When Should You Start Saving For Retirement?

Posted by: Michael S. | Mar 07,2008


If you look at that title, you might think this entry should go in the retirement section.  I mean to aim this post at younger newlyweds – those in their twenties and thirties who comprise the majority of newly married couples. Is there ever a time when it’s unwise to save up for retirement.  The answer is yes.  That may sound contrary to logic because so many financial analysts decry how irresponsible many people are being about retirement savings.  

This could make it seem that if you’re not saving up for retirement right now you’re being reckless.  This isn’t true.  It depends on your age and your financial standing.  While it’s a good idea to be considering building up a retirement portfolio, it should not necessarily be on the forefront of your mind if you’ve recently graduated college with a lot of student loan and credit card debt.  If you’ve just gotten married to a person who’s facing the same problem, you’ve got other priorities.  

If you’ve got substantial student debt – which can sometimes go into six figures – you’ve got to be aggressive about paying off that debt before thinking seriously about retirement.  Though a 401(k) plan is not a bad idea if you have the opportunity, the bulk of your time and money should be spent tackling that debt.  The longer your debt is allowed to linger, the more taxing it will be later in life when retirement saving is most crucial.  

Really, I don’t think it’s all that necessary to start thinking about saving for retirement while you’re still in your twenties.  At that age, it’s important to deal with the money that’s already been spent – the debt – than saving for something that is decades in the future.  

Newlyweds also have to be thinking about the immediate future: namely buying a home and having a child.  When it comes to prioritize savings, retirement should be towards the back of the line.  Excessive early debt will make it that much harder to buy a home – either to put down a sizable down payment or to receive a decent interest rate.  Because of this, you should really think about paying off your existing debt before investing too many resources in other types of savings accounts or investments.  

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