saving up for retirement late in the game

If you are in your 30s, you have not missed the boat on saving for your retirement. In fact, you at the perfect age and place in your career to put into place many of the steps and systems you'll need in order to adequately save for your retirement years.

#1 Set Up That 401(k)

If you have not taken advantage of any 401(k) plan that your employer offers, now is the time to sign up. You should sign up this week if at all possible. Literally, the sooner you start saving and investing in your 401(k), the better off you will be in the long run.

To start with, as an individual, you can contribute up to $18,000 into your 401(k) per year. You don't qualify for catch-up contributions, as those are designed for individuals who are over fifty. Set up your 401(k) plan so you come as close as possible to contributing the maximum $18,000 per year. This money all comes out of your income before taxes as well, lowering your taxable income levels.

Additionally, your employer can match your 401(k) contribution or even offer bonuses in the form of 401(k) contributions. Anything that your employer adds to your 401(k) plan cannot exceed $54,000, including the amount you contribute. This is generally a non-issue, as most employers don't contribute that much to your retirement.

Keep in mind that the amount that your employer contributes or matches to your 401(k) can significantly contribute to your retirement funds and should always be taken advantage of. If you don't take advantage of your employer's 401(k) match, you are literally volunteering to be paid less money.

#2 Create A Roth IRA

Next, you should also set up a Roth IRA outside of your workplace. With a Roth IRA, you have to contribute the money after you pay your taxes on the money, so it will not lower your taxable income. However, when it comes time to take this money out when you reach retirement age, you will not be taxed on this money or the return that you made on it.

You can't contribute a significant amount to a Roth IRA. Currently, you can just contribute $5,500 into your Roth IRA. However, if you do that for the next three decades and make a small return on your investment, your Roth IRA contributions can make up a significant portion of your income, tax-free, when you retire.

However, it is important to note that there is an income cap on being able to contribute to a Roth IRA that varies based on if you are single or married and changes from year to year.

Setting up a 401(k) and a Roth IRA, and maxing out your contributes to them each, would would equal $23,500 from your personal income, $18,000 before taxes for the 401(k) and $5,500 after taxes to your Roth IRA. Making these yearly contributions, or as much as you can, will help you greatly build your nest egg over the next thirty years. 

Contact a retirement planning professional for additional information and advice.