When Should You Start Saving for Retirement?

When Is the Best Time to Start Saving for Retirement?

The best time to launch your retirement fund depends on your situation and your goals. But ideally, you should begin saving for retirement as soon as possible.

If your employer offers a 401(k) retirement plan—particularly one with a matching contribution from your employer—consider enrolling in it as soon as you can. When you consistently add money to a 401(k), your investments earn returns that, over time, generate their own returns.

Learn more: Retirement Planning Guide

Retirement Saving Benchmarks

A formula from financial services company Fidelity suggests saving at least:

• By age 30: The equivalent of your annual income
• By age 40: Three times your annual income
• By age 50: Six times your annual income
• By age 60: Eight times your annual income

The table below shows what applying those benchmarks to the typical salary for each age could look like.

^*Source: U.S. Bureau of Labor Statistics, third quarter (Q3) of 2025

How Much Do I Need to Retire?

How much money you need to retire depends on how you want to live in retirement.

For instance, traveling extensively as a retiree will likely eat up more money than being a homebody.

Your health will also dictate how much money you'll need. If you're in great shape, you may end up with fewer medical bills than if you're coping with a chronic disease. Living arrangements will play a part as well. Living on your own could easily cost more than sharing a home with a roommate or relative, and living in a nursing home or similar facility could be even more expensive.

Tip: As a rule of thumb, you might need a pool of money equaling 70% to 80% of your preretirement income to live comfortably as a retiree. If you live longer than you'd envisioned, you'll need even more money for basics like health care and housing.

Complicating matters is that Social Security benefits might not adequately cover your post-retirement expenses. Social Security is designed to replace only about 40% of an individual's preretirement income. In January 2026, the average retired worker in the U.S. received $2,071 in Social Security benefits. That adds up to just under $25,000 per year.

A 2025 study by financial services company Northwestern Mutual found American adults believe $1.26 million is the "magic number" for retiring comfortably. You might adopt that as a goal or pick a different number. For some people, reaching $1.26 million might be a no-brainer. For others, it may be out of the question.

Learn more: How Much to Save for Retirement by Age

Where Should I Put My Retirement Savings?

When deciding where to put your retirement savings, you have a menu of options. Here's a breakdown of some of the most popular.

401(k)

An employer-sponsored 401(k) plan lets you contribute a portion of each paycheck to a retirement account. Your employer might match your contribution, essentially giving you free money.

In 2026, you can contribute up to $24,500 to a 401(k). People 50 and over can make catch-up contributions of an additional $8,000 ($32,500 total). If you're aged 60 to 63, you can make a super catch-up contribution of $11,250, for a total of $35,750.

Investment options for your 401(k) funds include exchange-traded funds (ETFs), mutual funds, and individual stocks and bonds.

Learn more: How to Invest Your 401(k)

Traditional Individual Retirement Account (IRA)

An IRA allows you to set aside money pre-tax for retirement even if your employer doesn't offer a retirement plan. You can also open an IRA if you have a 401(k) through your employer to build up even more retirement savings.

Investment options for a traditional IRA include ETFs, mutual funds, and individual stocks and bonds.

In 2026, annual contributions to a traditional IRA are limited to $7,500. The IRA catch-up contribution limit for people 50 and over is $1,100 for a total of $8,600.

Taxes on traditional IRA contributions and earnings are deferred until you make withdrawals.

Learn more: How to Choose an IRA Provider

Roth IRA

Roth IRAs operate like traditional IRAs except for the tax implications. These plans are funded with after-tax dollars, so they don't provide an upfront tax advantage like a traditional IRA does. However, you will not be taxed on withdrawals in retirement.

Investment options for a Roth IRA include ETFs, mutual funds, and individual stocks and bonds.

In 2026, annual contributions to a traditional IRA are limited to $7,500. The IRA catch-up contribution limit for people 50 and over is $1,100.

Learn more: Should You Convert Your Traditional IRA to a Roth IRA?

Brokerage Account

Brokerage accounts aren't specifically retirement savings vehicles, but these investment accounts can be used to build funds you'll use in retirement.

You can set up a brokerage account at an online or traditional investment firm. This gives you access to a variety of investment options, including ETFs , mutual funds, and individual stocks and bonds.

Learn more: Pros and Cons of Brokerage Accounts

How to Save for Retirement

Unfortunately, you can't take a set-it-and-forget-it approach to retirement savings. It takes some work to accumulate enough money for retirement. Here are six tips for getting started with retirement savings.

1. Set up automatic contributions. When you automatically contribute to a retirement account, you don't need to constantly think about adding money to it and stand a better chance of reaching your retirement goals. You don't have to start by contributing 15% of your paycheck each month, though; even just 2% of your paycheck is a step in the right direction.
2. Take advantage of your employer's match. Many employers add money to your workplace-sponsored retirement account through contributions that mirror those you're making from your paycheck. For instance, an employer might provide a dollar-for-dollar match of your regular contribution of up to 3% of your pay.
3. Pay off high-interest debt. Wiping out high-interest debt like credit card debt means you're no longer paying interest charges that can exceed your investment returns. It also frees up money to put toward retirement.
4. Cut expenses. If you want to get serious about saving for retirement, put together a household budget that can help you identify areas for reducing expenses. You might even go so far as avoiding purchases of big-ticket items that you don't truly need.
5. Resist touching your retirement accounts. It might be tempting to make early withdrawals from a 401(k) or IRA, but you could pay the price through painful tax penalties and lower retirement earnings.
6. Stash extra cash. Did you earn a bonus at work? Did you receive a generous tax refund? Consider funneling that money into retirement savings rather than splurging on new clothes or pricey vacations.

Frequently Asked Questions

The Bottom Line

With the typical U.S. working adult holding less than $1,000 in retirement savings, starting early—and staying on track—is vital to building your retirement savings. Regardless of your age or retirement account balance, now is the best time to start saving—or to increase your savings—for retirement through vehicles such as a 401(k) plan, traditional IRA or Roth IRA.

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