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For many Americans, especially young adults who are new to the workforce, planning for retirement feels like a later-life concern. In reality, the financial decisions made in a person’s 20s and 30s — such as when to start investing, what goals to prioritize, and how to think about risk — are quietly shaping retirement security decades before it even begins.
Choosing when to invest is one of the most important factors influencing your retirement security. The best time to start building retirement savings is after your first paycheck. Starting that early allows you to maximize how much time you have to save and how much time those dollars have to grow, thanks to compounding interest. It’s not only about how much you contribute, but also when you start contributing.
Make Retirement Investing a Priority
In our 20s, 30s, and even 40s, life is busy. During this time, many of us are building or advancing careers, getting married and starting families, or making large purchases such as homes and cars. But these factors alone don’t disrupt retirement; the way they’re prioritized does.
For example, purchasing a car or moving to a new city may be essential to maintain employment. But in cases where public transportation or remote work is available, directing those funds toward long-term investments may be more beneficial for your retirement future.
Retirement security depends on how well these major life milestones are balanced against consistent long-term saving. However, investing as early as possible and strategically prioritizing major life events can be undermined by one overlooked variable: longevity.
Long Lives Complicate Planning
Americans are living much longer today than previous generations did. While longer life expectancies are great, they complicate the retirement-planning process. The longer someone lives, the longer they are exposed to market volatility, increasing healthcare costs, and inflation.
For example, a retirement plan built to last 20 years will have very different withdrawal strategies, asset allocations, and exposure to inflation compared to plans built to last 30 or 40 years. Living longer introduces new risks like long-term care risks, but it also magnifies existing ones.
A secure retirement is shaped over time by early investment habits, disciplined prioritization, sound advice and wisdom, and a clear understanding of longevity risk. When retirement is viewed as a lifelong path — rather than a distant milestone — it allows you to approach each financial decision with more intention and long-term perspective.
Roland has been in the San Francisco Bay Area for over 40 years. He is currently Partner at Optura Advisors, an investment advisory firm which specializes in evidence- based financial planning utilizing data science and advanced strategies through its family office network. He is also investor, advisor, and strategic partner to several fintech startups and hedge funds. Roland has been in the high-tech industry for over 16 years. He was formerly the youngest founding board member and investor at Tri-Valley Bank (acquired by Heritage Bank).
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Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
