Advice: Retirement Readiness – Getting Started Age 20 – 35

Key Takeaway

Anticipating the challenges we face at various life stages can help us plan for a more comfortable retirement. Those that are just getting started in their working career are in a unique position. Starting to save for retirement as soon as possible gives you the best chance at a successful retirement.

Here are some of the obstacles you might face in allocating money to retirement:

  • Debt – Personal debt and student loans can take up a large portion of your paycheck and make it difficult to find money to save for retirement and emergencies.
  • Low Income – Those just starting their career might not yet have the income they plan for the future. You might not feel like you have enough money to support yourself and save.
  • Social Security – Experts largely agree that most people will need between 70 percent and 85 percent of their current income in retirement. Social Security will only provide a portion of that amount.

Action Steps

  1. 1

    Enroll in your employer’s retirement plan. An employer-sponsored plan is a simple and convenient way to save regularly for retirement. Plus, contributing on a tax-deferred basis allows your investments to grow at a much faster rate than a taxable savings program.

  2. 2

    Pay down debt. Debt payments represent a huge barrier to financial wellness, draining available assets and preventing people from saving. Identifying needs vs. wants encourages us to look at our financial obligations differently. Determine if there are any “wants” you can reduce or get rid of and do your best not to incur more debt.

  3. 3

    Develop a spending plan. Creating a budget and tracking your expenses can help you better determine where you can cut back. If you’re carrying a balance on credit cards, make paying them down a priority. The income you spend on credit card payments is money you aren’t saving and the interest on debt can be significant.

  4. 4

    Revisit your expenses. Look at your fixed expenses to determine if there are more affordable alternatives. Are you getting the best deal available on your auto and home insurance? What about your cell phone, internet, and cable providers? Switching companies might save money.

  5. 5

    Build an emergency fund. Saving for emergencies is also a key component of financial wellness. If you have trouble setting aside money, remember that out of sight, is out of mind. Open a separate account for your emergency fund and, if possible, look at having your employer deposit part of your pay directly into your savings.


  • Aim for deferring 10-15% of your income to your retirement plan by the time you reach age 35.
  • If your employer-sponsored retirement plan offers a match, make sure you are contributing at least enough to receive the full matching contribution.
  • Plan for emergencies. Saving six months of living expenses will see you through most financial difficulties.