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For me personally I go

1st gen is C/Yellow
2nd gen is B/Red
3rd and 4th is A/Blue
5th/6th is star/gold

PT I usually don't limit but if a mare repeatedly throws low PT foals then she gets looked at.

A rough guide I use is 10+ for 2nd and 11+ For 3rd but I don't stick to it a whole lot

You can definitely achieve Red/B at gen 2, especially if you are making use of the Pasture Bonus. Gold by Gen 5 will be the hard one.

I want the chart Kalilm has posted for my regular foundation lines. For a line with a boosted sire (ExPro, ExPerf) I want A at gen 2 and Star at gen 4. It is possible to get Blue mares at gen 2 too! So exciting when that happens!

I required my Breeders to PT at a cut off when I was putting several thousand foals on the ground every season. If you are overrun with foals I don't think it's wrong to use PT to cull after you've used every thing else (paper, color, consistency). I think AFPT is much more important (average foal PT) and require a 0.5 point jump in AFPT for gen 2 and 3, so my AFPT chart looks like this:
Foundation mares AFPT 10.0
Gen 2 10.5
Gen 3 11
Then I slowed down a little
Gen 4: 11.4
Gen 5: 11.8

Remember that inconsistency pulls down your PT score, so you want to breed for consistency if you are aiming at high AFPT goals.

Didn't mean to hit post, lol sorry!

Here's my stud
Freaky Dreamer G1

I don't look at individual pt, but have been using afpt to help cull my mare herd. I am going more and more strict because I am trying to cull, but this is what I've been looking at.

2nd gen, red/blue- B/A (preference to A and Blue foals coming in) AFPT 10.5+
3rd gen, blue- A AFPT 11+
4th gen, blue- A AFPT 11.5+
5th gen just started, a bit of a mess. Star stud, currently blue mares, hoping to move to gold mares and or AFPT of 12+ eventually
For 6th gen fillies from star stud have to be gold and I'll be looking for superior to sire star colt. Untill then I'll probably breed the fillies to my 8th gen star boy till I have a boy for them.

I was previously using only AFPT but that was taking a long freaking time and I've seen that it wasn't reliable on it's own since a couple of my B stallions got snipped from AFPT that I now know was being affected by poor mares. I'm still working on papering everyone.

I've gotten a couple of G4 foals and both are snipped. My only G3 mare got snipped by hand, and deserved it too. Most of my G3 Stallions are looking at getting snipped but I'm gonna paper them and make sure.

On that note, another question. I'm papering my higher gens and working my way back to the foundations. Its that a good way to go? Or should I paper a horse and then look at it's parents/offspring if they paper poorly? I have 53 horses left to paper so I'm trying to establish a priority amongst my horses to see who I should paper as soon as I have the funds to do so.

I think your priorities should be based on space, personally.

I will keep upper gen horses that dont paper where ai want them to because they can be good show pony producers. If you have the room to hold onto show ponies, this can be a good, cheap strategy to build up your herd.

Similarly, as Obsidian said, I don't think you have to cull so strictly that you decimate your herd. If you only have a couple of gen 3s Papering where you want them to out of say, 30 mares, there is no problem keeping gen 3 Reds until you are producing plenty of gen 3 Blues. (I would, however, cull any gen 3 yellows!).

I personally would Paper from gen 2 as a priority, especially if you are seeing that your upper gens seem to be inferior. I would also be culling your foundation mares HARD for AFPT. And I would be considering a hard cut off of Red for your gen 2 mares. Mares are usually where quality lags with breeding--Papering and comparing stallions means that you can be pretty confident of a steady increase in quality, but with mares all you have is Paper and AFPT, which takes time to sort the wheat from the chaff!

So...

My priorities, now that I've rambled a bit would be:
Paper all stallions of breeding age. Cull all C Papered gen 2s, consider culling B Papered gen 3s if you have As.

Paper gen 2 mares. Cull Yellows.

AFPT all mares with 3 foals or more. Cull based on whatever cut offs you decide to establish (consider determining AFPTs of all mares in a generation and THEN deciding on an initial cut off, with a planned goal for the future as well).

Paper colts not of breeding age, cull as needed, plan future herd sires based on current colts. (For instance, if you have a B Papered gen 3 liver 4 year old and an A Papered gen 3 liver yearling, plan to retire the 4 year old when the yearling turns 3.)

If you get your foundation and gen 2 herds in order, that should improve the quality of your later gens.