7 Retirement Tips for People in Their 30s

As you move from your 20s to your 30s, your financial life can get more complicated and keep you from saving for retirement. Instead, use these 7 tips to make sure you don't forget your priorities and are fully prepared for a comfortable retirement. 

Rich Ellinger, Guest Writer
5-minute read

Retirement Tip #4: Put your retirement ahead of your kids college

If you become a parent, you will find it very difficult to put your needs ahead of your children. However, this is a circumstance where you should.

Between work-study, scholarships, and loans, there are many ways to fund college. Unfortunately, no one is going to loan you money for retirement. In an ideal world, you will find enough money to save for both. However, if you are forced to make a trade-off, fund your retirement first.

Also see: 7 Retirement Tips for People in Their 20s

Retirement Tip #5: Don’t be afraid of stocks

To hit your retirement goals, you need investments to outpace inflation--and stocks are the best game in town to do that.

With two 50%+ drops in the stock market in the past 15 years, it is understandable that younger people are nervous about putting their money in stocks.

What you need to realize, though, is that time is on your side and “safer” alternatives aren’t really so safe. For more on this latter point, check out The Fallacy of Safe Investing.

The bottom line is that over the long run stocks almost double the return of bonds and have never lost money over a 30-year window (or even a 15-year window, for that matter). To hit your retirement goals, you need investments to outpace inflation--and stocks are the best game in town to do that.

Retirement Tip #6: Don’t overload on your company’s stock

Investing in your 401k is great. So is working for a company that gives you stock options or discounted stock purchase plans.

Just make sure you don’t end up with too many of your assets in your company’s stock. As your portfolio grows, it’s important to diversify so you don’t have more than 5% of your assets in any one company. You are already counting on your employer for your income, so if something happens, it’s a double whammy if you own too much of the company’s stock.

Just ask former Enron employees--many of them had their entire 401k in Enron stock. When the company collapsed, they not only lost their jobs but their entire savings as well.

Retirement Tip #7: Don’t cash out your 401k when you change jobs

When changing jobs, it can be tempting to cash out your 401k and spend it. Don’t.  

In addition to having to pay taxes on the balance, you’ll add a 10% penalty for early withdrawal if you aren’t 59½. Roll it over into an IRA and invest the money in a diversified portfolio of ETFs or mutual funds according to your desired asset allocation.

Final thoughts

The 30s is an exciting time in most people’s lives. It's also a great time to build solid financial habits. Follow these 7 retirement tips and don’t get distracted by all the competing priorities. You’ll be glad you did!


Rich Ellinger is the founder and CEO at Wealthminder.com, an online service that makes it easy for individuals and families seeking financial advice to connect with qualified advisors and hire a qualified professional based on their needs and goals.

Parents Giving Piggyback Ride image courtesy of Shutterstock.