How to Get Your Retirement Savings Plan on Track

When you're young, retirement can feel a long way off—until it isn't. Consider this a nudge from your future self: Even if you're in your 20s or 30s, you really need to be saving for retirement now.

Why? Because when it comes to saving and investing, time is your most powerful asset. The younger you are, the more time your money has to benefit from compound growth. Compound growth is when your money earns money, and then those earnings start earning money too. Saving even small amounts consistently can pay off big time down the road. But it only works if you get started.

Sure, there are plenty of reasons to put off saving. I often hear things like "I'll start saving when I'm making real money," "I'll wait until I get a promotion," or "When the kids get out of daycare, I can put money toward retirement."

But here's the problem: there will always be the next expense or milestone to hit, so waiting for that extra money often means waiting indefinitely. Today's bills may feel more urgent, but ignoring the need to save for retirement now only shifts the burden forward. Another reason people might not be saving now could be overconfidence that some future event, like an inheritance, will help you catch up. Maybe you never saw your parents save, or perhaps you simply can't imagine being retired—it's just too many decades away.

The good news is you can start making retirement a priority today. It doesn't have to be overwhelming or complicated. You don't need a perfect plan. And you don't need a lot of money. You just need a starting point.

Knowing how much to save can be a challenge, especially when retirement is years, if not decades, away. Of course, it's different for everyone, and it depends on a lot of personal factors. But there are general guidelines to help you calculate what you should be saving, or already have saved, based on your age and an appropriate multiplier.

For example, if you're 30 and making $100,000, you multiply by 1, meaning you should have $100,000 saved by now. But someone who's 40, making $250,000, should multiply their income by 3 to get a savings estimate of $750,000.

Those numbers may seem overwhelming, but the sooner you start to save and invest, the better your chance of funding retirement. The longer you wait to start saving for retirement, the more of your income you'll need to save per year to catch up.

Here's what you should aim for:

• If you start saving early for retirement in your 20s, aim to save 10% to 15% of your income, including an employee match, per year for retirement.
• If you start in your 30s, you may need to save 15% to 25% of your income, including an employee match, per year for retirement.
• If you start in your 40s, you may need to save 25% to 35% of your salary, including an employee match, per year for retirement.

No matter how much you need to save, the key to making it work is to get started and save consistently.

Take a quick snapshot of your current retirement savings situation. How much have you saved? Where are you saving it? Hopefully, it's in a tax-advantaged account like a 401(k) or an IRA. Another important question is how often and how much you're contributing.

If you're not saving yet, or not saving enough, here are some ideas for how to divert money toward saving.

• Give your future self a raise, not just your lifestyle. When you get a raise or bonus, bump up your retirement contribution first. If the money never hits your checking account, you won't miss it.
• Cancel the stuff you forgot you're paying for. Old streaming services, apps you never use, random memberships—those $10-$20 charges add up quickly and can easily become retirement dollars instead.
• Lower the "big stuff" just a little. Negotiating insurance, switching phone plans, getting a slightly cheaper apartment or having a roommate can free up serious cash without feeling like a sacrifice.
• Put guardrails on fun spending. You don't have to cut fun entirely—just cap it. Or try cooking at home more and eating out less. Whatever's left at the end of the month? Send it straight to retirement before it disappears on impulse buys.
• Treat extra money like it was never yours. Tax refunds, side-hustle income, gifts, and bonuses—decide ahead of time that a chunk goes to retirement, so it doesn't magically get spent.
• Graduate debt payments into retirement savings. Once a credit card or loan is paid off, keep the payment going—but redirect it into your retirement account instead.

Your number one savings goal should be retirement, but of course there are other places you need to direct your money to get in good financial shape. Here's how to prioritize:

1. Contribute enough to your company's retirement plan to get the maximum employer match. Don't leave free money on the table.
2. Pay off your nondeductible, high-interest credit cards.
3. Create an emergency fund to cover three to six months' essential living expenses.
4. Contribute more to tax-advantaged retirement accounts, whether that's your employer plan or an IRA.

While we're talking about priorities, here's another important point. Student loan debt should not take precedence over retirement savings. Rather, make paying off student loans a part of your debt reduction plan, always paying at least the minimum and on time. Consider that payment as a separate line item in your overall budget—and don't let it impact your retirement savings.

To make the most of your money, don't just save—invest. You don't want to take risks when you're saving for a short-term goal, but when you're striving to meet a goal that's five or more years in the future—and retirement may be way in the future—be sure to take advantage of the growth potential of the stock market.

First, check in with your personal risk tolerance. Understand that risk is a part of investing, and risk and return go hand in hand. How much risk you're comfortable taking depends on your personality and your time frame. A broad-based stock mutual fund or exchange-traded fund could be a good way to get started. A low-cost target-date fund can also be a good starting point. Each of these investment types could help you diversify, so you're not putting all your eggs in one basket.

If you're contributing to a 401(k), the money automatically comes out of your paycheck, so that makes it easy. You can make it even better by setting up a 1% increase to your contribution whenever you get a raise. If you're saving in an IRA, set up an automatic contribution from your checking account so you won't have to think about it. Automating contributions helps you stay on track. Just set it, review it, and move on with life.

It's never too early to start planning for retirement, and it's rarely too late. Small, consistent actions—increasing a contribution by 1%, scheduling a conversation with a financial planner, defining what retirement actually looks like to you—can create meaningful change over time.

The power of compound growth works best when you start early, but it still works when you start today. The best time to start saving may have been years ago. The second-best time is now.