I’m 34 Years Old. Am I Falling Way Behind on Saving for Retirement?

I’m 34 years old and haven’t started saving for retirement.  Am I falling way behind?

That’s a great question, and there are two vantage points that we’ll want to consider when answering it.  First off, let’s look at where you stand in relation to your peers.  And second, let’s look at where you stand in relation to being on track for yourself.

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The 2015 Retirement Confidence Survey, administered by the Employee Benefit Research Institute, reported that only 55% of employed individuals between the ages of 25-34 have started saving for retirement.  While making your first investment toward retirement in your mid-30’s isn’t ideal, it’s not that uncommon either, so don’t get discouraged.

If you feel like you’ve been left behind, realize that most people your age really haven’t saved all that much money toward retirement yet.  In fact, only 43% of those individuals in your age bracket with retirement account balances have saved more than $10,000.  So with some good budgeting, and a strict savings plan, you should be able to catch up to them in no time.

While this should certainly please you, it’s not the end of the story.

Just because you can quickly catch up with your peers doesn’t mean you’ll be on track for a comfortable retirement.  A commonly used benchmark within the financial planning industry suggests that clients in their mid-30s should have 1x their annual salary saved for retirement.  So let me ask you, how much are you currently earning per year?  Ideally, this is how much you should have saved at this point, regardless of how much anyone else is saving.

For professionals who happened to start saving 8-10% of their income right out of college (or high school, trade school, etc.), they should be right on track.  For 34 year olds just making their first investment, however, they still have some catching up to do.

Don’t worry if you can’t make it all up at once, very few people will be able to.  If you have the ability to save anything this year, do it.  If you’re unable to make any savings, it’s time to make some tough decisions regarding your spending habits.  In reality, you either need to make more or spend less so you can start building that nest egg.  To get started, review your last three months worth of bank statements to see where your money is going.  Set some limits for your non-essential monthly spending and cut out as much as possible.

Keep in mind that the only way to get started is to get started.

Tim Plachta, CFP® is the founder of Reliant Wealth Management, LLC, co-founder of Ruby’s Rainbow, Inc., and a CERTIFIED FINANCIAL PLANNER™ practitioner.  He works with clients all over the country to help guide them toward financial independence.


About the Author:

Tim Plachta, CFP® owns and operates Reliant Wealth Management and Reliant Consulting Partners.  He works primarily with small business owners to help them increase profit, reduce their workload (so they can relax more), and invest enough of their earnings to achieve financial independence.