How Can We Plan Our Retirement in Our Twenties?

Basically any reading on the topic of retirement emphasizes the necessity of visualizing what we want retirement to be so that you can set a goal for a certain amount of savings/passive income to achieve by retirement age.  I totally understand the utility of this exercise for 1) actual planning for people approaching retirement (in their 40s or 50s, say) and 2) motivation for young people to start saving (aggressively).


But, really?  I don’t know about you, but Kyle and I don’t have specific dreams for our golden years.  That’s 40+ years away!  But I don’t see exceptions for very young people in this visualization mandate (for example, Imagining Your Retirement by a 20-something blogger ).  And even if you have one or two specific ideas about your retirement in your 20s, you have no way to predict how much your lifestyle will change by the time you reach striking distance of retirement (unless you have an ultra-early retirement).


Here are things that I don’t know about my life yet:

  • where we’ll live most of our life – we’re hoping for CA, but we’re not there yet
  • what our careers will have been – aren’t we supposed to change them like 6 times?
  • if or how many children we will have, and where they’ll end up living
  • if Kyle will be alive
  • what diseases/medical care we’ll need
  • our life expectancy – I heard a talk about 7 years ago wherein the speaker claimed that if members of the audience lived through the next 10 years, they might never have to die. THAT’LL throw a wrench in your calculations.
  • if we’ll have already been to the few worldwide travel destinations I’d like to hit
  • what the government/tax structure will look like, including Social Security
  • how climate change or efforts to mitigate it will affect our geography and lifestyle – e.g. perhaps flying will be prohibitively expensive


I have some random ideas about what I’d like to do in retirement, but they don’t really shed much light on the amount of money we’ll need.  Being near our (grand)children would probably be nice, but that’s sort of up to them.  Maybe travel would be cool, if we are physically able, but it would probably be a better idea to do that when we’re younger.  When I was a kid I wanted to own a beach house, but I don’t think I want that any longer now that I know a bit more about insurance.  I’d like to be involved in our community serving others and mentoring – but again, no specific price tag tied to that, especially since we don’t know where that will be.


These uncertainties don’t prevent us from saving aggressively for retirement.  If nothing else, I want us to have options, and saving early helps a lot with that.  I just really struggle with the command to visualize and the need to have some kind of target number(s).  I wish I knew more, but the destination is just so far away it’s quite fuzzy!  We’re saving as much as we reasonably can now, and that’s going to have to be enough.


What do you imagine your retirement to be?  How many components of your life have been settled already?  How do you take into consideration the medical and even geopolitical changes you might experience?  Are you comfortable saving into uncertainty?


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24 Responses to "How Can We Plan Our Retirement in Our Twenties?"

  1. People have been saying have been predicting that Kurzweilian immortality is only a decade away for at least 20 years. But leaving aside the question of whether it is possible, the question remains what stage of life would be extended forever. I wouldn’t want to be 70 forever. But if I could indefinately extend being 40, then there is absolutely no need to even think of retirement, because I would be fit and healthy enough to work my entire life.
    Edward Antrobus recently posted..Oportunity Cost: Do You Pick Up Change?

    1. Emily says:

      I agree. But if it turns out that our elderly years are the ones that gets extended, think of the medical costs! While it would be ideal to retain our health and ability to work, would you always want to? Would you want to take mini-retirements? That would still be worth saving for.

      1. My point about which stage gets extended was that if I had the option of being 70 forever, I wouldn’t take it. I’d let myself age naturally instead of extending the lifespan of an obsoleted system.

        I doubt I would take mini-retirements. Taking a lot of time off just isn’t my style.
        Edward Antrobus recently posted..3 Job Search Tips for Recent Grads

        1. Emily says:

          I think it would be hard to pass up available medical interventions, even as quality of life decreases. I hear about that a lot from my friend who is becoming a geriatric physician.

          1. I’m a big quality of life advocate. I still don’t have my will made out(!), but I do have a a living will in place directing that I do not want to be kept on life support. But I do agree that there can be a fine line between routine medical care and the kind of care that I would refuse.
            Edward Antrobus recently posted..Oportunity Cost: Do You Pick Up Change?

  2. Modest Money says:

    I completely agree that it is so tough to plan that far ahead with all the uncertainty. It’s actually a point I addressed in a tv interview a a little back. Personally I think early on you just need to save as much as you can. As you age your plan will start to become more clear and you can actually layout a more detailed estimation of how much you’ll need. Of course, the more you can save the more options you will have.
    Modest Money recently posted..End of August 2012 Blog Update

    1. Emily says:

      Glad to hear from someone else saving in the face of uncertainty! I figure things will get more clear once we know how many kids we’ll have, and then later with what our careers/lifestyles is in our 40s and 50s.

  3. Michelle says:

    It’s definitely hard to think about retirement. We’re only 23, but we do know that we want to retire in our 40s, preferably somewhere near the beach.
    Michelle recently posted..Should you get an Internship?

