Retirement Planning in Your Thirties

When you’re thirty, you still feel like you have lots of time to deal with life’s challenges, and it’s very likely that the last thing you’re thinking about is retirement. But if you want to get ahead of the curve, this is actually the best time to start.

The truth is that you really should start right now if you plan to accumulate enough to keep you secure after you retire. It will take you many years to build a nice nest egg, and this becomes more difficult to do the older you are and the longer you wait.

One of the great things about starting retirement planning around age 30 is that you may have more flexibility than someone older. At age 30, you may still be living in a modest home with a small family – or even still be single. These are more favorable circumstances for starting to make a financial plan than someone who has a larger home, older kids maybe even in private school or college.

The other benefit that 30-somethings have is time. If you start early, you have time to build. You also have time recover in the event your investments don’t go the way you planned. If the stock market takes a hit when you are 35, you have another 20+ years for those investments to recover. But for someone in their 40s or 50s, a big stock market hit can be a disaster to their retirement plans.

How to start

If you work for an employer that offers benefit packages, there is a good chance they may offer a 401(k) with some form of employer match. If so, it would be wise for you to begin contributing the maximum amount possible right away. While you think you will miss the money in your paycheck, the truth is that you will adjust quickly because this money is taken out before it is deposited into your account.

Now, one of the issues in today’s job market is stability – meaning the 30-something generation isn’t staying at one job as long as they used to. And often times, you will need to stay with an employer for a designated amount of time in order to be considered as “vested” – meaning you get the benefit of things like employer matched contributions to a 401k. Depending on the amount you accrue, this may be a major decision factor in whether or not to keep your job when another opportunity presents itself.

The real estate option

When you are ready to begin investing, you should look at the best options for long-term planning. This could include the traditional choice of real estate, or you might want to invest in commodities such as oil or gold. Be sure you understand everything involved in investing before you start spending money.

With real estate, the wisest thing to do is find something in a growing neighborhood and just hold onto it. Rental properties hold potential risks such as repairs and months where you may not have a renter. For cash flow, you might consider becoming a landlord, though you must be prepared for the work this entails. If you can plan adequately, you will be able to keep your tenants happy while collecting plenty of money each month. The important thing to remember is that you should charge enough rent to cover maintenance. Many new landlords learn this the hard way.

So it’s probably best to start with something you can manage before jumping into investment properties too soon – which could actually hurt your retirement by causing you to divert cash from savings to pay for unforeseen expenses.

With money in a retirement fund, long-term investments made, and property for rental in place, there is no reason you can’t start an excellent retirement plan. Just remember that you’re still young, and there is plenty of time to continue saving. Keep working with your financial advisor at a steady pace, and don’t take failure to heart. You can overcome and build a wonderful future for your family.

If you are ready to start investment planning for your future, it’s a good idea to find a local financial advisor who can help you make these important decisions. No matter where you live, you should be able to find someone that you can work with who will take the time to understand your objectives, and help you craft a plan that makes sense for you.