The views of this article are the perspective of the author and may not be reflective of Confessions of the Professions.
It’s never too late to start planning for retirement, and especially never too early. We have outlined key retirement strategies for those in their 20s, 30s, and 40s based on data from the Center for Financial Services Innovation.
Most people in their 20s don’t have enough savings to cover 3 months of living expenses, while those in their 30s usually feel financially insecure about their long-term goals. Individuals in their 40s often worry about having no retirement savings at all.
By your 20s, start saving an emergency fund to cover early debt payments such as a home, car, or other asset loans. They should start investing in at least one retirement account, such as a 401(k) or IRA. We suggest saving at least 15% of your income and taking advantage of your employer’s retirement benefits.
In your 30s, build an emergency fund for 3-6 months’ worth of expenses. Begin increasing your contribution to your retirement fund and work toward having a years worth of salary saved.
In yours 40s, maintain your emergency fund and save for other expenses when needed. Work on reducing debt and diversifying your investments. We suggest saving 3x your annual salary by 40 and 4x your salary by 45.