Retirement planning for age 20-35

Retirement planning early means you give your money time to grow in a powerful way with compounding.

Retirement planning is financial freedom planning.


The dollars you save now have decades to grow before you need them. This can be worth $10,000 to $100,000 or more for you than if you wait later to save for retirement.

Why? That’s all due to the fairy dust of compounding. Read an Alice in Wonderland example that shows how much extra you can have just by starting to invest early.

Fidelity Investments suggests that by age 35 you should have saved one times your annual salary to be on track for retirement. If your annual salary is $45,000, then try to save that amount by age 35.

Not even close? Starting now can help you build the cash cushion you’ll need for retirement. Automate your savings by setting up monthly contributions from your checking account to an investment account–preferably tax-deferred or tax-free. Automation is a proven way to grow your money faster.

You can let your employer help when you get a job that includes retirement benefits such as a 401(k), 403(b), SIMPLE IRA or work pension plan. These benefits come in the form of matching contributions.

No employer plan? Open an Individual Retirement Account –IRA instead. You can contribute automatically every month until you reach the maximum for the year. For 2013, you can contribute up to $5,500 for the year, as long as you have earnings of that amount for the year.

Roth IRAs are one of the best ways to save for this age group. They are the only tax-free retirement vehicle around. Just imagine, when you get to your later years, you won’t owe any tax money to the government when you take your Roth out after age 59 1/2.

Can’t save that much? Just get started and do what you can. If you can only contribute $150 per month to an IRA, do that. When you get a raise or can afford more, raise the amount. Building financial security can start today.


“Learning to create abundance is a process of growth; it may require changing
your thinking and expanding your beliefs about what you deserve to have.”
Sanaya Roman