How to Start Saving for Retirement

A happy senior couple sitting on the front of a sail boat

When you’re thinking about how to start saving for retirement, you need to remember how many candles were on your last birthday cake. After all, your strategy should vary depending on your age.

How to Save for Retirement in Your 20s

When you’re in your 20s, starting is the most important step. Even putting in a little bit each month is going to see your nest egg grow considerably by the time you leave the working world. Good old compound interest. If your employer offers a 401(k) match, take advantage of your company’s. If you don’t have a 401(k), open a Roth IRA online through a mutual fund company. If your income is low, Saver’s Credit lets you claim between 10% and 50% of your IRA or 401(k) contributions, up to $2,000 per individual.

How to Save for Retirement in Your 30s

It’s time to start optimizing your savings. Start by paying off debt so you can put more towards retirement. If you didn’t open one in your 20s, now’s the time for a traditional or Roth IRA — the annual maximum you can contribute if you’re under age 50 is $5,500, so start maxing it out asap. You might also want to contribute to a health savings account (HSA). You can used saved funds for qualified medical expenses and then withdraw anything that’s left when you’re 65 without paying tax or penalties.

How to Save for Retirement in Your 40s

You probably have added responsibilities in your 40s, and you should also have a higher income. Now is when you want to start figuring out how you’ll spend your retirement. Work with financial planners to figure out your goals and make your retirement plan more concrete. You’ll also want to be maxing out your 401(k) if possible. If you don’t have one, open a taxable account and contribute there.

How to Save for Retirement in Your 50s

Once you turn 50, you can take advantage of catch-up contributions to your 401(k) and IRA. Hopefully you won’t need to, but this is a good idea if you didn’t get on track early. As of 2018, you can contribute an additional $1,000 per year to your IRA and $6,000 per year to your 401(k) once you turn 50.

Xpress Cash Can Help You Figure Out When to Start Saving for Retirement

We understand saving for retirement can be hard, so visit one of our locations in Idaho, Michigan, or Wisconsin to start moving forward. You can also contact us online.