You are never too young to start saving for retirement

You’re in your 20s or early 30s and just starting your career. Retirement seems a long way off. It might not be a major priority since you’re trying to keep up with loans, food and housing. But this is actually the best time to start. Make sure you’re not falling into these five traps:

I don’t have to start saving now. I’m young. I have time.

Yes, it’s true. You do have time. And you can make it work for you through the power of compounding and the growth potential that comes from saving early and regularly.
Think about this: Two investors save for retirement. The first investor, Cathy, starts saving at age 25 and saves $5,000 per year. The second investor, Steve, doesn’t start saving until age 40, but saves $10,000 per year. Overall, Steve contributed $50,000 more than Cathy, but started 15 years later. At age 65, Cathy had $232,418 more than Steve.1
Moral of the story: time is on your side, so start now.

I’m not missing much by not contributing to the savings plan at work. And I’m probably leaving the company soon anyway, so what’s the point.

You can contribute pre-tax dollars to your employer’s retirement plan. So, if you earn $30,000 and contribute $5,000 to your employer’s plan, you’d only be taxed on $25,000. Eventually, you’ll pay taxes when you retire and begin withdrawing money from the account.2
If your employer offers any kind of matching contribution, you only get it if you participate. If someone said, “Hey, if you put $20 in a jar, I’ll put in another $5,” you’d do it right? Same concept. The percentage your employer matches is up to them. But, you should always consider contributing enough to get the full match.
So what happens if you change jobs? Your savings (and possibly your employer's matching contributions) in your employer’s plan can go with you as a rollover3 to a new employer’s plan (if available and permits rollovers), be cashed out or be left in your old employer’s plan. Check the plan rules to see what your options are.

I’m not disciplined enough to save regularly.

Set up auto-debits from your payroll so you won’t be tempted to spend it. This kind of set-it-and-forget-it strategy is a great way to effortlessly build savings. Try to increase your savings percentage when you get a raise.

It’ll be easier to save when I’m older.

Maybe. But, maybe not. When you’re older, you may have other obligations competing for your money – like a house, kids, college, etc. There’s no time like the present.

Investing is too complicated.

A professional advisor can explain things so you can feel more comfortable with your choices. If you’re a do-it-yourselfer, TIAA offers a wealth of financial education and tools. If you don’t want to actively manage your account, consider a lifecycle fund that automatically adjusts from more aggressive to more conservative investments as you get nearer to retirement.
There are plenty of people in their 30s, 40s and 50s who wish they would’ve started saving for retirement sooner. Start now so you’re never one of them.
You should consider the investment objectives, risks, charges and expenses carefully before investing. Please call 877-518-9161 or log on to for underlying product and fund prospectuses that contain this and other information. Please read the prospectuses carefully before investing.
1 This is a hypothetical example used for illustrative purposes only and is not intended to predict or project investment results.  No withdrawals were taken and the impact of any expenses or taxes that would be associated with an actual investment was not included.

2 Withdrawals of earnings are subject to ordinary income tax, plus a possible federal 10% penalty if you make a withdrawal before age 59 ½.

3 Prior to rolling over, consider all your options.  Compare the differences in investment options, services, fees and expenses, withdrawal options, required minimum distributions, other plan features, and tax treatment. Speak with a TIAA Consultant and your tax advisor regarding your situation. Learn more .

This material is for informational purposes only and the statements represent TIAA's interpretation of applicable law. It is presented with the understanding that TIAA (or its affiliates, distributors, employees, representatives and/or insurance agents) is not engaged in rendering legal or tax advice. This material should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. Certain products and services may not be available to all entities or persons. Past performance does not guarantee future results.

There are inherent risks in investing in securities. TIAA products may be subject to market and other risk factors. It is possible to lose money by investing in securities.
Lifecycle funds share the risks associated with the types of securities held by each of the underlying funds in which they invest. In addition to the fees and expenses associated with these funds, there is exposure to the fees and expenses associated with the underlying mutual funds as well. The principal value of the fund(s) is not guaranteed at any time, including at the target date. The target date represents an approximate date when investors may plan to begin withdrawing funds. After the target date has been reached, some of these funds may be merged into a fund with a more stable asset allocation.