Are You Hitting Your Retirement Investment Milestones?

Retirement planning isn’t just about saving—it’s about creating a future where you can live out your dreams. With thoughtful planning and regular check-ins, you can stay on track toward financial security and ensure you’re hitting the investment milestones that matter most. Toward that goal, here are important savings and investment milestones to guide your progress and help you feel confident in your retirement planning.

Of course, everyone's exact milestones will be a little different, depending on their life specifics and the goals they've set. Let’s explore how you can reach your possible by leveraging the latest updates for 2025 to enhance your retirement plan.

Age 20 - Start a 401(k)

The time to start saving for retirement is now. Don’t wait until you earn more or have “extra” money. Take advantage of the tax and compounding benefits of your company’s 401(k) plan and strive to save at least 15 percent of your pre-tax income. In 2025, the contribution limit for 401(k) plans is $23,500, giving you more room to grow your savings.

Age 25 - Update Your Investment Strategy

As a retirement saver, the large number of investment choices can be dizzying. How do you put them all together? Research shows that asset allocation—the specific mix of stocks, bonds and other investment types—makes a bigger impact on your long-term investment success than investing acumen.

Alternately, consider using target-date funds, available in most 401(k) plans and brokerage accounts. These funds automatically match the level of risk and growth potential to your age and time horizon and come up with the suggested asset allocation for you.

Age 30 - Protect Those You Love with Life Insurance

Protecting your family and loved ones is a critical milestone. Consider purchasing life insurance to ensure your family’s financial well-being in case the unexpected happens. Term life insurance is a cost-effective option for those with significant financial obligations, such as young children or a mortgage. Of course, nothing can replace you, but life insurance can help your family navigate a difficult time without the specter of financial hardship looming over them by providing much needed funds for paying everyday bills, saving for college and keeping retirement planning on track.

How much life insurance to buy? Consider your income and liabilities. As a general rule, financial experts advise life insurance coverage of 10 times your annual salary, so someone earning $100,000 should consider a policy with a $1 million death benefit. However, if you and your spouse have substantial debt or if you have dependents with special needs, you might want to consider a larger policy.

Term life insurance is a cost-effective way to get protection, especially during the years when your death would cause the greatest financial difficulty. With term life, you choose how long you want coverage to remain in place, typically 10, 15 or 20 years. The cost of insurance depends on the death benefit, the term, your age and how healthy you are. The younger you are, the more affordable life insurance is.

There are some cases, however, when it makes more sense to purchase a permanent life insurance policy. As the name suggests, you can buy a permanent life insurance policy without an end date, which is why it tends to cost more. On the flip side, it can provide important coverage in certain situations, such as if you have dependants who require extra care or you have significant financial obligations that are not time-sensitive.

Another bonus of permanent life insurance: policies build cash value that you can tap or leverage while you are still alive, though any money you take out without replacing could reduce your heirs' death benefit.

Finally, remember that life insurance is not a set-it-and-forget-it financial instrument. As your life changes—through the birth of children, the launch of a business, the purchase of a home, a divorce and so on—you'll need to revisit your policy to make sure it's still meeting your obligations.

Age 35 - Open a Roth IRA

A workplace 401(k) can be a retirement workhorse, especially if you get an employer match, but it does have its limitations, particularly as your career advances, and your ability to save grows.

First, as of 2025, your annual contribution limit to a 401(k) is $23,500 annually (or $31,000 if you’re aged 50 or older). This tax-efficient tool offers flexibility and control over your financial future. Second, while your contributions come out of your paycheck pretax, you'll eventually have to pay taxes when you start withdrawing from the account.

To give yourself additional bandwidth to save, and gain some tax flexibility at retirement, consider opening a Roth IRA, as well. A Roth Individual Retirement Account (IRA) is a tax-efficient retirement saving tool that lets you put away $7,000 (or $8,000 if you are 50 and older) with after-tax dollars. You won't get a tax deduction for the contribution, the way you do with traditional retirement savings vehicles, but in exchange you get tax-free withdrawals in retirement. Having a Roth lets you have more control over your tax situation at retirement, and it can even be used as a tax-free inheritance for your heirs. As you age, you should reduce your stock exposure because, while stocks have more earning potential than bonds, they have greater volatility, leaving you more exposed to risk as you get closer to retirement. To quickly arrive at the percentage of stocks to own, one good rule of thumb is to take 125 and subtract your age. So, when you are 45, your stock allocation should be 80 percent. The recommended starting point used to be 100, but many financial experts have upped it to tilt portfolios more heavily toward stocks given the higher life expectancy of current generations.

Age 55 - Decide On Your Social Security Strategy

The most common questions about Social Security benefits are at what age should you retire and how much will you receive? While financial considerations are important, other factors such as your enjoyment of work, health, and lifestyle could factor into your decision.

If you choose to retire early, your benefits will be reduced by a small percentage for each month before your full retirement age. Wait until full retirement age, on the other hand, and you'll receive a larger monthly check. What's more, for those born in 1960 or later, you significantly increase your Social Security benefit by postponing your full retirement age until age 70 because you’ll get a bonus for each month you wait. Consider this strategy if you are in good health. If you are married, you and your spouse have a number of claiming options that can result in larger overall payments. Consult with a financial advisor who can explore these more complex strategies with you.

Age 60 - Plan Your Retirement Income Withdrawal Strategy

Going into retirement, you will likely have different pools of retirement assets, from 401(k)s to IRAs to taxable investment accounts. Each one has different tax rules and withdrawal requirements. For example, traditional 401(k)s and IRAs are taxed on the full amount of the withdrawal as ordinary income. In taxable investment accounts, though, you are only taxed at the lower capital gains rate on gains.

The order in which you make your withdrawals matters. Typically, financial advisors suggest tapping retirement accounts in this order to deplete accounts with the highest tax rates first:

1. Traditional 401(k) and IRAs
2. Taxable investment account
3. Roth 401(k) and IRA

If you’re aged 60 to 63, you can take advantage of the enhanced catch-up contributions introduced by the SECURE 2.0 Act. For 2025, this allows an additional $11,250 in catch-up contributions for 401(k)s, bringing your total allowable contribution to $34,750. Use this opportunity to boost your retirement savings before you transition out of the workforce.

Your financial future is built one milestone at a time. With discipline, consistency, and the right strategy, you can confidently reach your possible and create the retirement of your dreams. For more personalized planning, connect with a Bankoh Investment Services (BISI) advisor today.

Bank of Hawaii and Bankoh Investment Services, Inc. do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax or investment advice. You should consult your own tax or accounting advisors before engaging in any transaction. 

Investment and Insurance products are offered and sold by Bankoh Investment Services, Inc., a nonbank subsidiary of Bank of Hawaii and a member of FINRA/SIPC. Investment and Insurance products are NOT FDIC INSURED, NOT BANK GUARANTEED, NOT A DEPOSIT AND MAY LOSE VALUE, INCLUDING LOSS OF PRINCIPAL