRA contribution limit is $7,000, while those 50 and older can contribute up to $8,000. For 401(k) participants aged 50 and older, the standard catch-up contribution is $7,500. However, those between ages 60 and 63 can make an additional catch-up contribution of $11,250, allowing for even greater retirement savings.
Congolese asylum seeker Valere, 10. and retired orthopedic surgeon Dr. Laurie Leonard, 95, play a game of tournament chess on July 15, 2023 in Portland, Maine. (Photo by John Moore/Getty Images) ·John Moore via Getty Images
In addition to funding Roth accounts, these individuals should consider saving in a taxable investment account — if they’re able to. This provides more flexibility for withdrawals since traditional IRAs and 401(k)s require taxes to be paid on distributions, Guild noted.
Diversifying savings across different account types can help manage future tax liabilities.
From an asset allocation standpoint, a mid-career individual’s investment strategy could be based on their time horizon. “You obviously have less time than maybe you did when you were in your 20s, but you also may have more income,” Guild said. “And that can be a factor.”
With higher earnings, for instance, a mid-career individual may have the capacity to take on more risk than traditional formulas suggest. Either way, consistency is key.
“Every month or every quarter, set it on autopilot so that you’re not forgetting to save, because the sooner you can start doing it, the better,” Guild said.
Mid-career individuals often juggle multiple financial priorities, such as saving for retirement and their children’s education at the same time. “It’s hard,” said Guild, who noted that she’s in that position now.
One strategy is to clearly define one’s top financial priorities and allocate funds accordingly.
“What do I care about the most and try to split it up,” Guild said. “And if it means that I sacrifice things for myself … I do that and I know it’s not easy. I wish I could say that there’s a magic formula. I don’t think there’s a magic formula.”
If it comes down to individuals choosing to fund retirement saving or their children’s education, Guild stated that she would opt for prioritizing retirement.
“If I can save enough for myself, then I don’t actually have to rely on my kids when I’m older,” she said. “I actually think that’s just making the next generation as financially sound as possible.”
As for individuals who might be on retirement’s doorstep within the next 10 years, Guild offered simple advice: Take a close look at expected expenses, and ideally do this as early as possible.
Start by assessing current spending. There are two common rules of thumb to guide this process. A common guideline suggests replacing about 80% of pre-retirement income to maintain a similar lifestyle in retirement.
“Some people maybe need more because they want to do more things when they’re in retirement because they have more time,” Guild said. “But take a look at that. Can you support that?”
Another rule of thumb is to determine whether a retiree can sustain their lifestyle by withdrawing just 3% per year from their retirement accounts. If withdrawals exceed 3%, it may lead to depleting the principal. If retirees can manage with a 3% withdrawal rate or less, Guild said, they may be able to preserve their nest egg and pass it on to heirs or other family members.
As for relying on Social Security, Guild cautioned that the current US government deficit of $2 trillion should serve as a “warning flash for all young people” that the program may not remain a reliable source of income in the future.
Unless the government makes adjustments to sustain the program, she stressed that individuals must take greater responsibility for their own financial well-being.
“And so saving could not be more important,” Guild said.
