The Retirement Goals Everyone Should Hit in Their 20’s


Finding ways to save for retirement in your twenties can be difficult when you’re consumed with repaying student loans and simply “getting by”. Still, research shows that Millennials are keeping pace — and sometimes surpassing — older generations when it comes to retirement savings. This suggests eventual retirement is more than just a lofty goal young people wish to accomplish.

There are a few necessary steps you’ll want to take in your twenties to ensure you’re prepared for the future. And when the opportunity arises to get a jump start on your retirement savings, you should take every step to maximize your efforts even if you’re working with a tight budget.

Saving for the future starts now. These retirement goals — let’s consider them retirement commandments — are non-negotiable.


But first

Investing in your future retirement is imperative, but first, you must be financially sound.

1. Make some money … any money

To state the obvious, you need to make money to save money. It’s best to find a job that allows you to earn enough money to sock a portion of it away. But it’s important to understand your first job will likely only be a means to an end. Let’s face it: You probably won’t like your first job, and it definitely won’t be your last. But try to make the best of it by viewing it as a stepping stone to the future and a way to establish important retirement goals.

2. Develop a savings habit

You can make all the money in the world, but if you aren’t primed to save on a consistent basis, no amount of investing know-how will help you. Start by opening both a checking and savings account to house your earnings.

Then, establish a budget that prioritizes retirement. Analyze your daily living expenses and factor in long-term savings goals to figure out how to slice up your total income. With an overarching view of where your money is going, you’ll see how much you’re overspending and under saving on discretionary items like take-out food and Amazon Prime.

A responsible savings habit doesn’t mean tying up the purse strings completely. Picturing your future self can help put you in a money-saving mindset that balances your needs, wants, and goals.


Retirement in Your Twenties 101

Once you’ve got funds available to invest, it’s time to begin taking actionable steps toward securing a healthy retirement. The sooner you start saving the better.

3. Make your 401(k) contributions automatic

Making small, regular investments in your 20’s is the key to securing significant savings. Double down on savings by putting your contributions on autopilot. In other words, automate your 401(k) contributions and max out your employer contributions to get the most bang for your buck.

Many employers will match 50 percent — or 100 percent if you’re lucky — of your contributions, so failing to contribute even just a few dollars a month to your personal fund is like throwing away free money.

Young people have time on their side when it comes to fattening their retirement nest egg. Thanks to compounding interest, a 25-year-old who contributes $100 a month will have just over $349,000 by the time they turn 65, assuming an 8% return.

4. Increase contributions when you can

The next retirement goal you should keep in your twenties is to boost your retirement savings when you can. But other obligations such as student loans and the fact that you like to eat often gets in the way of such fiscal responsibility. Use annual raises, bonuses, and passive side gigs, as extra income to increase the amount you save.

Ideally, you should aim to save 10 to 15 percent of your annual salary to ensure a comfortable retirement. A general guide to retirement contributions by age is:

  • Age 25: 10 to 15 percent of your annual income saved
  • Age 30: The equivalent of your annual salary saved
  • Age 35: Two times your annual salary saved
  • Age 45: Four times your annual salary saved
  • Age 65: Eight times your annual salary saved

5. Open an Individual Retirement Account

If your employer lacks company-provided investment opportunities or you are a freelancing business owner responsible for your own retirement portfolio, there are other individual retirement accounts (IRAs) that come in handy. Both traditional and Roth IRA’s offer lasting tax benefits is considered a low-cost investment option. Here are a number of IRA providers that can help you get started.

6. Ask for a raise

What you earn in your twenties will have the greatest impact on your long-term wealth. A pay increase of just $5,000 in your mid-twenties can add up to hundreds of thousands more in lifetime earnings. One of the ways you can accomplish your retirement goals is to campaign for a raise.

Don’t wait for your annual review to speak up. You can — and should — inquire about a pay raise after you’ve contributed a major project or initiative to better your chances.

7. Emergency Fund

In addition to hoarding for retirement, people in their twenties must consider a back-up savings plan like an emergency fund. An emergency fund is just like it sounds — a way to pay for life’s unexpected emergencies.

Try to stash at least three to six months of expenses away in a savings account for the dreary, rainy days. If you need around $2,000 per month to cover all necessary bills, then aim to save $6,000 to $8,000 in your emergency fund. When the HVAC finally dies or your car’s radiator blows up, you’ll need a way to fund those expenses without going into debt or asking your parents for a loan.


Long gone are the days young people can remain blissfully unaware about the need to save for the future. Strive to reach at least a few of these retirement goals in your twenties and your future self will thank you.

About The Author

Lauren Hamer

Lauren is the brains behind CaPABLE…and Beyond, founder of LaunchPoint Resume, Cerebral Palsy have-er, and constant chaser of the ‘good life’. Money and Career writer at The Cheat Sheet and occasional freelancer for career, money, and organizational development topics.