How to save for retirement in your thirties

If you’re in your thirties, your life is likely wrought with financial obligations. Many people in this age group have the costs of weddings, mortgages, and young children to budget for, and it often overshadows that looming, far-off, ultimate goal: retirement.

The thirties are a blessing and a curse when it comes to retirement saving. You’re likely earning more than you did in your twenties, but you also have the aforementioned conflicting priorities that make up a good portion of your budget. It can be a challenge to figure out where your dollars should go.

Not to worry. When you’re in your thirties, you can get yourself on the path to retirement readiness by asking yourself a few key questions to get started.

How much do I need to retire? 

Experts cite that individuals need anywhere from 50 to 80 percent of pre-retirement income per year to live off during their golden years. The actual number is up to you to decide based on your lifestyle and your financial obligations.

When it comes to living expenses, the plus side is that the priorities that exist in your thirties such as a mortgage and childcare costs should no longer be line items once you hit retirement. Assuming that’s true, a typical thirty-something could live on significantly less than their current income level.

To get started planning your retirement, it’s absolutely essential that you have an idea of how much you will need. There are a number of retirement savings calculators out there that can help you do the math.

Thanks to compound interest, the good news is that you have up to 35 years to save (assuming you retire at 65), so if you start now, you’re in a good position to accumulate a substantial amount. 

How do I start without delaying other priorities? 

Here’s the tricky part. If you have mortgage payments, daycare costs, education savings costs and/or any debt outside of your mortgage, you might not feel like you have enough to sock away for retirement. This doesn’t have to be the case. There are a few measures you can take to ensure you get started – even if it’s slowly.

  • Take advantage of your workplace retirement plan. If there’s a matching component, be sure to choose the maximum level of contribution to get the most ‘free money’ out of your employer.
  • Like with any bill, treat your retirement savings as an obligation and automate it to leave your account on a set date monthly or biweekly. If you time this with your paychecks, it will simply feel like you took a small pay cut.
  • If you don’t feel like there’s any room to take that pay cut, look at where you can trim your expenses or make extra money. In doing so, the extra cash you find can be put away for retirement saving. 

Where should I park my cash? 

Saving for retirement could mean putting money into a savings account or it could mean investing it. As someone in your thirties, time is on your side. With a longer time horizon, your ability to take on risk and ride out any fluctuations in the stock market is higher than someone much older. This gives you a variety of options for investing and the opportunity to grow your funds over the long term. Speaking to an expert is often a good way to start the discussion and develop a retirement plan.

No matter how you decide to save for retirement, the trick is to start. Develop a plan, find room in your budget and invest in a way that works for you. Retirement planning doesn’t have to be a chore. Taking the time to outline your goals in your 30s will mean peace of mind in your 60s, 70s and beyond.

Also read: 5 steps to developing a retirement plan in your twenties.


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Pira Kumarasamy

Pira Kumarasamy is a Toronto-based freelance writer and communications consultant in the financial space. She has a background in economics and enjoys making complex financial topics relatable to the average Canadian. Her areas of interest include financial markets, student loans and real estate. You can reach her on Twitter (@PiraKumarasamy) or LinkedIn.