How I’m Catching Up On Retirement Savings After Age 30

I wasn’t thinking about retirement savings at the beginning of my freelance career in my early 20s. I was more concerned about things like mounting credit card debt, locating the best discount grocery store, and juggling part-time gigs to make my side hustles work. Savings in general, and especially retirement savings, was a luxury I couldn’t afford.

And then, with a blink of an eye over the next decade, I turned 30 without a penny saved toward my golden years. It struck me one day, as most transitions into adulthood do, that I was not properly setting myself up for a future of prosperity. And that’s when I turned to the help of a professional financial advisor. 

I met Keith Fichtner, financial advisor for Edward Jones, when he did a financial presentation at the coworking space I’d been using in Missoula, Montana. With my recent retirement revelations, and a couple of successful years as a full-time travel writer, his presentation piqued my interest, and I followed up with a meeting.

Fichtner’s advice for me the first day we met is the same advice he gives anyone who walks through his door: “The first step is understanding your financial situation,” Fichtner re-emphasized during a recent in-person meeting at his office. 

Understanding your financial circumstances includes tallying up your monthly expenses, current debt and discretionary income. “It’s getting the whole financial picture out there first. Funding the retirement account and recommending appropriate investments — that is the easy part of my job,” said Fichtner.

I was quickly approaching the age of 31 at the time I first met Fichtner — my freelance income was steady, my debt thankfully diminishing, and I could make monthly contributions to my future self without shopping exclusively at the discount grocery store. With that information at hand, Fichtner helped me start a game plan for my distant retirement. 

My first question was, what’s the magic amount I should be aiming for if I want to retire around age 65? And like most financial forecasts, the answer depended on several approximated values. Fichtner mentioned the goal number used to be a million dollars, but forces like inflation and personal goals for retirement may increase that for many individuals. Some, therefore, use a retirement calculator to estimate their future cost of living.

The feeling of being late to the party immediately struck. As a self-employed individual, a Traditional IRA or a Roth IRA were my most logical choices for a retirement savings account. Ideally, I’d make contributions to max out the $6,000 per year limit, or $500 per month when broken down into smaller monthly amounts.

Fichtner calculated for me: If I could make the maximum yearly contributions starting at the age of 31, with an average 6% investment return and 3% rise in inflation, I would be sitting on approximately $700,000 (pre-taxes) with a traditional IRA when I turned 65. (You can use a compound interest calculator to calculate this hypothetical value for your own situation.)

RELATED: How one millennial built his net worth to $500,000 by age 31

While $700,000 is a considerable chunk of change, it struck me that my future retirement fund balance was considerably far from that million-dollar retirement number Fichtner introduced — and with inflation, who knows what $700,000 will be worth in the year 2054.

And what’s more, while I was finding success in freelance writing, I had yet to sell my best-selling novel or receive a Netflix adaptation for my work. So with my limited budget, I felt more comfortable starting with a smaller monthly contribution. I began putting aside closer to $250 per month, or half of that $500 goal. And with the same interest and inflation as noted above, that…