Here are 3 things to do in your 30s to stay on track with retirement savings

Unlike younger adults, those in their 30s oftentimes have more financial responsibilities on their plate.

“The 30s can be sometimes more stressful because your responsibilities have gone up and you’re still not at your earnings potential of your 40s and 50s,” said certified financial planner Shaun Williams, partner and private wealth advisor of Paragon Capital Management based in Denver. The firm is ranked No. 57 on the 2023 CNBC FA 100 list.

Individuals in their 30s are more likely than those in their 20s to have a spouse, kids or even aging parents who rely on them. However, not everyone follows this path. Some remain as single earners or become dual-income earners with no kids — DINKs, for short.

While those life changes and choices can have a significant effect on your ability to save, experts say it’s important to keep your retirement plans in focus during this decade — or start if you haven’t yet.

“Have you done what you needed to do to build basic financial security? Have you paid off any high-interest rate debt? Are you staying out of credit card debt? Have you started saving for retirement?” said CFP Sophia Bera Daigle, founder of Gen Y Planning in Austin, Texas. She is also a member of the CNBC Financial Advisor Council.

Here are three things to consider:

You may be earning more than you did in your 20s as you’ve progressed in your career. It might be time to switch up retirement accounts.

Opening a Roth individual retirement account can be a smart call as a young worker. You won’t get a tax break on contributions, but that money grows tax-free. Not everyone qualifies to contribute. In 2023, eligibility begins to phase out for individuals with an adjusted gross income of $138,000.

In your 30s, even if you don’t earn too much to use a Roth, opening a traditional IRA may make more sense. A traditional IRA offers an upfront tax break on contributions, and you may find that’s more beneficial, said Williams.

“The tax benefits of traditional IRAs are better the higher your income,” he said. “You’re going to be better off in the long run in most cases.”

With a better income, you might also boost contributions to your employer-sponsored retirement account like a 401(k) plan. You still have decades to go before retirement, so contributing more of your income alongside the company match can make the most of time in the market and compounding.

Your aspirations may change as you get older. You may want to travel more, become a homeowner, save for a wedding or even have children. Put thought into what your new goals are and how they fit with staying on track for retirement savings. 

“My DINK clients get to talk about things like early retirement because they’re not paying for their kids’ education or child care costs. They get to talk about things like buying a second home,” said Daigle.

Meanwhile, those who become parents might find that early child care costs or saving for a child’s eventual college education come at the cost of contributions for their own retirement. 

“A parent still needs to focus on their own retirement,” said Williams. “A parent should always make sure that their retirement is healthy and sound before considering really setting up their children.”

As first-time parents begin to think about financing their children’s future education, especially college, it may be advantageous to start a 529 plan and “get on track for their kids’ college,” said Daigle.  

Those costs ought to come after you’ve paid yourself first in the form of retirement contributions and maybe cut expenses that are less pressing.

As you increase your earnings, it is easy to fall victim to lifestyle creep, or the phenomenon by which your nonessential expenses tend to rise with your income. This can be a detriment to your savings as you grow accustomed to a higher-cost lifestyle, for DINKs especially.

“A lot of people allow lifestyle creep to come in and start spending more and more,” Williams said.

If you have the ability to spend more in your 30s, it’s smart to assess your financial goals first. Make sure above all that you are on track for retirement before you splurge on discretionary expenses.

“[In] your 30s, you’re solidifying how you’re going to live your life, and that’s just going to continue in your 40s and 50s,” Williams said. “People don’t change that much once they get there.”

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