When to start saving for retirement? 5 things to think about


  • Set a foundation for a secure future by learning essential strategies for budgeting and investing.
  • It’s never too late but the sooner you start saving for retirement the better chance you’ll have of reaching your long-term goals.
  • If you don’t know where to start, consider iShares LifePath Target Date ETFs, which take asset allocation off your to-do list with a professionally managed portfolio that evolves over time.


It's never too late to start saving for retirement! Rachel Aguirre, Head of U.S. iShares Product at BlackRock joins host Aaron Task to discuss ways you may navigate your financial journey, featuring practical advice on budgeting, investing, and growing your nest egg.

IN THE KNOW podcast /
IN THE KNOW podcast /
When to start saving for retirement


At first blush, the answer is quite simple: you should start saving for retirement as soon as possible. The earlier you start, the more time your money has to grow. In fact, the amount of time you have money invested can be even more important than how much you invest. Learn more about why it’s critical to put time on your side

But don’t despair if you haven’t started saving yet. It’s never “too late” to start and there’s more nuance to this topic than may first meet the eye. To help you think through this issue, here are five factors to consider when to start saving for retirement.


First, you can’t save for retirement if you spend every dollar you earn. This may seem self-evident but it’s important to evaluate your current financial position before making any long-term decisions. For example, it’s prudent to set a manageable budget for daily expenses, pay off high-interest debts, and create an emergency fund before setting money aside for retirement.

Consider the 50/20/30 rule which suggests allocating 50% of income to necessities, 20% to savings, and 30% to discretionary spending.

Second, work with a financial advisor or consider the Rule of 4.1 This guideline suggests withdrawing 4% of your retirement savings in the first year of retirement and adjusting for inflation in each subsequent year.  For example, if you have $1 million saved, you would withdraw $40,000 during your first year in retirement. The second year, you would take out $40,800 (the original amount plus 2%) and then continue adding 2% in each subsequent year.

Whatever method you use to calculate estimated retirement expenses, you’ll need to think about what kind of life you want to have in retirement and factor in living costs, healthcare, hobbies, and bucket-list adventures. Establishing clear goals will help you determine how much to save and provide a roadmap for your financial future.

Third, find ways to automate your retirement savings. Once you have a budget in place for current expenses and a sense of how much you’ll need to retire, set up automated transfers into an investment account to help curb impulsive spending, and improve the chances of meeting your long-term financial goals.

Creating automated savings habits is a key strategy to develop a disciplined approach to retirement planning. Setting up automatic monthly transfers from your bank account to a dedicated retirement savings account can alleviate the temptation to spend and provides a steady contribution towards your retirement fund.

You can plan for retirement if you’re self-employed or take advantage of employer-sponsored retirement plans, such as 401(k)s, if available. These plans may come with employer matching contributions, increasing the amount you save without additional effort on your part. It’s the closest thing to “free money” and maximizing these opportunities can boost your retirement savings.

Fourth, consider what you’ll do in the event of a one-time windfall such as an inheritance, bonus or major promotion at work. This doesn’t mean you cannot celebrate your newfound wealth in the here and now but take care to manage these windfalls wisely. Take your current financial situation into consideration and any major life events on the horizon — such as a wedding or a child going to college — and consider how events like these can also be an unexpected boon for your retirement savings.

Fifth, if you are feeling lost or overwhelmed, consider iShares LifePath Target Date ETFs, which take asset allocation off your to-do list with a professionally managed portfolio that evolves over time.  These ETFs are designed to take more risk early on and gradually become more conservative as the target retirement date approaches.


The right time to start saving for retirement is now — or at least, as soon as possible — and the key is to develop consistent and automated savings habits. By understanding the importance of early planning, setting realistic goals, and managing windfalls wisely, you can potentially build a secure financial future and enjoy a comfortable retirement. Remember, it's never too early to start securing your financial well-being for the years ahead.

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Ready to start investing? Learn how you can access 30 years of retirement investing experience with a low-cost, tax-efficient ETF.

Daniel Prince

Daniel Prince, CFA

Head of iShares product consulting for BlackRock’s U.S. Wealth Advisory Business and U.S Head of iShares Core ETFs

Aaron Task

Content Specialist