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When Should I Start Saving for Retirement?

How do you go about saving for retirement in your 20s, versus doing it in your 30s? And in your 40s? Here are different mindsets for saving for retirement.
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While there’s truth that saving for retirement as early as possible will help the same amount of money grow more, sometimes life doesn’t go according to plan. It can be really hard to make a priority out of something that most likely won’t happen for decades, especially when there are so many other things that you want to do with your money now.

So how do you go about saving for retirement in your 20s versus doing it in your 30s? And in your 40s? Here are different mindsets for saving for retirement in the different decades throughout your life, plus some strategies you can use to squirrel away money.

Your 20s: Creating a system, building habits

While you may not have as much money as you would like to sock away toward retirement, now is a good time to lay the groundwork and create a system for saving for your golden years. First up, figure out how much you can reasonably put away toward retirement while taking care of other money matters, such as your monthly expenses, emergency fund, and debt.

Saving just a small amount every month helps. If you have an account with Simple, one thing you can try is to create a separate Goal for your retirement, then move it over to a retirement account at the end of the month. This can help take away some of the worry and anxiety that come with wondering how much you should save, if you’re doing it right, etc. Just starting to save feels great! Plus, you can always make changes along the way. The important thing is to begin and to build a habit.

Take your time in exploring different options to see what works best for you at the time, and don’t be afraid to engage in a little bit of experimentation. This is for your future life as a retiree, after all! If you’re feeling bold, you can challenge yourself to increase how much you save every month.

There are times when signing up for that, say, matching one percent offered by your workplace may not seem worth it, but it is essentially “free money.” And because your end goal is decades away, your money will have time to take advantage of the magic of compound interest, and grow much more than if you started saving later.

Your 30s: Leveling up

In your 30s you might be building momentum in running your own business or kicking butt at your job. In turn, you’ll potentially have more money to put toward your retirement. If you can swing it, ramp up your savings. Try to come up with scenarios where you can afford to save a little extra toward your nest egg, such as when you score a bonus, get a promotion at work, earn money from a side hustle, or run into a bit of unexpected cash.

One thing you can do is to create a Goal in your account for your “bonus wins” that can go toward your retirement. For instance, for every bonus you get at work, you can also save X percent toward your retirement, and put the rest toward another savings goal.

At the same time, your retirement goals may also be running up against major life changes. For instance, you might be starting a family, or looking into buying your first home. To keep your eye on the prize, make a pact with yourself to make sure you steer on course. You can even come up with some scenarios and what you can do to stay on top of your retirement savings. For instance, if you buy a home and have to spend more on housing, you’ll then scale back on, say, eating out with friends.

Your 40s: Give it laser-sharp focus

As you have less time on your side, you’ll want to home in on your retirement with laser-sharp focus by putting as much as possible into a retirement fund. If you’ve been on cruise control for the past few years, now’s the chance to really buckle down and take a close look at where you’re at and where you want to be. The key? Be honest, especially when it comes to where you’re at.

As you’ll be at a different place financially and life-wise than, say, during your 20s, you’ll have to take into consideration your current lifestyle and the expenses and challenges that come with it. You might have to factor in the needs of your family, too. New kinds of questions may pop up, such as: How will I pay for my kid’s summer band camp? Can we really afford that summer road trip in a motorhome? What kind of life insurance should I get? The sort of thing the future grown-up you would care about.

You’ll probably want to figure out what you have in your arsenal to save as much as you can. Knock it out of the park. Maybe your “money superpower” is that you have a business that has amazing earning potential, or you’re a pro when it comes to frugal hacks. Have fun and get creative about socking away as much as possible.

While it’s not always at the top of your list of “must-dos,” saving for retirement is on the horizon. Think of it as planting the seeds that will one day sprout into something amazing, massive, and robust. The future thing you planted will thank you—and might even pay you dividends.

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