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As you get older, you may feel the pressure more to save for retirement. Is it too late to start in your 30s?
When you first start working in your teens or your 20s, you may not think much about saving for retirement. It’s so far away. Like you really need to worry about it at the moment.
Then you hit your 30s. You realize that you have about 20 to 30 years to work, depending on when you want to retire. As you look at the state pension, you realize that it’s not all that much. You’ll barely be able to keep a roof over your head. You need to save for retirement yourself.
Now you worry that it’s too late and that you’ll never be able to retire. What are your options in your 30s?
It’s never too late to save for retirement
The honest answer is that it’s not too late to save for retirement. You can put some money away in your 30s. What you really need to do is make sure that you put enough away.
It’s worth using a savings calculator designed for retirement. You want to factor in inflation rates, and you want to think about how far into the future you want to retire. Will you retire at 50 or will you wait until you’re 70?
Think about how much you want to have based on what you have now. Many calculators recommend that you have at least 80% of what you make now, but that’s assuming you own your home and you won’t have a mortgage when you retire. That’s not always the case. I have mine set to have 100% of my income now.
Once you have all the information in place, you can work out how much you’ll need a save each month.
You can play around with the savings calculator
Can’t make the monthly goal just yet? That’s okay. Saving something right now is better than nothing. The sooner you start, the less you’ll have to make up later.
I should save about $1,000 per month for retirement. I couldn’t do that on a single income while waiting for my second business to grow, so I stuck to $500 per month to start with. As I get more income, I’ll put more into my retirement savings.
I played around with the calculator to see what my options were. I also know that I’ll still have some income coming in during retirement. I don’t think I’ll actually completely retire unless there’s a reason I can’t write or help my financial clients anymore. So, I’ll have some income each month from that to help with the bit that I can’t save up now.
Get the right investment option for you
You don’t want to save for retirement by putting money under the mattress. Nor do you want to just put it in a savings account with the bank. It’s important to have the right investment vehicle.
This is where you want to talk to someone with experience. While you can do investments yourself, there is the risk of losing it all. You may put your money into the wrong stock, or you may not take it out of a stock fast enough to get the best money. Are you really going to keep track of the daily changes to the market?
There are experts who do all of that for you. I took the time to look at the different mutual funds available for my own investments and saw who runs those funds. I trust them to make the best decisions to ensure I get a good rate of return. And yes, I have changed who my mutual funds are with now and again. One company wasn’t serving me in the best way it could, so I went to someone else who could.
You may consider hiring a 401k advisor to help you choose the right investment options for the time frame that you have. You have more time in your 30s than you will in your 50s, so you can go for slightly more higher risk funds. As you get closer to retirement, a good investment advisor will talk to you about changing your options. You may even collect rare and antique coins that you can eventually sell to a rare coin buyer.
30 isn’t too late to start saving for retirement. Get in touch with me today to see if I can help you get started.