Retirement Mindset as You Make Your Way through Your 20s, 30s, 40s and 50s

Every young adult feels like retirement is a lifetime away, but it approaches much more rapidly as you age. The key to creating a sizeable nest egg is starting early. Keeping retirement in mind with a few simple steps through each stage of your life will help you create a retirement fund that will keep you living comfortable into your 60s and beyond.


Securing your company’s full 401 (k) match program is one of the smartest money decisions you can make in your 20s. When you enroll in a matching savings program by age 25, you greatly reduce the amount you need to save on your own by up to 50% less than you would need to save if you wait until your 30s. During your 20s, you should also ask for a $5,000 raise to help increase your earnings by over $600,000 throughout your career. Studies suggest that the highest raises are awarded between ages 25 and 35, making this an optimal time to obtain a large raise.


One of the best retirement decisions to make in your 30s is to stop accruing debt. Pay out of pocket whenever possible and pay off old debts with any bonuses, overtime pay and tax returns. Avoid extravagant spending, from dining out to purchasing high end leisure items, whenever possible, only splurging once in a while. Adopting a frugal lifestyle at this age can help you maintain frugal habits in retirement as well as curb your spending to help you save even more money in the long run.


Although mastering a new skill does not sound like part of a retirement mindset, consider the fact that women tend to reach their peak pay by age 39 while men reach theirs by age 48. Making yourself invaluable with a greater skill set not only provides you with more job security to keep filling your retirement account, but also with potential new opportunities based on that skill set. As young children grow up and move out of the house, it is also a good idea to move monies typically spent on their expenses into retirement savings, when applicable.


Catching up your savings to account for any wide gaps is a good strategy in your 50s. At this point in your life, you should have paid off most, if not all, of your debt, from student loans to mortgages, which frees up your income to be deposited into your savings account. Use your extra cash to add a few thousand dollars into your 401(k) and IRA accounts each month to give your savings a steady bulking up during this decade. Ten years from retirement, consider using a Roth account to help you save a higher, tax-free amount of money for retirement.

Remember that one key to saving well is to make it as easy as possible. Set up automatic contributions to your savings whenever possible so you do not even notice any money your check is missing while you make the process easier on yourself. Make a budget and stick to it to wisely manage your money throughout your life and into retirement.