Save. Spend. Splurge.

Retirement Strategies for 30-year olds

You can read the entire article here and I highly recommend it, however I’ve summarized their advice into these bullet points.

A lot of their advice overlaps from one person to another so I’ve consolidated it a bit.


  • Start saving early and save, save, save, no matter what.
  • Pay yourself first (at least 10%) and automate it; there’ll always be a convenient excuse to not save.
  • Time is your biggest asset and young people have a lot of it (compounding interest).

  • Put all salary increases 100% straight into your retirement funds until they are maxed out.
  • Keep a heavy stock allocation of 90% stocks with 30% in international funds until your early 40s.
  • Contribute to your Roth IRA / TFSA because the money is tax-free upon retirement.
  • When you reach your retirement age decrease your retirement funds to just 50% in stocks.
  • Stocks are not as risky earlier on (when you’re young), versus when you get closer to retirement.
  • Understand what and how your investments act and how to divest if need be.
  • Be prepared to live a long life (up to 100 years old), so save and plan accordingly.
  • Take care of your body / health and your relationships to those around you.
  • You will need more money in retirement than you think.
  • Set aside money for your children’s college education early on. (1)
  • Take a course on retirement planning with a neutral organization. Don’t sign up with a company.
  • Learn how to invest, particularly focusing on index funds.
  • Buy a home, don’t rent — you’ll probably come out ahead. (2)
  • Avoid credit card debt.

I only disagree with these two points:

Set aside money for your children’s college education early on

Do this only if you have the money to spare.

Otherwise, focus on your retirement first.

You can’t assume that your kids will want to go to college, and you also can’t assume that they’ll make enough money to support themselves and you in retirement.

It’s best that you take care of yourself and you retirement so that your kids won’t feel the burden of doing so (or may not be able to).

Make your kids save for their own education.

Buy, don’t rent

I wrote a whole post on this about renting instead of buying.

Don’t assume that buying is cheaper than renting. Do the math first.

If you can’t afford a home in your area, then don’t buy one until you can and have 20% saved as a down payment.

Otherwise, consider leaving for a cheaper area.

Assessing my own situation

I am in my 30s now (on the nose), and I think I’ve hit on all of their points.

  • I have fairly strong friendships and family relationships (not with my father but that’s another story).
  • My retirement funds are maxed out into index funds with a small portion in individual stocks.
  • I’ve amassed savings of $230,000 so far.
  • I am prepared to live very long and am making sure I do by eating good, healthy food.
  • I’ve avoided credit card debt.
  • I have a very heavy stock allocation in my portfolio of 90% and will keep it that way until 45.
  • I plan on working and saving even more, I have a good 30+ years ahead of me to do so.
  • I’ve taught myself how to invest and I’ve been focusing on index fund investing and dividend investing.

My own personal advice

Not that I am in retirement, but I think as I am in what I call semi-retirement (work for a year, chill for a year, wash, rinse and repeat), I might be a tiny bit qualified to say this:

  1. Have a plan for what you will do in retirement — go back to school, volunteer, teach, etc. Have a life PROJECT.
  2. Enjoy your money when you’re young as well; don’t hoard it just because you’re scared of the future.
  3. Watch out for lifestyle inflation; I am currently struggling to bring myself down.
  4. Be aware that life plans change and be flexible enough to deal with them when they do.
  5. Don’t count on anyone to give you an inheritance or any money, particularly for retirement.




  • Potato

    Saving for a kid’s education is a tough one.

    On the one hand, yes, if you’re on the edge you need to look after yourself — the kid can get a loan/work a job/get a scholarship/figure it out, whereas you don’t have such backup plans for retirement.

    On the other hand, if you are committed to helping junior through university, it’s a lot easier to do by saving up in advance than trying to pay it out of cashflow at the time. Then if you end up having to power-save through the last decade and a half of your career for retirement, well, that’s the boat lots of people end up in.

    In Canada it’s further complicated by the fact that the CESG in an RESP is often an even bigger gift than the TFSA or RRSP, so if you’re committed to paying for your kid’s university, you may as well prioritize the RESP. And if you’re low income, you get bonus matching grants on the first few hundred you contribute.

    • save. spend. splurge.

      You can also switch your RESP contributions into your RRSP (rolled over if you have free room) if your child doesn’t use all of the money.

      So it’s really not that bad to prioritize RESP saving of at least $2500 a year to get the matching grants. Above and beyond that, you might as well pay your mortgage / save for retirement.

  • Debt and the Girl

    Taking care of your health is so important. So many people ignore this and end up paying for it later on down the line. I am trying to get better with this and I am by no means perfect.

    • save. spend. splurge.

      I have a problem paying for things like my health but .. it makes no sense to NOT do it, so I’ve been trying to keep that in mind (hence why I got Invisalign braces)

  • Morgaine

    I think 10% is a good starting point, especially if you aren’t a natural saver, and of course making it automatic. I think the best thing to do is to increase that % every year, if you get a pay increase, great but even if you don’t, just increasing your saving % by 1% every year will be painless in the short term but would get you to 15-20% of your income fairly easily and save you from having to go from saving nothing to saving 30-40% because you’re coming up to retirement and have no savings.

  • Kassandra @ More Than Just Money

    Being that I am nearing my forties and started in my mid-thirties to seriously save for retirement, I would say that for those who are in their twenties/early thirties, please take everyone seriously who tells you to invest for retirement – whatever you can! In this instance, you will really thank yourself that you had the good sense to listen to them a few decades from now.
    I also think that parents should take care of their retirement in priority of funding their children’s educational needs. Canadians should try to take advantage of the RESP if they can afford to.

  • Alicia

    I’m doing okay considering my situation. But I’m only 28, so I have another two years to really crack it out of the ballpark 😉 Even with paying down my debt, I’m still putting about 14% into my retirement accounts (mandatory through the company, and also includes a hefty match). I’m focussing on RRSPs right now, and then when I get refunds they will go to the TFSA (assuming my debt is gone).

    I have the game plan, it’s just a matter of getting through the debt first.

  • Charles@gettingarichlife

    Max out all retirement accounts as 5 to 10 percent isn’t enough. Don’t bet against the markets as the market always goes up. That’s why there are no wealthy long term short sellers.

    Once your retirement breaks six figures buy a few high growth individual stocks, 1 or 2 winners will cover any losses, hold on for the ride long term

    If you’re going to save for your children’s education don’t do it until you max out all retirement accounts. Save for their education in a Roth IRA which doesn’t count against financial aid, while a 529 does

    • save. spend. splurge.

      It would be nice for people to max out retirement accounts for sure, but for many people this is not feasible. Saving 18% is a big chunk and if you don’t earn a lot to begin with, 18% is everything.

      I do agree with not saving for your kids over yourself. This is definitely something I agree with.

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