In a recent USA Today article, Wes Moss shared his thoughts about how investors can save for retirement at various ages.
“You have to realize that saving for retirement is a marathon and not a sprint,” Moss says about investing. Most people worry about having enough money in retirement. But you can roll up a substantial nest egg — even if you don’t make a lot of money during your working years. The keys include learning to budget early in life, sticking with it, saving aggressively during your peak earning years and investing your money wisely and diversely.
When it comes to saving at various ages, experts give various tips and advice. Here are a few:
1. In your 20s: Get out of credit card and/or college debt, Moss says. Once you have a little bit of free money, you should start investing in a 401(k) or other retirement plans, and “start a Roth IRA as soon as humanly possible,” he says.
2. In your 30s: Do a budget. Moss recommends that people try to allocate 50% of their income to living expenses; 30% to taxes and 20% to savings. That savings rate may seem high, but couples who save that amount think of it as normal, he says. If you can’t save 20%, then at least save 10% and try to work up to 20%, he says.
3. In your 40s: Focus on smart investing. Make sure you own both U.S. and international stocks in a diversified low-cost manner, Moss says. “You want to be heavily weighted toward stocks as opposed to bonds.”
4. For 50 and older: Save even more than 20% of your net income to make up for the years when you weren’t able to save enough, Moss says.
Read the full USA Today article with more tips here.