The Smart Woman’s Guide to Planning for Retirement

You’ve likely heard more than a few times that hindsight is 20/20. It’s true. Who among us cannot look in the rearview mirror of life and see things more clearly?

While I am determined not to live my life with regret, there are a few things I wish I’d known sooner. Like how the decisions I made in my twenties would throw my thirties into a major tailspin. Had I known, or cared, perhaps I could have avoided some very costly mistakes.

What follows are simple guidelines or benchmarks for your 20s and 30s as it relates to preparing for retirement.

In Your Twenties

This is your defining decade and by far the most important decade for retirement planning. You’re younger–and probably poorer–than you’ll ever be again.

What you’re experiencing now in your twenties may not feel big enough or important enough to have anything close to a lifetime impact. Your income is low, your debts may be high, and you may feel as though you’re living on the financial edge. Even though what you are experiencing now may not appear to be important, the truth is that big events of life don’t always start out big.

The good news is that because you are young you haven’t picked up a lot of bad financial habits. You have time to build a solid financial life. And the sooner you get on with that, the less it is going to cost you in the future to make up for any mistakes you make because you will make far fewer of them.

Develop your financial intelligence. Start by becoming an effective money manager. Get your act together now by putting together a spending plan. Assign every dollar that flows into your life a job to do, then follow up to make sure it did as it was told.

Start an emergency fund and get out of debt. Build your emergency fund as quickly as you can. This will give you the cushion you need to weather unexpected expenses and emergencies without having to raid your retirement savings. If you’re in debt, fix that now and not later.

Open a retirement savings account. Join and participate in your employer’s retirement savings plan, at least to the match, as soon as you qualify. Open and fund a Roth IRA as well. Consider yourself on track if you are regularly contributing 5 percent of your annual income to retirement savings.

Stay physically, emotionally, and spiritually fit. Retirement preparation is not all about money. It also involves building and maintaining physical health by watching what you eat and exercising–both of which are much easier to begin when you’re young and filled with energy.

Your twenties matter. By making a decision now to start saving and preparing for the years you will spend in retirement–no matter how far away they seem–you will make a life-changing decision you will never regret.

In Your Thirties

Your college loans are probably paid off; you may be married and starting a family. You have career goals, but you haven’t reached your full earning potential. If you want to retire by age sixty-seven, you have about thirty years. If you’ve been saving, you’re on your way. But if you’ve put it off, it’s time to catch up.

Fund your 401(k) and a Roth IRA. If your employer offers a 401(k), participate at least to the point of the match so you don’t leave any free money on the table. Also open a Roth IRA and make funding it to the maximum each year a top priority. Set up automatic deposits to do this so you won’t have to rely on your memory or make that “Will I or won’t I?” decision every time you get a paycheck.

Buy a home. Siphon off a down payment from the savings you have been growing with 10 percent of your take-home pay. Do not give into the temptation to buy the most expensive home you can ford. Instead, buy half the home you can afford, then make the largest payments you can afford. Your goal is to own this home outright as soon as possible. Do not enter into any home equity loans. That’s a way to shoot yourself in the foot.

Set a goal for college savings. When the babies are born is the time to start saving for college. You may be squeezed already, but now is the time to determine your philosophy on who pays for college. You do not want to go into debt for this. If you plan to pay for all or part of your child’s education, do that with money you have saved and invested, not with loans you take on in eighteen to twenty years.

Purchase life insurance. If there are people who depend on your income who would be in a desperate situation without it if you were to die, you need life insurance. Here’s some good news. Term life insurance has become very cheap in the past few years.

Build your Contingency Fund and get out of debt. Your Contingency Fund should be your first priority. Unfortunately, you don’t have time to devote your attention to just one area at a time. So at the same time you are saving for emergencies, you must pay off your unsecured debt.

Your thirties matter because these are the years that you’ll make the big financial decisions of life–kids, house, and career. This is the busy decade, and with all of the joy and high-speed living that comes with raising a family, it’s easy to lose sight of planning for the future. I know how easy it is to assume there will be plenty of time for that later.