    1. Emily says:

      That two-decade timeframe is definitely easier than the 4-5 decade one! I thought you lived in the Midwest – which beach do you want to end up at?

      1. Michelle says:

        We’re really thinking about Hawaii. I know, I know, a lot of people say that 🙂
        Michelle recently posted..Should you get an Internship?

        1. Emily says:

          That’s crazy expensive though! What’s your plan to sustain that lifestyle? I’ve never been to HI but my husband has and he loved it. He really wanted to go there for our honeymoon but I thought the time changes weren’t a good idea for right then.

  4. You raise a point that most people forget about: We have no idea what the world (let alone our individual lives) are going to be like in 40 years! The dollar could crash tomorrow and the entire economic landscape of the US (and the world) would be totally changed.

    But anyway, I guess all we can really do is continue to work and save. I don’t think putting a specific number goal by x date is a good idea while you are still in your 20s. I prefer shorter benchmarks like “have $50k in retirement savings by age 30” or “have $50k in emergency funds by 27.” Seems more realistic than visualizing what your life will look like in 40 years.
    DC @ Young Adult Money recently posted..Blowing Money at the Minnesota State Fair

    1. Emily says:

      I rather put away those apocalyptic(-for-the-US) predictions as being rather slight in possibility, but the medical and environmental ones I feel are almost certain to have radical changes over the next half-century. I agree with you that all we can do is save! I don’t have short-term goals set like you mentioned because I prefer input-based goals (i.e. save 15% of gross, and the outcome relies on whatever the markets do).

  5. Jessica says:

    One concept I find really interesting to think about is mini-retirements spaced throughout one’s life. So, work for ten years after college, take two years off to travel, work for fifteen more, take four off to go back to school and learn a new skill, work more, be a beach bum, etc.

    I think that it’s really scary to think about completely retiring and living on dwindling savings until I die. I don’t want to die, but I also don’t want to outlive my money!

    Thank goodness I’m still in my twenties, too, so I have lots of time to figure it out! 🙂

    1. Emily says:

      I like the idea of mini-retirements too, though I do expect to fully retire at some point as well due to health deterioration if nothing else. The thing about shorter and more proximal retirement is that you can’t use the traditional vehicles to save for them or (I would think) really capitalize on the time value of money. So to do those sorts of things you have to far outearn your living expenses. I think I (and maybe Kyle) might take a break from work while the other continues to work to pursue something else for a short time, but I rather don’t think we’ll both stop working concurrently before we’re older.

  6. Emily too says:

    I think it’s a bit silly to visualize retirement before we’ve really gotten going in our careers, or had kids. (Maybe it’s easier for people who started their careers and families at age 18 or 21.) I know the amount I’m saving now is not an amount I’ll be able to live on in the future, due to shorter term savings needs, charity, and a relatively small income, but when I’ve freaked out about that in the past my husband has just been like, “that’s insane. You have no idea what’s going to happen in the next 40-50 years, and we’re not going to die in penury because we didn’t make much for a few years in our 20s.”

    I think he’s probably right. We do the best we can and hope the circumstances we can’t predict work out well in the future. In terms of visualizing a “lifestyle,” that’s hard to do when you can’t realistically visualize what your lifestyle will be like 5 years from now (what state? what income? kids? etc.), and I think it’s maybe overkill.

    1. Emily says:

      You’re so right! With such uncertainty about the next 5 years, how can we think about 40 years? Except that eventually I want the option of not working, I guess – whereever I might live or however my family might look.

  7. Leigh says:

    I don’t necessarily know what retirement looks like, but I like having a goal to save towards. So in taking my current expenses (since they’ve been fairly stable), subtracting the mortgage and travel budget and using the 4% safe withdrawal rate on that, I need a total net worth of just over $1 million including home equity to be able to retire. I estimate that that is about 10 years away at my current savings rate.

    But the next 10 years? So much could change in my life. Even in the next 5 years, during which I plan to pay down the mortgage, so much could change. I believe that a high savings rate and paying down the mortgage aggressively won’t hurt me though.

    That said, I don’t necessarily think I can predict my retirement expenses when I’m single when I hope that I will retire married. Nor will I sacrifice my short-term travel plans for retirement, but then again, I’m not a crazy travel person.
    Leigh recently posted..Asset Allocation: Re-balancing with new funds

    1. Emily says:

      I think you’re on a smart plan for now – you have a long-term career you love in place, you have added a house to the mix, and you are not counting on future raises to have a sufficient standard of living. You’re strategizing with the extrapolation of your current state and can adjust (or radically change) the strategy as your life changes. Not knowing how the next 10 years will play out can be fun for you, I think, because you’re coming from a position of financial and career strength. I hope to follow your progress on your blog!

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  10. Money = options. The more you have, the more options you have for retirement. Good to save even when you don’t have a 50-year plan.
    Kathleen @ Frugal Portland recently posted..State of my Debts: September Check in

    1. Emily says:

      Couldn’t agree more! Although I guess the best options would be to save both in and out of retirement vehicles so that you can access the money earlier if you want.

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