Just Started Working but Already Dreaming of Retirement?


Oh, retirement. Those golden sunsets, cabana chairs, endless Mai-Tais and SPF 1000 on your wrinkly, age-spotted skin. Or maybe not. Millennials have different expectations for retirement than previous generations. For all our faults, millennials are outside-the-box thinkers and this extends to retirement. 


Some of us want to retire early, like super early. Retire by 40 is practically a movement and more and more millennials are focused on generating passive income streams. And then there are the millennials who don’t ever plan on retiring. Whether this is based in practicality and they don’t think they’ll ever be able to save enough (they are wrong, btw), or a desire to follow their passions and continue working throughout their lives, there are many of our generation who aren’t picturing retirement at all. 

Automate, automate, automate. We really can’t recommend this enough.

There’s another subset of millennials who are rethinking the concept of retirement altogether and planning mini-retirements/sabbaticals throughout their lives. Think of this like that post-college Europe trip, but in your mid-30s and for a couple years, and probably in South America where you can live in a villa on the cheap. 


Regardless of your particular retirement dreams, here are some factors you should consider as you start wondering “how soon can I retire?”


How Much Do I Need To Retire? 

Our least favorite question at Stash Wealth is “How much do I need to save for retirement?” Not only is it a super boring question, it’s just the wrong one. We want to shift the mindset away from a set number, and on to a more complex understanding of what retirement might look like. 


There is no one set number of how much you need to retire. However, if you’re picturing any kind of conventional retirement at the “end” of your life, you’re going to need more than a million dollars


That can seem like a huge amount, particularly if you’ve only just started saving. Don’t panic. We find that our clients actually over-save for retirement early on. How much you need to save and when you need to save it by depend on a lot of factors. There isn’t a single number, and any article or financial advisor that tells you there is can go live in the Big Brother house for the rest of eternity, as far as we’re concerned. Retirement is not one-size-fits-all, and it is important to acknowledge that. That doesn’t mean you don’t need to start thinking about it now. 


Regardless of your retirement dreams, you have to prioritize saving at some point, but that doesn’t mean you have to give up everything you love in the short-term. 


What’s The Best Thing I Can Do For My Retirement Account?

Automate, automate, automate. We really can’t recommend this enough. “Set it and forget it,” is a popular money mantra and our motto when it comes to saving. If you make plans to save what’s left over at the end of every month, but somehow don’t ever have anything “left over,” automation is your new best friend. 


Find a goal of how much you’d like to save each month or payment period and automate a deposit into your savings and retirement accounts. Some 401(k) plans even allow you to set your contributions to automatically increase each year. Double automation! As long those annual increases don’t set you up to over-save. We were serious about that part, and we’re repeating it here again because most people just don’t believe us that they could possibly be over-saving until we show them the math. H.E.N.R.Y.s™ are such overachievers that they often end up over-saving for retirement and compromising the savings they could be doing for all the other stuff they care about!

If you want your money to have the potential to grow and not stagnate, don’t keep it in cash! 

Automation really works for just about everyone. The best thing you can do to an investment account is forget the password. We’re not kidding. Don’t touch it, don’t even look at it too much. Invest it and let it go. That way you also won’t be tempted to dig into that retirement account for non-retirement related goals. 


What’s The Worst Thing I Can Do For My Retirement Account? 

Not have one.
Not fund it if you have it. 

Keep your money in cash. 


The first step is having a retirement account. Once it exists, you need to automate contributions. After that, you need to make sure that you are investing that money. If you are leaving the money in cash or in a CD (certificate of deposit) you are losing money over time to inflation. If you want your money to have the potential to grow and not stagnate, don’t keep it in cash! 


Can I Borrow From My Retirement Savings? 

No. Period.


Don’t ever borrow from your retirement savings. We could put a caveat of “unless you absolutely have to” here, but that’s kinda BS. If the life-circumstance is really that much of an emergency, the question won’t matter, you’ll just do it. If it isn’t that kind of circumstance, just stay the hell away from your retirement account. 


In order to do this, you need to make sure it isn’t the only way you’re saving. If you have short-term goals like travel, a wedding, all of your friends’ weddings, buying a house, or having kids, you need to be saving and investing in accounts that are more liquid (aka easier to access without penalty or delay) than your retirement accounts.

Your short-term goals are important. Factor them in. Plan and save for them. Automate a deposit into your wedding fund, create a savings account for that trip to Iceland you’ve been planning on Insta. Plan for the fun, amazing, and wonderful life moments that are going to happen between now and your “golden years.” 


We’ve found that H.E.N.R.Y.s™ are especially prone to over-save. The not-rich-yet part of the acronym gets the better of you and you want to put away as much as you can, sometimes just to prove to yourself that you can. Not always the best course of action. 


How Will I Know If I Have ENOUGH? 

We get it, you want numbers. So here are a few goals for how much of your take-home pay should be going towards what. 



Follow the 50/30/20 Rule.


50% goes toward fixed expenses (rent, utilities, etc), 30% goes toward flexible expenses (restaurants, happy hour, impulse trips to the beach), and 20% should be saved — Split it about half-and-half between short-term goals/needs and long-term savings (aka retirement). 



Follow the 70/20/10 Rule.


70% goes towards fixed and flexible expenses, 20% goes toward paying down your debt, and 10% goes toward short and long-term goals. Once your debt is paid off, you graduate to the 50/30/20 rule. 


Note: If you want to take a couple of years off in your late 30s, maybe you need to save a bit more a bit sooner, these rules are more for thinking about retiring later in life. 


Here’s the deal: the earlier you start planning for retirement the fewer compromises you’ll need to make in your lifestyle to achieve your savings goals. You’ll def hit millionaire-status if you take a disciplined approach, hell, even semi-disciplined. 


When you’re trying to find your savings target, play around with the numbers on this calculator (and factor in a 100% income replacement if you want to keep the same quality of life). This can help you find concrete numbers to shoot for if you aren’t ready for a financial advisor. 


How Do I Know If I’m Ready For A Financial Advisor? 

Not everyone needs a financial planner or advisor. There is a lot you can do on your own to get better at money (hey, automation!). We have a quiz on our website that helps Millennials determine if they are a good fit for Stash Wealth, and whether you want to use our services or not, it can be a great test to see if you’re at the stage where you should consider seeking out a financial advisor. If you’re recommended for the Stash Plan®, chances are you’re ready to take your financial life to the next level. 

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