Retirement can feel distant when you’re in your 20s, juggling student loans, rent payments, and the early stages of your career. Yet the decisions you make today can profoundly shape your financial security decades from now. This guide offers young investors key tips for retirement planning, even if it seems distant.

Start with a Target, Even if It Changes

The first step is surprisingly simple: pick a retirement age. While 65 has traditionally been the standard, today’s young professionals should think differently. Medical advances could mean younger generations will likely live longer than any before it, which has two important implications: you’ll need more savings to fund a longer retirement, and you may need to work longer than previous generations.

A realistic target for someone in their 20s today might be the early 70s, around age 72. This isn’t set in stone, and you can always adjust as circumstances change, but having that finish line gives you something concrete to plan toward.

Build the Habit of Saving

When you’re earning entry-level wages and facing mounting expenses, retirement savings can feel impossible. But the actual dollar amount matters less than establishing the discipline. Whether it’s $5 or $50 per month, create a habit of setting something aside consistently when you’re young.

One powerful way to do this is to pay yourself first. Treat your savings like a non-negotiable bill. Transfer money into your retirement or savings account before you spend on anything else. Automating this process can ensure that saving becomes a priority rather than an afterthought.

This early discipline serves you in two ways. First, it becomes automatic. It is a built-in behavior that grows in proportion to your income. Second, it leverages one of the most powerful forces in finance: compounding. Because you’ll potentially work and save longer than any generation before you, compounding can work more powerfully in your favor, turning modest early contributions into substantial long-term growth.

Capture Free Money

If your employer offers a 401(k) with matching contributions, prioritize getting the full match. This is free money that you won’t find anywhere else. Ensure you’re capturing every dollar your employer is willing to contribute to your retirement as you start saving for retirement.

Choose the Right Accounts

Once you’re maximizing your employer match, consider where additional savings should go. A Roth IRA is an excellent option for young savers, allowing your money to grow tax-free over the decades ahead. However, don’t neglect other savings goals in your quest to fund retirement. Building an emergency fund is also important. Having three to six months of expenses set aside protects you when unexpected costs arise, preventing you from derailing your long-term plans for short-term needs.

Create a Relationship with Your Future Self

One of the most unique pieces of advice for young savers is to create a relationship with your future self. It is important to envision yourself decades in the future and to think about what may be important to him/her at that time.

Ask yourself thought-provoking questions: How do you want your retirement to look and feel? How do you want your future spouse to view you financially? What kind of example do you want to set for your children and grandchildren? Beyond your immediate family, what causes, organizations, or communities do you want to support?

Creating this emotional connection with your future self transforms retirement from an abstract concept into a real person you’re helping, someone who deserves your consideration and care today.

Understand What You’re Up Against

Today’s young professionals face unique challenges. You’re the most indebted generation in history, carrying student loans, credit card balances, and other financial burdens that previous generations didn’t face to the same degree. This makes learning to manage debt just as important as building assets.

You’ll also navigate a changing landscape of retirement benefits. Social Security will likely look different by the time you retire. Employer retirement plans will evolve. The types of accounts available to you—traditional IRAs, Roth IRAs, 401(k)s, and whatever comes next—will continue to change over the decades ahead. Stay informed about these tools and how to use them effectively.

Have a Plan and Follow It

Even though your finances are relatively simple in your 20s, it is a good idea to create a plan. This doesn’t have to be complicated. Sitting down with a financial planner for an hour can be enough to get started. The key is having something you can follow and measure. Check in monthly, quarterly, or yearly to see how you’re tracking against your goals.

Retirement success isn’t complicated, but it requires consistency. Every financial choice you make will either add to or subtract from your quality of life in retirement. The decisions might seem small now – skipping that employer match, putting off savings for another year, accumulating unnecessary debt – but they compound just like your investments do, for better or worse.

The Bottom Line

Planning for retirement in your 20s requires looking beyond immediate pressures to imagine a distant future. Start with small, consistent savings. Capture every dollar of employer matching. Build the discipline that will serve you throughout your career. And most importantly, remember that you’re not just saving for an abstract concept called “retirement.” You’re taking care of a real person who will one day depend on the choices you make today.

The power of time is on your side, but only if you start now.

Please contact our team if you have any questions. Thank you for reading! 

The Trademark Capital® Team

This material is intended for informational purposes only and should not be construed as legal, accounting, tax, investment, or other professional advice. Trademark Capital’s investment strategies are built using quantitative, proprietary algorithms that are designed to identify and react to changing market conditions. However, investors should be aware that no investment strategy or risk management technique can guarantee returns or eliminate risk in any given market environment. As with all investments, Trademark Capital Management’s investment strategies are subject to risk and may lose money. The investment strategies presented are not appropriate for every investor and individual clients should review with their financial advisors the terms and conditions and risk involved with specific products or services. Due to our active risk management, our managed portfolios may underperform during bull markets. Past performance is no guarantee of future results.