Most people worry about having enough money in retirement. But you can roll up a substantial nest egg — even if you don’t make a lot of money during your working years.
The keys include learning to budget early in life, sticking with it, saving aggressively during your peak earning years and investing your money wisely and diversely.
“You have to realize that saving for retirement is a marathon and not a sprint,” says certified financial planner Wes Moss, author of You Can Retire Sooner Than You Think.
Some folks are overwhelmed by the idea of trying to save because they have so many expenses, says Lynnette Khalfani-Cox, founder of AskTheMoneyCoach.com and author of Zero Debt. “Sometimes people tell me they can’t afford to save, and I say, ‘You can’t afford not to save.’ ”
Here’s a look at how experts recommend saving for retirement at different ages:
Advice for 20-somethings
Develop healthy financial habits, Khalfani-Cox says. That means learning how to budget and how to spend less than you earn. These healthy habits will put you on the road to saving for retirement later and help you financially throughout your life, she says.
Get out of credit card and/or college debt, Moss says. Once you have a little bit of free money, you should start investing in a 401(k) or other retirement plans, and “start a Roth IRA as soon as humanly possible,” he says.
In an ideal world, Khalfani-Cox would like to see 20-somethings contribute to retirement plans. “The earlier the better, but I don’t think we should beat young people up if they haven’t started.”