When you’re early in your career, retirement can feel like an abstract idea reserved for some distant version of yourself. But the choices you make in your 20s often carry more weight than any decision you’ll make later—because time is your greatest financial asset. Start now, and compound growth does much of the heavy lifting for you.
Unfortunately, confidence about retirement is slipping among Americans. According to the 2026 Retirement Confidence Survey from the Employee Benefit Research Institute and Greenwald Research, just 61% of people feel sure they’ll have enough to live comfortably in retirement—down from 67% in 2025 and the lowest reading since 2017.
The good news? If you’re in your 20s, you have a rare window to get ahead. Here are six smart money moves that can transform your financial future.
1. Just Start Saving—Even a Little
The single most powerful step is also the simplest: begin. The exact amount matters far less than the act of starting while time is on your side.
“A lot of times people will be so afraid of doing the wrong thing that they do nothing,” says Kevin Shuller, CFA, CFP, founder and chief investment officer at Cedar Peak Wealth. Taking any action—no matter how small—builds momentum and confidence.
The data backs this up. Workers who participate in a retirement plan are more than twice as likely to feel financially secure about retirement (70% versus 32% of non-participants), regardless of how much they contribute.
2. Grab Your Full 401(k) Employer Match
For most young professionals, the workplace 401(k) is the natural starting point. “For a lot of people, just participating in the 401(k), if your employer offers it, gets you most of where you need to go for your 20s,” Shuller notes.
There are two big advantages. First, contributions come straight out of your paycheck, so you never miss the money. Second—and most importantly—many employers offer a match, which Shuller calls “free money.”
Say your employer matches 100% of your contributions up to 5% of your salary. By contributing that 5%, you effectively double your yearly deposit before any investment growth even kicks in. You may not be able to max out your annual limit in your 20s, but contributing enough to capture the full match should be a top priority.
3. Open a Roth IRA While You Still Qualify
A Roth IRA is a tax-advantaged account that can either supplement your 401(k) or serve as your main retirement vehicle if your job doesn’t offer one.
“Roth IRAs are absolutely the way to go, especially for younger people,” says Stephen Dissette, investment advisor representative at Horter Investment Management.
Here’s why timing matters: Roth IRAs have income limits, so as your earnings climb later in your career, you may become ineligible. Contributing while your income is lower locks in the benefit. Because these accounts aren’t tied to an employer, you can open one even without a full-time job or workplace retirement plan.
With a Roth, you contribute after-tax dollars, your money grows tax-free, and qualified withdrawals in retirement are completely tax-free—unlike a traditional IRA or 401(k), where you’re taxed on withdrawals. You don’t need to max it out; just start.
“With a lot of IRA providers, you can set up an automatic $20 a month going into the IRA,” Shuller says. “That’s just one meal that you’re not eating out per month. The idea is to start, no matter how small it is, just to get in the habit.”
4. Build an Emergency Fund
An emergency fund isn’t a retirement account, but it protects your long-term goals. A solid savings cushion keeps you from racking up high-interest debt—or raiding your retirement accounts—when unexpected expenses or income gaps hit.
Experts generally recommend three to six months of living expenses stashed in a high-yield savings account. Reaching that target takes time, so contribute what you can in the meantime.
“You can put small amounts away,” Dissette says. “I’m not talking crazy numbers… I’m talking about $25, $50 a pay period or a month.” Better yet, you don’t have to choose between short-term and long-term savings—fund both. “It’s about getting in that right mindset.”
5. Tackle High-Interest Debt
Credit card balances are a growing hurdle for young Americans. As of 2025, Gen Z carried an average credit card balance of $3,493, according to Experian.
Paying down debt won’t directly boost your retirement balance, but it frees up cash otherwise lost to interest. The confidence gap is striking: 85% of Americans without debt feel at least somewhat confident about retirement, compared with just 32% who describe their debt as a “major problem.”
The math usually favors eliminating high-interest debt first. “If you’re paying 25% on your credit card debt, there’s basically no investment that’ll make up for that,” Shuller explains. “So credit card debt needs to be paid off before you start thinking about investing.”
6. Balance Debt Payoff With the Savings Habit
Even while aggressively paying down debt, don’t abandon saving entirely. “There’s a tremendous amount of value to building the saving habit,” Shuller says—”even if it is just $20 a month.”
The dollar amount is secondary to the discipline. Establishing the routine of setting money aside now makes it far easier to scale up your contributions once your debt is gone and your income grows.
Frequently Asked Questions
How much should I save for retirement in my 20s?
There’s no single magic number, but a great starting goal is to contribute enough to your 401(k) to capture your full employer match. From there, aim to save around 10–15% of your income over time, increasing contributions as your salary rises.
Should I pay off debt or invest first?
High-interest debt—like credit cards charging 20–25%—should generally be paid off first, since no investment reliably beats those rates. That said, contributing a small amount to retirement simultaneously helps build a lasting savings habit.
Is a Roth IRA better than a 401(k)?
They serve different purposes. A 401(k) with an employer match should usually come first for the free money. A Roth IRA offers tax-free withdrawals in retirement and is especially valuable for young earners who may exceed income limits later. Many people benefit from using both.
How big should my emergency fund be?
Experts recommend three to six months of essential expenses kept in a high-yield savings account. Start small—$25 to $50 per paycheck—and build gradually.
The Bottom Line
Retirement may feel decades away, but your 20s are the most valuable years for building wealth. You don’t need a large salary or perfect financial knowledge to get ahead—you just need to start. Capture your employer match, open a Roth IRA, build an emergency cushion, chip away at high-interest debt, and above all, make saving a consistent habit. Small, steady steps taken today can grow into the financial security your future self will thank you for.