Retirement Goals for Your 20s and 30s

2. Start saving in your employer's plan

Today, 71% of millennials2 who are saving for retirement are using a 401(k) or a similar employer-based plan. There are two great reasons to save in your employer's plan if you're not already: automatic contributions and a company match.

• Automatic contributions from your paycheck means you don't have to remember to save — the money is automatically deducted from your paycheck and deposited into your 401(k).
• Company-matching contributions help you grow your retirement savings faster. It's like getting "free money" from your employer! Just remember to check the minimum contribution required to get the full match and increase your savings rate to at least that amount. For example, say your employer matches 100% of your contribution up to 5%. That means when you contribute 5% of your paycheck to your 401(k), your employer contributes that same amount on your behalf.

3. Invest beyond your 401(k)

Once you're contributing to your 401(k) plan (at least the amount to maximize any employer-matching funds), you can continue growing your savings with an individual retirement account (IRA). There are two main types of IRAs: Traditional and Roth.

• Traditional IRAs offer a tax deduction now on contributions, and you pay taxes on withdrawals when you retire.
• A Roth IRA could be the better choice in your 20s if you're in a lower tax bracket now and expect to be making a lot more money (and therefore in a higher tax bracket) by the time you retire. You won't get a tax deduction now — but you also won't have to worry about paying a higher tax rate on withdrawals when you retire.

4. Commit to saving consistently

Time really is on your side in your 20s. Even if you can't save a huge amount of money, you can still make a big impact on your retirement outlook just by being consistent.

Setting up those automatic contributions to your 401(k) makes that easier, and you can also automate what you save in an IRA. For example, saving $100 automatically each month in a Roth from age 25 to age 65 could add up to nearly $200,000, assuming you earn a 6% return.

Fine-tune your savings in your 30s

By your 30s, you've hopefully begun to hit your stride financially. You might be making more money and carrying less debt because you're paying down your student loans. That can make it easier to tackle these retirement planning tasks:

1. Step up your 401(k) contributions

As your income goes up, it's tempting to increase your spending, but you may be better off funneling that money into your 401(k) instead. If you're routinely getting a 3% to 4% raise each year, consider increasing your 401(k) contributions by half that amount. This increases your contributions and also leaves a little extra in your paycheck to keep pace with inflation.

Aligning contribution increases with an annual raise means you're less likely to notice a difference in your paycheck. And doing it consistently makes it easier to eventually max out your plan's annual contribution limit.

2. Don't overlook your Health Savings Account

If you have a high deductible health plan, you may have a Health Savings Account (HSA) to go with it. An HSA is a tax-advantaged account you can use to save for health care expenses, but it can also double as a way to save for retirement.

Any money you save in an HSA is tax-deductible, and withdrawals for qualified medical expenses are tax-free. When you turn 65, you can pull the money out for any reason without a penalty. You'll just pay taxes on the withdrawals that aren't related to health care expenses.

3. Balance retirement savings with other goals

One of the biggest challenges when saving for retirement in your 30s is juggling competing financial goals. You may want to save for a down payment to buy a home, or you might feel pressure to start putting away money for your children's college education.

The problem is that every moment you delay saving for retirement, you miss out on potential growth with your investments. If you have multiple goals, prioritize saving 11% to 18% of your income for retirement first, before focusing on other targets.

Consider saving in a Roth IRA if you're juggling retirement with saving for a home or college. You can withdraw up to $10,0005 toward the purchase of your first-home — tax-free and penalty-free — and you can withdraw any amount for qualified education expenses without paying income tax or penalties.

4. Talk with a financial advisor

Talking over your retirement strategy with a trusted professional can help you focus your planning and saving efforts while you're still in your 20s and 30s. When it comes to reaching your retirement goals, it's never too early to begin saving. If you're ready to start the conversation, give us a call at 1-888-SYNOVUS (1-888-796-6887) to begin discussing your retirement savings needs.