How should I plan for retirement in my 30s?

Retirement is still a ways away when you’re in your 30s. But, what you save during these years can make a huge impact on your retirement finances. Why? Because the earlier you save, the more time your money can be invested, growing and compounding year after year. Just make sure your savings are tax-advantaged and exposed to the lowest possible fees.

Here are some tips to help get you planning for retirement in your 30s:

  • Save at least 10% of your salary. With the cost of starting a family, you might not be able to put away as much of your salary in your 30s as you did in your early 20s. But, since you likely make more, it can still amount to a lot. There are limits to the amount you can contribute to your 401(k) or IRA, so don’t hold off and expect to do all your saving later.
  • Make sure you’re taking advantage of tax-deferral, as with a 401(k) and IRA. The money that you contribute to 401(k)s, IRAs, and other qualified retirement savings plans grows tax-deferred until retirement. Companies typically will match a portion of your 401(k) contributions, so understand how it works and take advantage of it.
  • Find a simple and low-cost investment plan. A simple, streamlined investment portfolio is easier to manage and less likely to yield major problems. All you need is a diverse, low-cost index mix of stocks and bonds that line up with your risk aversion and your investment timeline. In your 30s that mix will look something like 80-100% in stocks and 0-20% in bonds.
  • Relax a bit. If you’re saving regularly and investing simply and smartly, then you’re doing your part for this decade. All you’ve got to do is check in from time to time and keep an eye on your progress.
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Our Retirement Planning Guide covers the basics and makes it easy to start preparing at any age.