In your 30s when your career just feels like it is taking off, it can be difficult to think about saving for your retirement. However, your 30s is exactly when you should be devoting more resources to your retirement. This is the perfect time to start savings for your retirement and building to take care of your future.
Work to Max Out Your 401(k) Contributions
This is not going to happen overnight, but you should work hard to increase your 401(k) savings so that by the end of your 30s, you are maxing out what you can contribute to your 401(k) savings.
The first thing you should do is make sure that you are putting aside enough money to qualify for the 401(k) match if your company offers one. For example, many companies requires you to set aside two to four percent of your income before they will match what you put aside. If you are putting aside 4% of your income, and your employee is matching that contribution, you are actually putting aside 8% of your income.
One of the best ways to get to the point of maxing out your retirement contributions is to gradually increase the amount that you are savings and to increase the amount that you save each time you get a raise. This can help you reach the point where you are maxing out your retirement savings each year.
Open an IRA Account
In addition to a 401(k), you are also legally allowed to have an IRA account. The amount you can contribute changes over time, but right now you can contribute $5,500 per year to your Roth IRA account.
These contributions are made after-taxes, but no taxes are put on the growth of your money. $5,500 per year may not seem like that much, but if you do this every year that you work, you'll end up with a nice retirement fund from your IRA contributions.
Invest in Life Insurance
Next, invest in a life insurance policy. If you invest in a while life insurance policy, you can actually borrow against the policy after you have paid a certain amount into the policy, making a whole life insurance policy a smart part of your retirement plan.
Build Up Your Emergency Savings
It is always good to have money in retirement accounts, stocks, and brokerage accounts. However, it is equally important to have access to cash to get you through emergencies. At the start of your 30s, you should have an emergency fund that would cover at least three months' worth of expenses should you lose your job. As you make your way through your 30s, you are going to want to build up that emergency savings. For example, you could set a goal to increase your emergency savings to cover one additional month's worth of expenses, so by the time you exit your 30s, your emergency fund would cover you for over a year if you were not able to work.
Your 30s may be when your career is taking off, but it is exactly when you should be working to make sure that you are saving for your retirement and investing in your future. For more assistance, contact local financial planners.