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Saving for Retirement in Your 20s

Start thinking ahead

Smart habits now can benefit you later

In your 20s, one thing you can do is start saving. Doing so gives your money a chance to grow. The more you save now the less you may have to save overall to reach your goals.


Consider contributing regularly to your workplace retirement plan. Here are three steps to get you started:

  • Determine how much to save. A rule of thumb is to save at least 10% of your yearly income for retirement, starting in your 20s.
  • Increase savings over time. Consider increasing the amount you save over time.
  • Identify your asset allocation strategy. Take our Risk Tolerance Quiz for help determining whether you are a conservative, moderate, or aggressive investor.


Enroll in your retirement plan and start saving.

  • Enroll in your retirement plan at work. Decide on a contribution amount. Once that is set, the money is automatically withdrawn from your paycheck. You may have the option of contributing pre-tax or after-tax, depending on your plan.
  • Take advantage of employer matching. If your employer matches contributions, consider contributing at least this amount.
  • Choose your investments. Choose from the investments offered in your retirement plan, weighing the potential risk and reward.

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Track your savings

Use our Retirement Quick View Calculator to see how much you should save to reach your goals.

Watch your spending

An action plan may help you spend less and save more. Some ideas to consider:

  • Create a budget. Think about creating an action plan that may help you balance saving and spending.
  • Keep your debt under control. Consider finding the lowest interest rates available and consolidating your debt. Note: your specific situation may impact how you minimize spending and paying off debt.
  • Build an emergency fund. Most experts agree that you should keep 3 – 6 months of your living expenses set aside in an easy to access account such as a checking or savings account.
  • Reallocate your funds. As you reduce your debt, consider putting the extra money that’s now available toward retirement and other savings goals.
Watch our video to understand keys to retirement success.

Keys to retirement success

You can control the two biggest drivers of retirement success — how much you contribute and how you distribute your money among types of investments.

Watch the video