How to Start Investing for Retirement in Your 20s and 30s
Retirement can feel abstract in your 20s and 30s — it's decades away, and there always seems to be a more urgent use for your money right now. But this is also the exact window when your money has the most time to grow, which makes it the highest-leverage time to start, even with small amounts.
Why Time in the Market Beats Timing the Market
Compound growth rewards time more than it rewards perfect timing. Someone who invests $300 a month starting at age 25 will typically end up with substantially more at retirement than someone who invests $500 a month starting at 35 — even though they contributed less overall — simply because their money had ten extra years to compound. You can see this effect directly using the compound interest calculator.
Which Accounts to Use First
A common, sensible order is: first, contribute enough to your employer's 401(k) to get the full company match, since that's an immediate, guaranteed return on your money. Next, consider a Roth IRA if you're eligible, which grows tax-free and gives you more investment choices than most 401(k) plans. After that, circle back to maxing out your 401(k), and finally consider a regular taxable brokerage account for anything beyond that.
How Much Should You Save?
A frequently cited target is saving 10-15% of your income for retirement, starting as early as possible. The exact number depends on your desired retirement age, expected expenses, and how much you've already saved. The retirement calculator lets you plug in your current age, savings, and monthly contribution to see a projected nest egg at retirement, along with an estimated monthly income based on the common "4% rule."
Picking Investments Without Overthinking It
You don't need to pick individual stocks to invest well. Low-cost, diversified index funds that track the broader stock market are a reasonable default for most long-term retirement investors, and they remove much of the guesswork and emotion from investing. What matters far more than fund selection is consistency — contributing regularly regardless of what the market is doing.
Run Your Own Numbers
Use the retirement calculator to project your savings at retirement, the compound interest calculator to see how different contribution amounts and timelines change your growth, and the investment calculator to check what your projected balance is worth in today's dollars after accounting for inflation.