Saying goodbye to your 20s and hello to your 30s might mean making some slight adjustments to how you manage your money on a daily basis. That can include putting saving for retirement on your financial to-do list. If you’re a 30-something saver, there are several retirement planning mistakes you’ll likely want to steer clear of when you’re in the process of building your nest egg.
1. Succumbing to Lifestyle Inflation
Once you hit your 30s and get settled into a career, you may see your income start to climb steadily. Having extra money in your paycheck is great but it can be a problem if you squander it. Instead of using every pay raise as an excuse to step up your spending, it’s best to view it as an opportunity to increase what you’re setting aside for retirement.
Even if your raise is only in the 1% to 2% range, those extra dollars can make a big difference in the size of your nest egg. The easiest way to put it to work is to increase your contributions to your employer’s retirement plan every time you get a raise. That way, there’s no temptation to spend the money since you’ll never see it in your paycheck.
2. Paying Too Much in Investment Fees
Whether you’re watching your retirement savings grow in your 401(k) or you’re saving money in an IRA, you can’t afford to let fees get out of control. If you’ve put your contributions to your employer’s plan on autopilot, for example, you may not even be aware of just how much you’re paying.
You don’t have to be an investing expert to get a grip on the fees. If looking at the different numbers on the fee schedule makes your head swim, it’s a good idea to zero in on the expense ratio. This is the percentage of your investment that goes toward fees. A higher number means that more money is leaving your account to pay fund managers.
3. Being Clueless About What You Need to Save
Saving your way to a comfortable retirement starts with having some clear goals on how much money you’re going to need. If you’re just picking a number out of thin air without doing any research, there’s a chance you might end up with an income shortfall once your retirement rolls around. Plugging your information into a retirement calculator takes just a minute and it can give you an idea of whether you’re on the right track.
4. Thinking You Have Plenty of Time
When you’re in your 30s it can be hard to wrap your mind around the concept of saving for an event that could be decades away. The problem with that kind of thinking, however, is that it’s easy to fall into the trap of believing you have an indefinite amount of time to prepare for retirement.
In reality, waiting to start saving can make it hard to catch up later on. Instead of setting aside 10% or 15% of your income now, you might have to save 20% or 25% if you wait until you’re 40 to end up with the same amount at retirement.
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Start Small If You Have to
You’re not doing yourself any favors if you put off saving because you think you have to throw hundreds of dollars into your retirement account each month. Socking away $25 or $50 each pay period may not seem like much, but it’s a step in the right direction.
This article originally appeared on SmartAsset.com.