You've likely heard more than a few times that hindsight is 20/20. It's true. Who among us cannot look in the rearview mirror of life and see things more clearly? While I am determined not to live my life with regret, there are a few things I wish I'd known sooner. Like how the decisions I made in my 20s would throw my 30s into a major tailspin. Had I known or cared, perhaps I could have avoided some very costly mistakes.
What follows are simple guidelines or benchmarks for each decade of life as it relates to preparing for retirement.
In Your 20s
This is your deﬁning decade, and by far the most important decade for retirement planning. You're younger—and probably poorer—than you'll ever be again. Laying the groundwork now can make all the difference for you in the years to come. A few tips:
Start an emergency fund and get out of debt. Build your emergency fund as quickly as you can. This will give you the cushion you need to weather unexpected expenses and emergencies without having to raid your retirement savings. If you're in debt, ﬁx that now—not later.
Open a retirement savings account. Join and participate in your employer's retirement savings plan, at least to the match, as soon as you qualify. Open and fund a Roth IRA as well. Consider yourself on track if you are regularly contributing five percent of your annual income to retirement savings.
Stay physically, emotionally, and spiritually ﬁt. Retirement preparation is not all about money. It also involves building and maintaining physical health by watching what you eat and exercising—both of which are much easier to begin when you're young and ﬁlled with energy. Investing in relationships will nurture your emotional health, while deepening your walk with God will keep you spiritually ﬁt.1