The average retirement savings for those between 32 and 61 years of age is $60,000. Retirement seems to be a lifetime away for millennials, but saving for retirement should begin early. Some studies even suggest that saving an amount that is double your salary by age 35 is the recommended start. This could be alarming to many millennials, who are still paying massive school loans and other debt. It leads to questions about how to prepare to invest and when to start.

When to start?

  • Start as early as possible.

Understanding the way compounding works over extended periods of time is useful for determining when to begin an investment. With average market growth, investing $100 per month ($1,200/year) for 40 years, can leave one with close to $1.1 million. The sooner a retirement fund starts, the larger the sum of money that builds over time.

  • You have 30 years in your 30s.

Those in their thirties have around 30 years to grow their nest egg for retirement. With a jump-start on a portfolio, you have time to invest more aggressively. The following chart shows the ideal amounts of money to be saved by each age.

35 40 50 60 65
2x salary 3x salary 4x salary 6x salary 8x salary


How do I get ready to invest?

  • Paying student loans.

Student loan payments can be a burden on savings. Paying the monthly balance while putting extra cash toward high interest loans can help finish off this debt.

  • Purchasing a starter home.

The median age to buy a home is 33. Taking time to gain financial footing before buying a home is becoming much more common, as the median age continues to rise. It is never too early to get ahead of the game and hold a home as an asset.

  • Save it before you ever see it.

Saving small amounts of paychecks before it ever reaches your hand is a great way to feel like you’re not coming up short. Living 10%-15% below your means, and investing that money before you see it, can enhance your preparedness for the future.

  • Learn your risk tolerance.

Having a plan and understanding your risk tolerance are essential parts of investing. Know if investing more aggressively or passively satisfies your risk tolerance better, and make a plan for retirement investments following that information.

With 28% of working adults claiming they have zero retirement savings, it is important to understand the fundamentals and opportunity of starting retirement investment early. Starting as soon as possible with a plan of action is essential, and can put you ahead of the crowd in savings. I encourage you to call Asset Planning Group, LLC at 814.536.1040 with any questions or concerns about retirement saving and the effects of not saving enough.