Chris O'Shea
Retirement will come quicker than you think. That’s why, even if you’re in your 20s or 30s, you should think seriously about saving. Here are some ways to get started saving for retirement while you’re 40 and under.
Max Out Workplace Savings
The easiest way to save for retirement when you’re in your 20s and 30s is to take advantage of a workplace 401(k).
- Max it out. Aim to contribute the maximum amount allowed each year. For 2025, that’s $25,000.
- Divert raises. Trouble making the maximum? Try stashing any bonuses or money windfalls in your 401(k).
- Consistent increases. You can also slowly increase the amount you’re contributing over time. If you move it up slowly, you won’t miss the money as much.
And remember, even small increases will add up over time. If you make $50,000 per year and contribute six percent of that salary, when you’re 75, you’ll have saved just shy of $1.2 million.
Add an IRA
Once you’ve maxed out 401(k) savings, it’s time to add on an IRA. Roth IRAs make a lot of sense when you’re younger because your tax bracket is typically lower when you’re starting your career. With a Roth IRA, you contribute after-tax money, and your funds grow tax-free over time. When it’s time to make withdrawals in retirement, you’re not hit with a tax bill. You can also consider a Traditional IRA based on your situation. The bottom line is to save as much as you can in a tax-advantaged account.
Keep Going
No matter what happens, don’t stop saving for retirement. When you’re just getting started in your career, there’s a good chance you’ll have some ups and downs. Remember to keep contributing to your retirement, even if it’s a small amount.
Do One Thing: Slowly increase your 401(k) contributions over time so you’re saving as much as possible.
Jean Chatzky
