Each age comes with different life obstacles and expenses that can often derail a good savings plan. So, in this article, we will walk you through how best to save at different points in your life. It may feel like your nest egg is growing too slowly, but time and perseverance can get you where you want to be.

Did you know only 55% of retiring Baby Boomers have saved for retirement, and of those, the majority have under $250,000?^[i] That leaves very little cushion for unforeseen expenses considering you may well live at least three decades during retirement years, it’s good to plan ahead.

One of the best ways to continue to save is to set up small goal markers to help you feel that you are making progress along the way. Hitting the small goals can keep your stamina up, especially when finances are tough or when something comes along that derails your plan.

Goals by Age

Early 20s

If you are in your early twenties, there is a good chance that you are a recent college graduate, with some debt, and that you are in an entry-level position. Rent and basic living expenses are probably eating up the bulk of your paycheck, leaving you little to save.

1. You should work toward having a fully-funded emergency fund. This emergency fund will help to cover any unforeseen and unexpected expenses. Save enough to pay for your living expenses for at least three months. It is often an emergency that wipes out a savings account, so saving for this first, will make a difference.
2. Next step is getting proper health insurance, investing in your health early on will have huge ripples down the line. Regular exercise and checkups, dental exams, etc. are just as important as your bank balance.
3. Lastly, this is the time to take advantage of any employer offered 401(k) plan or employer match programs. Make the contributions big enough to receive the maximum matching from your employer and follow the out of sight/ out of mind method, a little is taken out each paycheck and socked away to grow. The earlier you start, the longer your investments have to grow. While your income is still relatively low, consider choosing Roth 401(k) contributions instead of pre-tax contributions. If you can save more, save and invest it in a Roth IRA account.

Early 30s

In your thirties, you have been working for some time, ideally, you have moved up in wages. You may now be married, or have a family, or are looking to buy a home. The twenties were about finding stability, the thirties have to now be about looking further ahead. The first order of business is getting rid of your debt especially student loans and credit cards. These are, typically, high interest, aggressive debts, that will only grow the longer you pay the minimums. It may be time to seek outside help, like speaking to a debt specialist or using an online program. If you are thinking about buying a house, you will also want to be saving for a down payment. Ideally, you want to have 10-20% to put down. If you have children, setting up 529 plans to help save for their education may also be helpful, as that money grows tax-free and is earmarked specifically for schooling. This is also the time to draft up a will and get a life insurance policy, especially if you have dependents. By this time, you should also be saving 10-15% of your annual income.