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Saving for Retirement in Your 30s

Balance your current needs and future goals as life continues to change

As your earning power increases, your 30s are a great time to further build your retirement savings foundation. Here are some tips to consider.

Continue (or start) saving

Maximize tax-advantaged retirement accounts like your 401(K) or other workplace retirement plans. The earlier you invest, the more you may benefit from compound interest over time.

  • Enroll in your workplace retirement plan. If your company offers a match, consider taking full advantage by contributing at least as much as the match amount.
  • Save as much as possible. Consider contributing at least 10% of your income to your retirement plan — even if it means taking small steps to get there.
  • Contribute additional money. Think about setting aside additional money you may receive during the year, such as bonuses, raises, and tax refunds to help accelerate your saving.
  • Build your emergency fund. Most experts agree that you should set aside 3 to 6 months of your living expenses in an easy-to-access account such as a checking or savings account.

Put your retirement investments in the right place

In your 20s, you may not have put much thought into the amount of risk you are willing to take with your savings. Now, as you develop a better idea of your needs and expectations, take the time to make sure your investment strategy aligns with your tolerance for risk and your retirement timeline. 

It’s important to review and understand how your risk tolerance and timeline to retirement impacts your account’s asset allocation strategy. Asset allocation is how you distribute your savings among the different types of investments (stocks, bonds, and stable value or money market investments). A couple things to note:

  • Your asset mix plays a significant role in how your account may grow over time, and its volatility (risk). 
  • An account more heavily invested in bonds and stable value investments may not fluctuate as much as one invested more heavily in stocks; however, historically stocks have offered a better opportunity for long-term growth compared to bonds and stable value investments. An investment in the stock market should be made with the understanding of the risks associated with common stock. Stocks offer long-term growth potential, however may provide less current income than other investments.

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Watch your spending

Minimizing spending and debt can improve your overall financial health.

  • Search for low interest rates. You may want to consider finding the lowest interest rate available and consolidating your debt. Note: your specific situation may impact how you plan to minimize spending and debt.
  • Pay off debt. Pay off as much debt as you can each month.
  • Don't forgo saving. While you reduce debt, consider saving a little bit at the same time. Use our Savings Calculator to estimate how much more you can save when you reduce spending.

Refine your plan

Monitor your accounts and refine as needed to ensure you are on track. A few things to consider:

  • Create a plan. Write down your retirement goals and outline your next steps.
  • Stay on top of your asset mix. Check your asset allocation periodically to assure you are on target.
  • Track your progress. Check the status of your account to determine if you are on track to meet your goals, or if you need to increase the amount you are saving.
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