During your 20s, retirement is probably the last thing on your mind. After all, you're likely trying to navigate your growing career and manage your student debt.

But while retirement might seem like a topic that hardly deserves your attention at this stage of life, your 20s are actually the perfect time to start thinking about it. That's because the moves you make in your 20s could set the stage for a very comfortable lifestyle when you're older. So as you work your way through your 20s, aim to do these key things that could really pay off in the long run.

Group of young adults at a restaurant

Image source: Getty Images.

1. Start building a nest egg

Many 20-somethings are lucky enough to have money in the bank -- forget an IRA or 401(k). But if you make an effort to fund a retirement plan in your 20s, you'll have a greater chance of leaving the workforce when you want to and leading a comfortable lifestyle in the years that follow.

Thanks to the power of compounding, the longer a savings window you give yourself, the more opportunity your money has to grow. The following table further illustrates this point:

If You Start Saving $300 a Month at Age:

Here's What You'll Have by Age 67 (Assumes a 7% Average Annual Return):


$1.03 million









Data source: Author's calculations.

As you can see, setting aside $300 a month over a 45-year period will leave you with over $1 million, but at an out-of-pocket cost of just $162,000. That's a pretty impressive gain. But the longer you wait to start saving, the lower your lifetime gains will be. Furthermore, while saving $300 a month will take some effort, it's doable if you're willing to cut back on expenses and perhaps work a side side job here and there, especially if your earnings aren't yet all that substantial.

Of course, if you can manage to sock away more than $300 a month, you'll be in an even better spot financially once retirement rolls around. Currently, 20-somethings can contribute up to $18,500 a year to a 401(k) and $5,500 a year to an IRA, which means there's plenty of room to fund your retirement plan even more aggressively if you're able to do so. And, if you invest heavily in stocks, you're likely to see a 7% return on your money or better over time, since that figure is a few percentage points below the market's average.

2. Pay off your debt -- and avoid racking up more

Many 20-somethings continue to grapple with debt, whether it's of the educational or credit card variety. But paying off debt in your 20s is a good way to set yourself up well for the future, because the sooner those nagging payments stop monopolizing your income, the sooner you can ramp up your retirement plan contributions.

As is the case with saving money, knocking out debt really boils down to making choices. If you're willing to spend less and earn more by working a side gig, you can use your extra cash to eliminate your debt quickly, thereby saving yourself money on interest.

But don't just pay off your debt and leave things at that. Rather, pledge to avoid debt going forward so that your income is never tied up in a monthly payment. The only exceptions are getting a mortgage to buy a home, financing a vehicle, and taking on more student debt to pursue a graduate degree. These are all perfectly valid reasons to take on additional debt, but you'll notice that none involve a credit card balance, and that's your key distinction.

3. Fight for a raise

Earning more money offers not only an immediate benefit (having more money), but a long-term one as well. That's because Social Security benefits are calculated based on earnings, so the more money you make during the top 35 working years of your career, the more income you stand to collect as a senior.

Now you might assume that your earnings in your 20s will be lower than those in your 30s, 40s, 50s, and 60s, even if you do snag a raise. But remember, the more you earn in your 20s, the more money you're likely to command later on in your career. Furthermore, you never know when you might end up taking a break from the workforce down the line, whether to raise children or for another purpose, so the more you're able to boost your salary in your 20s, the better. And that's why it pays to work your hardest and negotiate for more money whenever possible.

Your 20s offer a great opportunity to get on the right track for retirement, and that's something your older self will be sure to thank you for.