Saving for retirement is crucial even at a young age, because the earlier in your career you start funding a nest egg, the more opportunity you'll have to grow your contributions into a larger sum. Thankfully, a substantial number of millennials are actively taking steps to set money aside for the future, with 42% of households headed by someone under the age of 35 having a retirement account.

How much are younger savers socking away? Of those who are saving, the average household led by someone under 35 has $32,500 already earmarked for the future, while the median retirement plan balance for households led by adults under 35 is $12,300. And while these figures are no doubt encouraging, it's hard to overlook the fact that the under-35 set can, in fact, do better.

Young couple taking a selfie outdoors.


Time is on your side

The benefit of being relatively young is having a lengthy savings window to fuel your money's growth. Remember, when you fund a retirement plan, you're not just setting money aside and letting it sit there. Rather, you're investing that money (or at least you should be) so that it grows into a larger sum over time.

What sort of return can you expect on your money? While there are certainly no guarantees, the stock market has historically delivered about an average annual 9% return. Let's be a bit more conservative than that and assume that younger workers today can expect an average yearly return of 7% on investment. If that's the case, here's the sort of lifetime growth you might be looking at in your nest egg, depending on the age at which you initially begin saving:

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










As you can see, giving yourself a 45-year savings window means you have the potential to turn $162,000 in retirement plan contributions into over $1 million. But the longer you wait to start saving even a modest sum, the less growth you stand to achieve.

Now let's revisit what under-35-year-olds have in savings. Though the average retirement account balance is $32,500, the median balance is only $12,300. And when you have a median that's well below the average, it means that more people have less than the average than those who have more.

Of course, one key missing piece of data here is a further breakdown by age. Right now we know that households led by adults under 35 have a median savings of $12,300, and while that's troublesome for folks in their early 30s, it's actually pretty on track for those in their early 20s. But what we do know is this: The typical worker nearing 35 should, ideally, have more than $12,300 socked away for the future.

So how can you go about ramping up your retirement plan contributions? First, take a look at your budget, cut some corners, and save the difference. Reducing your spending modestly could free up a few hundred dollars a month that can serve as a welcome addition to your IRA or 401(k). Next, look into getting a side hustle, even if you're already managing to keep up with your bills. Of the millions of Americans who work a second gig, 14% do so for the express purpose of being able to save for retirement, and there's certainly nothing wrong with that.

Finally, make a habit of saving your raises. If you immediately send your extra cash into your IRA or 401(k), you won't be tempted to spend it elsewhere.

One final thing: Let's not forget that while the average saver under 35 has $32,500 set aside for retirement, 58% of workers in that age range aren't saving anything at all. And if you're one of them, you'll need to change your habits immediately if you want the opportunity to retire comfortably down the line.