The 5 Stages of Building Wealth

Building wealth is not only about growing money; it’s about making financial decisions that create stability, flexibility, and confidence over time. Whether you are just starting out or fine-tuning your retirement strategy, understanding where you are in the wealth-building journey can help you focus on what matters most right now. 

Below are the five stages of building wealth, along with what to prioritize in each. 

Stage 1: Laying the Foundation (Typically Your 20s)

This is where your financial story begins. It is less about the numbers in your account and more about setting habits that will support you for decades. 

Key Priorities: 

• • Build an emergency fund that covers at least three months of expenses. 
  • Create a budget that keeps you living below your means. 
  • Start paying down high-interest debt. 
  • Begin saving for retirement and aim for consistency over perfection.

If your employer offers a retirement plan with matching contributions, contribute enough to receive the whole match. It is one of the few “free money” opportunities available in personal finance. 

Ask Yourself

What small habit can I build today that will make the most significant difference five years from now?

Stage 2: Gaining Momentum (Typically Your 30s)

By now, your financial plan is a little clearer. You might be advancing in your career, starting a family, or buying a home. The goal in this stage is to continue building stability while planning ahead. 

Key Priorities: 

• • Keep retirement contributions growing, targeting around 15% of your income if possible. 
  • Protect your income with adequate life and disability insurance. 
  • Pay down remaining debts strategically, such as student loans or car loans. 
  • Start saving for future goals, such as college funds or a larger home. 

This is also when many people benefit from working with a Wealth Manager who can help coordinate investments, taxes, and insurance decisions around a long-term plan. 

Stage 3: Expanding Your Strategy (Typically Your 40s)

This is often a growth decade. Your income and savings potential may be at their highest, but so are your responsibilities. The focus now is on refinement, ensuring your strategy is efficient, diversified, and aligned with your goals. 

Key Priorities: 

• • Review your investment mix and rebalance regularly. 
  • Increase retirement savings when possible by using tax-advantaged accounts. 
  • Evaluate college funding and plan for upcoming expenses. 
  • Review your Legacy Wealth Strategies, including beneficiaries, wills, or trusts. 

Ask Yourself

If something unexpected happened tomorrow, would my financial plan still hold up?

Stage 4: Maximizing Opportunity (Typically Your 50s)

As retirement gets closer, your focus shifts from accumulation to preparation. This is the time to make meaningful progress while reducing risk. 

Key Priorities: 

• • Estimate your retirement income and expenses. 
  • Pay down your mortgage or other significant debts if possible. 
  • Consider catch-up contributions to retirement accounts. 
  • Reassess insurance needs and healthcare planning. 

This is also a good time to meet with your wealth manager to protect different retirement scenarios and ensure your strategy supports your desired lifestyle. 

Ask Yourself

Am I building flexibility into my retirement plan, not just stability?

Stage 5: Transitioning to Retirement (Typically Your 60s and Beyond)

The final stage is about shifting from saving to spending intentionally. You have built your wealth, and now it is time to protect and enjoy it. 

Key Priorities:

• • Develop a tax-efficient withdrawal plan for your retirement income. 
  • Review your Social Security claiming strategy. 
  • Keep your Legacy Wealth Strategies documents up to date and aligned with your wishes. 
  • Stay diversified and avoid taking unnecessary investment risks. 

Your focus is no longer just growth. It is about creating a steady, reliable income that supports the life you have worked hard to build. 

Ask Yourself

What does enjoying my wealth mean to me, and am I planning for that version of retirement?

Progress Over Perfection

No one’s financial path follows a perfect script. You might move between stages, hit pauses, or restart. What matters most is staying intentional, building good habits, making informed choices, and adjusting as life changes. 

If you are ready to map out your next stage of building wealth, you can schedule a 10-minute guidance call with a Wealth Manager to talk through where you are and what next steps make sense for you. It is a simple way to start bringing clarity and confidence to your financial journey.