If you are in your thirties and have not yet planned or saved for retirement, you are not alone. Many people breeze through their twenties, bouncing from job to job or simply just thinking that planning for retirement can come later on in life. However, once you hit your thirties, you may find yourself thinking that it is about time to save for your future. The question then becomes what should you do or know about retirement planning for the first time in your thirties? Get to know some of these key points so that you can do the best job of saving for your retirement future.
You Need to Play Some Catch-Up
If you are well into your thirties or even in your early thirties, you are a little bit late to the party when it comes to starting the retirement savings process. Most financial experts recommend you start the savings process in your twenties and have at least a year's salary saved in a retirement account by age 30.
Because of that, you will need to play some catch-up on your retirement. A good plan is to first start by investing in a company retirement account like a 401k if your employer offers one. If they offer matching contributions up to a certain percentage of your salary, max that out at the bare minimum. That is free money going into your account.
Budget as Much as Possible into Retirement Savings
A part of playing catch-up on your retirement savings is to allocate as much in your budget as possible into retirement savings, at least for a few years. You want to get to the point in your mid-thirties that you have at least two years' worth of salaries saved in your retirement accounts.
So, create a strict budget and stick to it. If you have any extra money after your expenses, try to funnel into a retirement account. This will help to ensure that you are getting as much money in your accounts as possible.
Do you ever have a windfall month where you get a bonus, stimulus check, or make extra money? Put that extra in your retirement account immediately to make up for lost time.
Open Two Retirement Accounts If Possible
If you are behind on your retirement savings, it is a good idea to have both a 401k and an IRA (preferably Roth). This will help you increase your retirement savings and diversify your retirement portfolio.
Max out your company match on your 401k first and then invest extra into a Roth IRA up to the maximum amount allowed (generally $6000 a year). Then, you can always invest any extra beyond that into your 401k as well.
Knowing these tips to help you plan for retirement when you are just starting in your thirties, you can get the process started as soon as possible and get your savings underway.
Share12 January 2021
After we bought a house, I started realizing that we were going to need to learn to save a little money. We had become pretty laid back about spending because we were so accustomed to making so much extra each month, but with a mortgage, we found ourselves running out of money on a regular basis. I decided to get real about our finances, which is why I set up a financial plan to stick with year round. You wouldn't believe how much of a difference that simple plan made. We went from scraping together money to head to the grocery store to sticking with a rock solid budget.
