<\/p>\n
Klaus Vedfelt \/ Getty Images<\/p>\n
Though it can be tough to save when you’re in your 20s and early 30s, you have one thing on your side: time. <\/p>\n
Only about half of Americans under 35 had money in retirement accounts in 2022, according to the latest data available.<\/p>\n
Among young adults who do have retirement accounts, the median balance was $18,800.<\/p>\n
Time is younger savers\u2019 biggest advantage, since even modest early contributions can compound significantly for decades.<\/p>\n
If you’re in your 20s or early 30s, you may not be thinking much about retirement. Only about half of U.S. households with a reference person under age 35 had any money in retirement accounts in 2022, according to the latest available data from the Federal Reserve<\/a>\u2019s Survey of Consumer Finances. That makes young adults the working-age group that’s the least likely to have dedicated retirement savings. This makes sense, of course: fin your 20s and 30s, your career is just starting (or you may be in school), so in many cases, your income and net worth<\/a> are low.<\/p>\n And while only half of young people have retirement accounts, that may be changing. The survey found that this age group\u2019s participation rate is growing\u2014it’s continually increased over the last decade.<\/p>\n If you do manage to contribute to a retirement account at this age, you’re maximizing one key advantage: time.<\/p>\n \u201cA dollar saved at 25 is worth perhaps four or five at 55, not because of some magical formula, but because it gets 40 years to quietly compound<\/a> while you’re busy doing other things,\u201d said Eric Ludwig, PhD, CFP, RICP and director of the Center for Retirement Income at The American College of Financial Services. \u201cThe tragedy isn’t starting with little; it’s waiting.\u201d<\/p>\n Early adulthood can make saving feel hard, but time is still on your side. Even if you can’t contribute much\u2014even $30 a month (a dollar a day)\u2014that money doesn’t just add up. It compounds.<\/p>\n For those ages 18\u201334 who reported having retirement accounts in 2022, the median<\/a> balance was $18,800. Not surprisingly, that figure is significantly lower than the balances reported by older age groups\u2014but it’s not nothing. For many, it’s a significant sum.<\/p>\n At this stage of life, your priority should be simply building the habit of saving for retirement, Ludwig said.<\/p>\n \u201cA reasonable early benchmark is working toward roughly one year of core living expenses saved by the early-to-mid 30s, recognizing that debt repayment<\/a> and housing costs<\/a> compete heavily for cash flow<\/a>.\u201d<\/p>\n The median is the midpoint, meaning half of the group has more saved and half has less saved. Using the median instead of an average reduces the skewing impact of unusually high or low balances, which gives a more accurate representation of the typical individual.<\/p>\n","protected":false},"excerpt":{"rendered":"Klaus Vedfelt \/ Getty Images Though it can be tough to save when you’re in your 20s and…\n","protected":false},"author":2,"featured_media":224834,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[114,268,85,46,266,267,688,6300],"class_list":{"0":"post-224833","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-il","11":"tag-israel","12":"tag-personal-finance","13":"tag-personalfinance","14":"tag-retirement","15":"tag-retirement-savings"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/224833","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=224833"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/224833\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/224834"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=224833"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=224833"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=224833"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} <\/p>\n
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