With people living longer, rising costs and an unpredictable future, waiting to nail down your retirement plan could mean scrambling later to catch up.
Whether you’re not yet 45 and just starting to save, or 55 (or older) and fine-tuning your strategy, taking action today sets you up for a secure financial future tomorrow where you call the shots.
Why now matters
A 2024 Federal Reserve report, as well as early 2025 data from Gallup, indicate that 55% to 60% of all adults have a retirement savings plan, such as a 401(k), IRA, or 403(b). Vanguard's How America Saves report (released in early 2025) puts that figure a little higher at 68%. That leaves about 40% to 45% without any retirement plan.
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And yet, EBRI's 2025 Retirement Confidence Survey casts light on the approximately 22% of retirees aged 50 to 64 who have no savings at all, relying solely on Social Security. The fact that Social Security is on shaky financial ground means that time becomes your biggest asset in retirement planning — or your biggest hurdle if you delay.
Every year you wait, your savings window shrinks, forcing you to make larger catch-up contributions. Delay too long, and you may face tough choices, such as lowering your expectations for a happy retirement or continuing to work past your planned retirement age. Plus, with inflation and healthcare costs rising, starting early or adjusting now helps you stay ahead of the curve.
Linda R. Jensen, Certified Exit Planning Advisor with Heart Financial Group, advises anyone, whether age 20 or 60, to start early and tap into the power of compounding interest.
"If you contribute just $3,000 each year between ages 25 and 35, your nest egg could grow to over $315,000 by retirement at age 65, even if you make no further deposits," she says. "Whereas delaying until age 35 and contributing for 30 years yields around $306,000.”
”Remember it's never too late — if you’re behind, you can still benefit from catch-up contributions,” she says.
Steps to get your plan in shape
“The truth is, there’s no ‘perfect' age to begin planning,” says Tansley Stearns, President and CEO at Community Financial Credit Union. “The best time really is now, no matter where you are in life. But even if you feel like you’re later in the journey, the most important thing is to start.” No need to feel overwhelmed.
Here’s how to start saving for retirement or level up your game:
Consider where you're at right now
Take a close look at your bank accounts, your 401(k), IRA, savings and other current and future income from Social Security, a side business or real estate. Then list both your fixed and variable expenses, such as a mortgage, high-interest credit cards, auto payments, and other monthly expenses. Knowing where you stand financially helps you set realistic goals for your future.
Factor in unexpected costs
Consider health and long-term care expenses when planning for your retirement. These costs (often unexpected) are frequently not budgeted but can represent a substantial part of spending as you age.
Wheeler Pulliam, CFP and Managing Partner at Xponify Financial, notes that advancements in medical technology and improved elder care are increasing the duration of long-term care.
"Currently, 85% of women are projected to need such care for an average of 2.5 years, costing $2,500–$12,000 monthly," he says. "In 20–30 years, with inflation, women may need over $500,000 for long-term care.”
Healthcare costs can eat up retirement savings. Look into Health Savings Accounts (HSAs) if you’re eligible, or explore long-term care insurance. Medicare kicks in at age 65, but it doesn’t cover everything, so plan for gaps in coverage.
Dream of your ideal retirement
Picture your ideal retirement. Will you travel the world or downsize to a cozy cottage? Estimate the costs you’ll incur for the lifestyle of your dreams. A good starting point is to plan for 70% to 80% of your current income annually, adjusted for inflation.
Supercharge your savings
Max out your 401(k) or IRA contributions if you can. If you’re 50 or older, catch-up contributions let you stash an extra $7,500 per year in a 401(k). If you’re 60 to 63, you can now contribute up to $11,250 to your 401(k), far above the standard catch-up amount. Even small increases, like bumping your contribution by 1%, can add up over time.
Spread out your investments
Diversify your investments: Consider stocks, bonds and maybe money earned from real estate. As you age, shift toward safer options like bonds, but don’t ditch potential growth entirely. A financial advisor can tailor this to your timeline.
Get expert help now
A certified financial planner can crunch numbers, optimize taxes and customize your retirement strategy. Many planners offer free initial consultations, so it’s worth getting expert help now to avoid costly mistakes later.
Watch out for these traps
- Underestimating costs: Healthcare, travel, or inflation can hit harder than expected. Budget for surprises.
- Over-relying on Social Security: It covers only about 40% of pre-retirement income for most people. Don’t count on it as your primary source of income in retirement.
- Ignoring taxes: Withdrawals from 401(k)s or IRAs are taxed. Plan your drawdown to minimize the damage to your wallet.
When do most people start retirement planning?
Many people start planning for their retirement in their 20s or 30s through employer plans, but they often actively begin to ramp up their efforts later.
- Early starters in their 20s and 30s. Only about 50% of households under 35 have retirement accounts. Many in their 20s start saving at their first jobs, but 40% delay due to debt and student loans.
- Peak starting age for many: 30s and 40s: This is when most people begin or ramp up their contributions. 62% of households aged 35 to 44 have accounts. T. Rowe Price recommends saving 1 to 1.5 times your annual salary by age 40.
- Late starters or catch-up phase: 50 and up: 20% of people age 50 and up have no savings. The average starting age for formal planning is approximately 45 years, according to a 2025 Transamerica survey. However, 57% of retirees report that they wish they had started earlier.
Take that first step today
Evan Potash, Executive Wealth Management Advisor at TIAA, cuts to the point. "Now is the best time to start planning for retirement.” Ideally, this process begins in your early 20s. This doesn't mean creating an intricate retirement strategy immediately, but the sooner you start saving, the better positioned you will be for a comfortable retirement down the road.”
In other words, don’t fall behind. Now is the time to get your retirement plan in order. Start small by checking your 401(k) balance, adjusting your budget and scheduling a consultation with a financial planner, even if you don’t think you need it.
Every step moves you closer to a retirement where you’re in control, whether that’s sipping coffee on a beach or spoiling grandkids. You’ve got this — make today the day you start.
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