This post is featured on behalf of Eliza Picot.


Preparing for retirement in your 20s may feel like an unnecessary burden, but it’s essential to think about your financial health later down the road. Not sure where to start? Follow these simple steps to plan for your future. You’ll thank yourself later!

Start Saving Today

It’s so basic, yet so few of us do it. Don’t let expenses become an excuse. You should be saving at least 10% of your income every month. If you’re new to saving and that number makes you cringe, start by committing to small goals: set 100 dollars a month aside. You can increase your savings as your income grows. Every little bit helps!

Multiply Your Incomes

Take on a side hustle, like renting out your guest room, working a weekend gig, or tutoring your neighbor’s kid. You’ll find something!

It won’t take up all your energy, but it will increase your available funds. Also, demand raises as you move through your 20s. Keep in mind that you should expect to double your salary as you progress in your career.

Get That 401(k)

You know the one. It’s the fine print you skipped over when skimming your employment contract because you didn’t feel like it concerned you.

News flash: the 401(k) does concern you and it’s a big deal. In a nutshell, you choose how much of your pay check you want to put aside, and your employer saves it as a retirement fund. Think of it like a savings account that you don’t have to actively add money to.

Get an IRA

If a 401(k) is not made available to you, do not panic. Your employer may not offer it, in which case your best option is to set up a low fee IRA.

Like the 401(k), an IRA is a savings account of sorts. But while both retirement plans provide tax breaks, they are different when it comes to the source of the funds invested. An IRA has no ties to your employer.

Create an Emergency Fund

Don’t rely on the magic wand that is your credit card—even for emergencies. Credit is another word for debt, so if it helps to call it a debt card, do it. Unpaid credit card payments ruin your credit score. Poor credit shatters your financial credibility, which shuts the door on loans you may need in the future. If that’s not enough to deter you from irresponsible spending, know that your retirement fund will also suffer from the cycle of bad credit.

There are only so many ways to say the same thing: start saving now. Invest in a fund reserved for emergencies and emergencies only, like car repair or unexpected health expenses. Best of all, financing an emergency fund will keep you from dipping into that retirement money, which you do not want to touch because of how heavily withdrawals are taxed.

Set a Budget

No matter how many times your mom has urged you to curb your spending, the only way to get a hold on your finances is to stick to a budget. Spending less is difficult when you’re operating in a vacuum.

On the other hand, having a simple budget lets you visually frame what you spend and save. Match that with tracking your habits for a month or two. Before you know it, you’ll find obvious ways to save money that you’ll happily funnel into the retirement savings account of your choice. Genius, yet so simple.

Don’t Let That Debt Bring You Down

Clear your debt as quickly as you can. Paying it off on time will improve your credit score, making it easier to get loans in your 30s, when you may need them more than you do now. Spoiler alert: you’ll probably be looking to settle down one day and need the extra cash to do so. Needless to say, interest rates are money traps. However much you’re paying in interest right now could be bulking up your savings, so get to work on paying off all those untouched bills.

In the end, it’s all about how you choose to handle your money. Control your spending by shopping more economically, like giving thrift stores a chance or dropping that useless subscription to cable. Find out what you actually need and adapt your lifestyle to match the funds you actually have available, not the funds you wish you had. Bottom line: set up your retirement fund today and you’ll have retirement fun tomorrow.


 By Eliza Picot

After relocating from the East Coast, Eliza made a new home in Denver where she received a degree in finance. Her love for mystery thrillers is only outweighed by a desire to pick up a pen and craft her own work. Coupled with her education and years of experience in bookkeeping, Eliza’s niche offers readers useful money-saving tips and creative ways to better manage finances. Her success has landed her work in major publications and has warranted esteemed recognition amongst elite finance bloggers. Growing up in culturally-rich Massachusetts, and spending so much time as a child reveling in Victorian architecture, Eliza developed an interest in interior design at a young age. She continues to pursue this hobby when she’s not writing about tax codes, IRAs, and Real Estate Investment Trusts, and has garnered a massive Pinterest following with her whimsical inspirations.

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