How To Prepare For Retirement When You’re in Your 20s

Updated: November 3, 2023

It’s common for me to receive messages from people asking for personal finance advice. Most of the time, their questions are about my thoughts on specific investments that they’re considering.

But once in a while, I’ll get something quite unexpected, such as what I received a few days ago.

From Mr. C
Hi, Sir Fitz. I’m a new follower of yours. Nag-e-enjoy po ako sa mga videos ninyo sa YouTube.

I’m writing to you because I’d like to ask, paano po ba mag-prepare for retirement? Lagi ko po kasi naririnig na you should prepare for retirement as early as possible. Kaya gusto ko po ito gawin.

I’m now 24 years old and working in a manufacturing company. Single and still living with my parents.

Ano po ba ang tips niyo for me? Thank you.

The email is quite unexpected because I can’t ever remember anyone in their 20s asking me about retirement planning.

In most cases, it’s someone in their 50s or who’s about to retire soon who’d ask me this question.

That’s why this message stood out that day as I was going through my inbox. And this, below, was my reply.

How To Prepare For Retirement When You’re in Your 20s

It is indeed important to plan and prepare for your retirement as early as possible. Recognizing this truth is essential if you want to achieve a comfortable future.

If I can be honest, my concept of retirement has drastically changed through the years.

In my 20s, when I was still working in the corporate world, I saw retirement as that age when I can finally quit my job and start enjoying life. A time when I can travel, spend time with family and friends, and live quietly away from the city.

This is what retirement looks like as portrayed in movies and television, and the retirement that I believed for many years.

But that has changed.

I believe my perspective about retirement shifted whenever I would read stories about rich people who, despite their wealth, would still be working.

There’s Oprah Winfrey, who’s still working as the current CEO and COO of her own network. Bill Gates, who still works as Chairman for several companies. And even Warren Buffet, who at 90 years old, is still the sitting CEO of Berkshire Hathaway.

Years ago, I would have thought these people are crazy because if I were a billionaire, I’d surely just spend my time traveling, watching movies, and playing video games; and definitely not running and managing a company.

So, I thought to myself, I must be missing something.

Then one day, in my search, I discovered a new definition for retirement. And that is that time in your life when you don’t need to work anymore, but still choose to work because it gives you a sense of purpose.

Thus, retirement for me is no longer defined by age. It’s not anymore the time when you become 60 years old.

Rather, it’s when you reach that point in your life when your perspective shifts away from working for survival and towards experiencing self-fulfillment.

So, how do you prepare for retirement while in your 20s? Here are some tips:

Be curious
Nurture a growth mindset. Try and learn new things every now and then. Be curious about the world around you. Because this is how you’ll discover your passion, which can then lead you to discover work that will give you a sense of purpose in life.

Manage your finances
Learn the habit of saving. Avoid going into bad debt. Be sure to always spend less than what you’re earning. When your finances are well-managed, you’ll have more time and energy to focus on things that make you happy and fulfilled.

Invest regularly
We don’t know what the future holds, but one thing is for sure, you’ll need money along the way.

Be sure to invest a portion of your income today, so that when that time in the future comes, when you stumble upon work that gives you purpose and self-fulfillment, you’ll be financially secure to seize that opportunity.

Time is on your side

It’s important to plan and prepare for retirement as early as possible because finding your life’s purpose is a journey.

Time is on your side when you’re in your 20s because you can still afford to try many different things and make lots of mistakes. You can explore, you can be adventurous, you can be curious.

Moreover, any amount you can save and invest today, no matter how small, will have many years to compound and grow. This is important.

Because when you finally discover the kind of work and lifestyle that fills you with purpose and meaning, then you can confidently say YES to the opportunity and embrace retirement.

What to do next: Click here to start your financial journey with IMG Wealth Academy

One comment

  1. There is no way I may travel back in time 45 years to give younger self retirement advice. Fortunately, much of GrandMas fugalality rubbed off onto me witch has served me well. I prepared for life without Social Security so the SS check is a great bonus these days but I can certainly live without it.

    Work (as defined by most people), almost never but I did have a blast in life getting paid to do fun projects. Even very dangerous assignments offered both financial reward and some great education. Full retirement,,,,NEVER,,,I am still going strong weeknights from our home base in Bulacan scanning for option selling opportunities on the US markets. They will literally have to drag me away from the computer screen, selling premium and using part of it to support charities we hold close to our hearts.

    Thank you to some great Philippine financial blogs like Ready to be Rich, I am learning what is available for my Beautiful Bride to set her up for retirement. She has over two decades experience as an academic writer but who knows if that will continue? It is wonderful that Maria has great business ideas and we hope that some of our projects might be handed down to our young troops in the future. Still, I thought it prudent to use a selection of the great passive income ideas I have learned about to have plenty of financial cushion around my wife.

    Maria has a heart of gold and will literally give until she goes into debt helping others. That was something we had to change because, as I explained to her, there may be no one left to pick you up so NEVER allow yourself to be destroyed. These days her giving is more systematic and with our business ventures we actually have more to give than ever before.

    Again, because of great financial blogs penned by folks like Fitz, I am now aware of a variety of passive income opportunities here in the Philippines that we can add to secure my Brides future. Doing a simple thing like opening a new Pag ibig MP2 account each year for five years works just like a bond ladder. If in five years the money in account one is not needed, simply roll it over for another five years. Continue doing this year after year and rest easy knowing that the kids education is secure even if there is a loss of employment or a business failure. Nice reserve of retirement cash if the money is never needed to pay a school bill. Self discipline and planning are keys to a great retirement.

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