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Retirement may seem years away but thinking about it now can make a big difference in how it’s spent. It will, after all, rely on your ability to secure enough income to live off or find an alternate income stream—one that’s enough to cover your expenses, and maybe even a few bucket-list adventures.

Without a retirement plan, you can jeopardize everything from your home to your health. Sadly, despite its importance, many consumers are neglecting to save enough money, or in some cases, at all.

Are you saving enough?

If not, you’re not alone. According to the Federal Reserve, 40% of adults feel they are saving enough for retirement. Perhaps more concerning, 26% of the non-retired had no retirement savings at all.

The statistics are even more startling when broken down by age—especially for the under 40 crowd. A full 42% of individuals 18 to 29 and 26% of those between 30 and 44 are not saving at all. And, even though there is an uptick in savings at the age of 44, it becomes increasingly difficult to save enough the later you start.

Why You Should Get Started Early

How much you need for retirement depends on everything from your existing debt to your golden-year goals, but many feel $1 million is reasonable.

Seem like a lot?

This may not even be enough depending on your situation. Don’t forget you’ll essentially need to pay yourself an annual salary for your remaining years.

Regardless of how much you need, the key is to start as soon as possible. For instance, if you started saving at age 20 with a monthly contribution of just $319, you’ll likely make that $1 million mark by the age of 67. To reach the same goal at 40 years old, you’d need to save $1,240 a month.

That’s a lot of money when you’re trying to balance bills, mortgages, a family, or other expenses.

Starting earlier also allows for the benefit of compound interest. A savings of $10,000 with 5% annual compound interest can grow to $43,219 in 30 years. But over 40 years, that same savings will grow to $70,399.

How to Get Started

There are many ways you can get started, but according to the Federal Reserve study mentioned earlier, over half of Americans choose to do so through a defined contribution plan. Still, a full 42% plan to rely on savings outside of a retirement investment account, and 33% decided to turn to IRAs. And, in many cases, individuals choose a combination of investment vehicles (e.g., a 401k supplemented by an IRA).

What’s best for you? That depends, but getting started sooner rather than later is a must.

Start by Just Saving Money

The best way to get your future on track is to simply start saving money. You can’t, after all, start a retirement account without money. Review your current expenses and identify opportunities to cut back.

Once you start building up your savings and an emergency fund, you can consider investing that money into some kind of retirement account. Just be sure to weigh the opportunity cost of investing vs. something else like paying off student debt.

Explore Different Account Options

There’s more than one path to retirement savings, so you’ll need to select the best option for your current finances and your future needs. Also, you can—and probably should—rely on more than one retirement strategy.

Contribution plans through an employer

One of the most common retirement plans, this is offered by employers and contributors can include the employer, employee, or both. Contributions are tax-deferred and can be for as long as your employee relationship lasts.

These include 401ks, 403(b)s (non-profit employees), 457 plans (state and municipal employees), and Thrift Savings Plans (federal employees) also fall into this category.


Unlike a 401k or similar employer-based contribution plans, which must be hosted by the employer, anyone under 70.5 years of age can choose to invest through an Individual Retirement Account (IRA).

Like a 401k, IRAs offer tax-deferred growth and is a good solution for individuals who don’t have access to contribution plans through an employer or those who are looking to supplement an employer-based retirement plan.

The most popular are the Traditional IRA and the Roth IRA. Traditional IRAs offer tax deductions in the year the contribution was made. Roth IRAs allow for tax-free deduction upon retirement. If you expect to be in a higher tax bracket at the time of your retirement, consider a Roth IRA. If you think you’ll be in a lower tax bracket, consider the Traditional IRA.

Health Savings Account (HSA)

HSAs allow workers to manage medical expenses, but because the money rolls over even after you leave the program, they can also be leveraged during retirement. Funds from an HSA can be useful when covering Medicare expenses, paying for out of pocket medical expenses (tax-free), and for long-term care arrangements.

Bottom Line: Get Started & Keep Tabs

Once you start your retirement account, it’s important to stay engaged and monitor it as the years go by. You may find new employment, alternative or supplemental retirement accounts, or simply want to take advantage of other investment opportunities.

If you’re not saving for your retirement, you’re not alone. You can’t change the past, but if you want to make your future easier, take the steps necessary to begin a retirement savings account today.

Andy Kearns is a Content Analyst for LendEDU and works to produce personal finance content to help educate consumers across the globe. When he’s not writing, you can find Andy cheering on the new and improved Lakers, or somewhere on a beach.

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