Retirement Planning
May 31, 2023

Early-Career Retirement Planning

I know it’s hard to think about saving for retirement when you’re just starting out, but it’s essential.
Stewart Willis

There’s a lot of talk suggesting millennials and Gen-Zers are financial failures. Often, it takes the form of “stop eating avocado toast or you’ll never be able to afford milestones like a home or retirement.”


That’s nonsense!


Today’s young generations have it pretty tough. Although wages have increased in recent years, over the last few decades they’ve been pretty stagnant. Long gone are the days when you could expect to get a steady job straight out of high school, support a family with children on that single income and retire decades later from the same company with your permanent vacation funded largely by your pension.


It’s not at all surprising that, especially early in your career, you’re going to feel a lot poorer than your parents and grandparents did. Enjoying the occasional avocado toast — within reason — is not going to have a significant impact one way or another on your financial situation.


I wanted to start this blog off with that acknowledgement in order to put into context the other fact we need to recognize: You may not like the system, but the system doesn’t care. In other words, unless the system changes, if you want a prosperous life and a comfortable retirement, you will have to work according to the way the system is set up.


What that means is young workers need to make as much money as they can while exercising sound financial practices. That includes saving for retirement. Unless you’re one of the few fortunate enough to land a high-salaried position straight out of college, this often means you will have to budget more carefully and work harder than many of us really want to.


If there’s one piece of advice I’d give my younger self, it would be to recognize that work-life balance can, at least in part, wait. You need to grind when you’re young. Unfortunately many people do the opposite. They work their 9-5while young, then grow older and notice their retirement savings aren’t all that healthy, and that’s when they begin to grind. This can be exhausting!


If you need to pick up a side gig in order to start a healthy savings routine while still young, I’d encourage you to do so.


Delaying the start of your retirement saving routine can be damaging in two ways. The first and most obvious is that you’ll have less money when you retire. Someone who starts contributing to their retirement savings in their late 30s is much more likely to be in worse financial shape at retirement than someone who started with their first paycheck.


The second damaging aspect of delaying retirement savings is that you’re also delaying building good savings habits. If you start contributing right away, you’ll be accustomed to saving. It won’t be a big deal, and you’re more likely to continue saving as you progress through your career. If you delay, you’ll get used to having that extra money around. You’ll tend to spend it, and as your career advances and your income increases, you’ll just keep spending that extra money instead of directing it into retirement savings.


This doesn’t mean you have to become a miser! When clients ask me what their young adult children should do, I tell them, you don’t want to sacrifice every joy and experience when you’re young in order to afford retirement-saving, but you do want to prioritize starting that serious saving as early as possible. If you start early enough, that could even give you the option of early retirement if you want it!


Save Strategically

Deciding to start saving early isn’t enough; you have to know where to save. If your company offers a 401(k),that’s a great place to start, especially if they match contributions. Even if you can’t save the whole 10-15%, you should at least contribute enough to get the company match. Otherwise, you’re turning down free money.


If your company doesn’t have a 401(k), simulate one. Set up an IRA or, better yet, a Roth IRA, and have contributions redirected from your bank account on payday. You’ll likely never miss the money in your account, and you’ll be preparing for your future.


If you’re one of the lucky workers whose company offers a pension, don’t rely solely on it. Assuming that pension will be available to you when you retire is a bet that the pension will stay well-funded. That doesn’t always happen, so contributing to a separate retirement account you control is a good way to mitigate the risk of your pension being defunded by the time you’re ready to use it.


When choosing funds for your 401(k) or IRA, consider the potential reward relative to the risk. You’ll often hear financial advisors like those at Asset Preservation Wealth & Tax say you should take on more risk early on, then dial that risk back as you get closer to retirement. That’s good advice, but don’t take it the wrong way. Don’t take on extra risk without understanding what exactly that risk entails. In other words, “take on more risk” does not mean “go buy stupid investments.” Retirement investment should not be treated the same way as gambling! Higher risk does not always correlate with higher return, and risk without reward is not a good way to build a smart portfolio.


Educate Yourself

Early in your career, you may have a difficult time finding a financial advisor you can afford who takes on young clients. Don’t despair — there are a lot of educational resources you can take advantage of. Start by reading books about building proper budgets. Also, many financial advisors have free blogs and articles like this one to help you learn about investing, retirement planning and other important aspects of financial planning.


Above all, don’t fall into the trap of thinking you won’t be able to retire and there’s therefore no point in saving for retirement. That’s a self-fulfilling prophecy with an unhappy result. Save early and often to put yourself on the path to a long, comfortable retirement.


Stewart Willis is the founder and president of Asset Preservation Wealth & Tax, a financial planning firm in Phoenix, Arizona. Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.


The commentary on this blog reflects the personal opinions, viewpoints and analyses of the author, Stewart Willis, providing such comments, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”),an SEC registered investment adviser or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment, legal or tax advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of Foundations for services, execution of required documentation, including receipt of required disclosures. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Any statistical data or information obtained from or prepared by third party sources that Foundations deems reliable but in no way does Foundations guarantee the accuracy or completeness. Investments in securities involve the risk of loss. Any past performance is no guarantee of future results. Advisory services are only offered to clients or prospective clients where Foundations and its advisors are properly licensed or exempted. For more information, please go to and search by our firm name or by our CRD # 175083.

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