Expert Says ‘You Can Have It All, Just Not At Once,’ To Young People Planning For Retirement

While retirement might be the last thing on your mind in your 20s—especially compared to more immediate goals like paying down student debt, traveling, and enjoying time with your friends—it’s also the best time to start planning for retirement.

With a little strategic investing, Gen Zers and millennials can start laying the groundwork for a successful retirement—though it may require a bit of a balancing act.

“You can do both—it just takes intention and discipline,” said Emi Gjini, a certified financial planner (CFP) and founder of MyGen Planning.

While achieving all of your financial goals in your 20s may require some give and take, your goals may still be achievable, as long as you have a system that works for you, Gjini suggests.

“If travel is important to you, set up a dedicated ‘joy fund’ and automate savings toward it. Prioritize high-impact goals like emergency savings and retirement contributions first, then allocate toward shorter-term fun,” said Gjini. “It’s not about restriction—it’s about creating a plan that aligns with your values. You can have it all, just not at once.”

Here’s how experts suggest jumpstarting your retirement saving while you’re young.

Start Saving Early

Don’t wait for the perfect moment to start putting money away. Save what you can now, so your investments can benefit from compounding over time.

“The biggest advantage younger investors have is time,” said Maria Castillo Dominguez, a CFP at Valoria Wealth Management. “Automate your savings now and transfer your savings directly to your savings account, money market, IRA, etc.”

Take Advantage of Employer-Sponsored Retirement Plans

If your employer offers a retirement plan, like a 401(k) or 403(b), enroll in it (some employers will automatically enroll you though). This is a great way to save for retirement, especially since many employers offer matching contributions.

At a minimum, you want to invest enough to take full advantage of your employer’s match.

“If your employer matches 4% and you earn $60,000, that’s an extra $2,400 a year [of] free money you do not want to leave behind,” Dominguez said.

Consider a Target Date Fund

If you’re not sure how to invest your retirement savings, you may want to begin with a target-date fund (TDF), which is a type of fund that automatically shifts your investments towards more conservative assets as you approach retirement. TDFs are a type of fund of funds, typically comprised of a mix of stock and bond funds.

The name of the fund usually designates the retirement year—so if you’re planning to retire 40 years from now, look for a TDF for 2065.

“Consider starting with a target-date fund that aligns with your retirement age. It’s a simple, set-it-and-forget-it option to get going,” said Gjini.

Open a Roth IRA

Workers can save up to $7,000 each year in a traditional or Roth IRA.

Unlike a traditional IRA, a Roth IRA has income limits, so it can be a better option for younger workers whose income might be under the limits. Additionally, a Roth IRA is generally considered preferable for workers who expect to be in a higher tax bracket later in life. In contrast, a traditional IRA is better for workers who anticipate being in a lower tax bracket in retirement.

“A Roth IRA is a great tool in your 20s when your income and tax rate may be lower. You contribute after-tax dollars now and enjoy tax-free growth—and withdrawals—later,” Gjini said. “If your income allows, maxing out a Roth IRA each year is a solid long-term move.”

Build an Emergency Fund

Emergencies happen to everyone, but you don’t want a flat tire or sudden crisis to wipe out your bank account.

“Save at least 3 to 6 months’ worth of essential expenses in a high-yield savings or money market account,” Dominguez said. “This helps prevent credit card debt when life hits you with unexpected events—whether it is a job loss, car repair, or medical expenses.”

Avoid Common Mistakes

When you’re just starting out with managing your money, it’s easy to make errors along the way. One of the most common is lifestyle creep: As your income increases, it’s tempting to spend more, too.

 “When your income increases, keep your spending steady and increase your savings rate instead,” Dominguez says. “For example, if you get a 5% raise, commit to saving 3% of it. This habit alone can put you far ahead financially.”

Another error is forgetting about an IRA after you open it. Cash in IRAs don’t grow by themselves—unlike 401(k)s, you need to invest the money yourself.

“The biggest mistake I often see is people who do the smart thing and open a Roth account, but then forget to invest the money inside it,” said Sarah Paulson, a CFP and owner of Valkyrie Financial. “Make sure you put that savings to work!”

But one of the biggest mistakes is waiting for the perfect moment or delaying savings in favor of other financial goals. “Time in the market beats timing the market,” Gjini said. “Student loans matter, but so does building wealth. It doesn’t have to be one or the other.”

The Bottom Line

When you’re in your 20s, your savings have four decades to compound and grow. That’s why it is so important to start investing when you’re young.

An employer-sponsored retirement plan is a great place to start, but a Roth IRA can help boost your savings, too. And even as you earn more money, try not to increase your spending—focus on boosting your savings rate instead.