Login | October 15, 2026
Between 20 and 65? 7 steps to take now
JULIE JASON
Published: October 15, 2026
If you are between the ages of 20 and 65 and you want to feel more prepared for retirement, consider taking these seven steps, which are designed for all types of markets.
Step 1: State your investment goals. What are your objectives? Goals determine how much you need to save each year, how much you should invest on a tax-deferred or tax-free basis, and how you need to allocate between stocks and bonds.
When you are retired, you will need to create cash flow from your financial portfolio to cover the gap (if any) between living expenses and the dollar amount of your expected pension and Social Security retirement benefits.
Assume your gap is $10,000. In year one, your goal would be to cover the gap with $10,000 of after-tax cash flow from your portfolio -- plus continue to grow your assets.
In later years, your gap may widen if you have additional expenses for health care or travel; plus, you'll need to adjust for inflation.
I'm using the term "cash flow" on purpose. That's the cash that you will use to pay your expenses. The source of the cash will be a withdrawal fueled by the sale of an investment, or income earned on an investment, or simply a withdrawal from a cash account, such as a bank account. Another source is a pension-like stream of payments from an annuity -- but you may want to use that income source earlier before calculating your gap.
Now say you are 25. You believe you will be paying for your retirement in full, since you don't work for a company that offers a pension and don't want to rely on Social Security.
Since you won't need to create cash flow for withdrawals until much later, your only job is to grow your capital over decades until retirement. That means focusing on saving and investing for the long haul.
Take advantage of opportunities at work by contributing the maximum possible to your 401(k) and other contributory plans. Invest with a focus on long-term growth. In addition, take advantage of individual retirement accounts (IRAs), favoring Roth IRAs if you qualify. (See tinyurl.com/2x6hwz87 for qualifications.)
Step 2: Check your tactics. Make sure you are not trying to reach your goals by overextending yourself.
Remember that an investment portfolio is like a bar of soap: The more you handle it, the smaller it gets. Most investors will do much better by going slowly and sticking to the basics. Avoid risky tactics, such as using leverage by borrowing money to buy stocks (margin).
Step 3: Reassess your investment strengths and weaknesses. If trading high-flying stocks is enticing but not an area of expertise, think twice about practicing with your retirement money. If you know nothing about stocks or stock funds and you need to grow your assets for retirement, recognize that as a weakness and make it a point to learn.
Ask your company to provide investment education if it doesn't already do so. Look at reputable online resources, such as FINRA (tinyurl.com/53xn43f4) and Investor.gov (tinyurl.com/2jtua89h).
Step 4: Reassess your tax planning. Are you making the best use of all tax-advantaged investment opportunities? Your 401(k)? Your IRAs? Are you paying attention to qualified vs. ordinary dividends and realized and unrealized gains, as well as capital gains distributions? (Look here for definitions: IRS.gov, FINRA.org.)
Step 5: Review your estate plan. Check your will, and don't forget beneficiary designations for your company retirement plans and IRAs. Designations should be reviewed each year, and copies should be kept with your important papers.
Step 6: Monitor your portfolio on a regular basis. Measure yourself against your goals, not someone else's winning trades. Ask yourself if you invested in a way that moved you toward your goals. Don't forget the effect of taxes -- and for longer periods, the effect of inflation.
Step 7: Finally, determine whether you will need to make major financial decisions before the end of 2026, such as taking tax losses. Now is also the time to start thinking of the coming year, an ideal point to review your overall financial picture and plan for the future.
These seven steps will help keep you grounded no matter what the direction of the market.
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Seasoned investment counsel (tinyurl.com/52nus8hz) and award-winning columnist and author, Julie Jason, JD, LLM, promotes financial literacy and investor protection. Read her latest book, "The Discerning Investor: Personal Portfolio Management in Retirement for Lawyers (and Their Clients)" (tinyurl.com/4u7h9pjs), published by the American Bar Association. Write to Julie at readers@juliejason.com. While all questions cannot be answered, each email is read and reviewed and can lead to discussion in a future column.
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(EDITORS: For editorial questions, please contact Clint Hooker at clint.hooker@andrewsmcmeel.com)
COPYRIGHT 2026 Julie Jason
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