Mary Hunt is a syndicated personal finance columnist and the author of The Smart Woman’s Guide to Planning for Retirement (Revell, Nov. 5, 2013). For more advice on planning for retirement with confidence connect with her on Facebook at

  • Especially if it’s this summer, I would definitely be on the beach at South Haven, MI soaking up the sun and reading a book or magazine. I don’t rest unless I’m sleeping, so this would be wonderful!

    • Autumn

      Michigan beaches are the best!!

      • jess

        You obviously haven’t been to southern CA…

        • belle

          Traffic, smog, everything obscenely priced. What’s not to love?

  • If I had an extra hour each day, I would spend it sleeping!

  • Carrie Waller

    Read the 32 million magazines I have piled up on my coffee table!!

  • sleeping! 🙂 this is only for today.. generally; blogging..creative jobs take a lot of time..

  • I would spend it reading. I feel so busy lately that I can’t devote enough time to read all the books that I want to. I’ve started reading during my breaks at work!

  • maria patricia

    That’s exactly where we need more time … Then make a list of priorities …

  • Autumn

    I would alternate between calling friends you don’t get a chance to talk to frequently and reading.

  • I would take time to read more! I usually have so many things to do when I get home from work that I don’t get to reading and relaxing before bed.

  • In This Wonderful Life

    This is tough…If my kiddos were asleep, I’d probably spend it trying to work on my house. We’ve lived here over a year and still don’t have anything hanging on the wall! HA!

  • Right now I’d say napping, but I also would consider being pool side with a great book!

  • I could create a list but my main focuses with an extra hour would be:

    Blog catching up (mine and reading of others)
    Reading (books and the magazines I have piled up)
    Taking a walk (living in SF walking, I walk everywhere but don’t often have the chance to take in the scenery and just enjoy it)

  • Working on my Etsy shop! I work full-time, but it’s been such a dream of mine to run my own shop. I have so many ideas and things I want to do with my shop, but not a lot of time to do them!

  • Sarah Pickell

    I’d catch up on my blog reading, and try and start the one I have cooking up in my head.

    Read my books and magazines that have just piled up on my nightstand.
    Take a bubble bath and pamper myself. I need some more “me” time.

  • $51564392

    I would be working on my blog editorial calendar or sleeping. 🙂

  • Jenny Wise

    I would spend that one precious hour reading until I fall asleep. That pretty much sounds like heaven right now!

  • Rebecca Ann

    I would use an extra hour to catch up on my magazine reading! I’ve fallen behind, and have issues from March that I still need to get through!

  • Megan Markowski

    I would LOVE that hour to get errands done – grocery shop. But realistically, I would probably sleep 🙂

  • I’d love an extra hour each day to spend NOT tied to a to do list. I feel like my days are consumed by checking things off a list – it would be great to actually relax and have an hour to myself.

  • I’d read a book, write back a long message to a friend, or get an hour of extra sleep.

  • Kate

    Despite my proclivity for hitting the snooze button, recently I started waking up an hour earlier so I have time to run, sip coffee, read blogs, etc. I can’t tell you how much of a difference it has made – having a little “me” time before starting work has really made me feel so much happier and in charge of my life. (Plus, it’s really nice to wake up a bit before the emails and phone calls start coming in!)

  • LCB

    Reading. For fun.

  • Christi Ziyambi

    blogging, pinning, reading blogs and going through pinterest.

  • I’d meditate or work on my beauty regime (face masks, deep conditioning, whitening) all the things I never have quite enough time to squeeze in post AM workout.

  • Gattina

    I would catch up with my friends in person or call them instead of text messaging or tweeting or on FB

  • Chrissa Reed

    I would continue working on my novel and write. And write some more!

  • Shar

    I’d spend some time with myself even if it’s just sitting in the park or at a coffee shop, just to clear my head and hear myself think.

  • the legal career girl

    Honestly, if I had an extra hour, I’d probably use it to sleep in every morning. Not the most exciting use of the time, for sure, but I think that extra bit of sleep would help me be more productive during the day.