If you’re in your 20s or early 30s, retirement may feel like a distant concern—something to worry about later. You’re focused on building a career, paying off debt, or simply making ends meet. And you’re not alone.
According to the Federal Reserve’s Survey of Consumer Finances (2022), only about half of U.S. households headed by someone under age 35 had any money in retirement accounts. That makes young adults the least likely working-age group to have dedicated retirement savings.
This reality makes sense. Early in your career, income is often lower, job stability may still be developing, and major expenses—education, housing, family—compete for every dollar.
Yet despite these challenges, there’s encouraging news.
A Positive Shift Is Underway
While participation remains low, retirement account ownership among young adults has steadily increased over the past decade. More people are starting earlier—and even small steps are making a meaningful difference.
The reason is simple but powerful: time.
“A dollar saved at 25 is worth perhaps four or five at 55—not because of some magical formula, but because it gets 40 years to quietly compound while you're busy doing other things,”
— Eric Ludwig, PhD, CFP, RICP, Director, Center for Retirement Income
The real risk isn’t starting small.
The real cost is waiting.
Why This Matters
Saving in early adulthood can feel difficult, but time is your greatest financial advantage. Even modest contributions—$30 a month, or about a dollar a day—don’t just accumulate; they compound, growing exponentially over decades.
You don’t need to save a lot early.
You need to start.
How Much Do People Under 35 Actually Have Saved?
For individuals aged 18–34 who had retirement accounts in 2022, the median balance was $18,800.
That’s far lower than older age groups—but it’s far from insignificant. For many young adults, this represents the result of small, consistent contributions made early.
Why Medians Matter
We use medians, not averages, because they give a clearer picture of what’s typical. Averages can be distorted by very high balances, while the median shows the true midpoint—half have more, half have less.
The Right Goal at This Stage of Life
At this point, your priority isn’t perfection—it’s habit formation.
A practical early benchmark is to work toward saving roughly one year of core living expenses by your early-to-mid 30s, while recognizing that debt repayment and housing costs often compete heavily for cash flow.
Progress matters more than pace.
How to Start Building Retirement Savings Early
“If you’ve recently started saving for retirement, remember to consistently contribute to accounts like a 401(k) or IRA—even if the amount is small to start,” says Mindy Yu, CIMA, senior director of investing at Betterment.
Simple Tips to Boost Your Retirement Savings
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Start small, stay consistent
Even tiny contributions build momentum—and confidence.
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Use employer plans if available
A 401(k), especially with employer matching, is free money you shouldn’t leave on the table.
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Automate contributions
Set it and forget it. Automation removes the temptation to skip months.
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Increase savings gradually
Raise contributions when you get a raise or bonus—without feeling the pinch.
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Focus on the long term, not short-term market noise
Time in the market matters more than timing the market.
Article By-Shahzad Ahmad
