Three Things to Know About Starting to Save For Retirement in Your 30s
At 30 years old, your retirement may still be thirty years off. Just because your retirement is decades away, doesn't mean that you shouldn't be thinking seriously about your retirement. Retirement funds are not about saving cold hard cash; they are about investing your cash and allowing it to slowly grow for you over time so that you are taken care of when you are old and retire.
Don't Freak Out If You Don't Have Any Savings
If you are in your early 30s and don't have any savings, do not worry or freak out. Although some people start saving for retirement in their 20s and early 30s, many don't even start the process until they are in their 30s. All the special blogs and articles out there about individuals who retire from the workforce in their early 30s can create unrealistic retirement savings goals.
It's fine if you have not started saving yet or don't have big savings. If you don't have a retirement savings yet, now is the time to start.
Retirement Savings Is Made of Many Pieces
Next, it is important to realize that your retirement savings is made out of multiple pieces and should not just be one account.
Your retirement savings should be a collection of savings and investments. You should have a cash savings fund that you can easily access at any time. You should have a traditional 401(k) or 403(b) retirement account via your employer. You can also set-up an IRA account with after-tax contributions.
Your retirement savings can be even more extensive. You can invest in stocks, bonds, and real estate outside of your official retirement accounts.
It is important to understand that your retirement savings are actually a retirement portfolio compromised of various investments and sources of income that will support you as you age.
Start Simple and Build from There
If you don't have retirement savings at all, you don't have to get all the pieces in place all at once. Start simple. If your workplace has a retirement plan that you can participate in, sign up and start contributing part of your paycheck, before taxes, to your retirement account.
After that, start working on building up cash savings. Even if you have debt, it is important to build up cash savings so when unexpected expenses come up, you don't have to get into more debt to take care of these expenses.
If you are in your 30s, it is time to start slowly building your retirement savings. Start by investing in an employer retirement plan and building your savings. Then, work on expanding with an IRA account. By the time you hit your 40s, start working on outside investments. For more information, contact a firm that offers financial planning as one of their services.