SURVEY SAYS: When Did You Start Saving for Retirement?

March 17, 2011 ( - Yesterday we reported on a survey about when respondents in various generations started saving.

This week, I asked readers – how old were you when you started saving for retirement?  Sure, this is a group one might expect to have started saving early – but all of us weren’t always in this business.  So, you might be surprised at the results: 

A clear plurality – 46.1% – said they started saving for retirement before they were 25, which is about the period when many are entering the full-time, post-collegiate workforce for the first time.  That said, the second most cited response was the quarter (25.5%) who said they started before they were 30. 

The next most common response was from those who started saving before they were 35, 27.7% of this week’s respondents. 

Just under 6% started before they were 21, and another 5% did so before they were 18. 

About 3% were in the before I was 40 camp, and the final 2% said they started before they were 45.  

Now, there were some interesting stories to go along with these results, and I hop you enjoy perusing them on the pages that follow:

Before we get started, I always forget that our readership includes people for whom math and/or precision are something of a lifestyle choice.  So, despite the options provided, I did get the following “clarifications”;

It says BEFORE i was 25....I WAS 25. Picky picky picky. 😀

27 actually

Here’s the rest:

I was divorced at age 30, so that is when I took control of my money.  My ex knew he would inherit a ton of money, so saving wasn't important to him.

Unfortunately I did not really start to save until I started in this industry.   Before then I worked for a company that had a plan but did not market it at all.   They mentioned it in the employee handbook, and if you wanted to sign up, you had to go ask for the paperwork.   And before that I worked for a bunch of companies that did not have any plan at all.   If I could change something, I would go back and start an IRA in my teens.

My father began investing in the "new" 401(k) at his company in the early 80's and encouraged me to start saving as soon as I could.  In my first official job after college, I did enroll in the 401(k) but at a very small amount and when I left that company, I rolled over that small balance of $300+ to my next employer.  I guess I've been a retirement geek for a long time.

Even though I started saving relatively early, I wish I had saved MORE from the beginning!

Go Team!!!!! My daughter got her first job at Build a Bear.  She was 16.  She has a Roth IRA. Too bad everyone does not think about saving for retirement.  There will be no Social Security when I retire and my daughter will wonder what that ever was when she retires.  Pension Plans?  They will be a thing of the past as well, most employers do not offer them now.

I was an automatic enrollee in our profit sharing plan when I was 20.  Previous to that we were given a choice between a cash bonus or getting a profit sharing contribution.  I always picked the "cash" option but after 3 years the Company President decided after 3 years service employees would be automatically enrolled in the profit sharing plan.  I am thankful that the decision was taken out of my hands because I have been at the same company for over 38 years.  He was a great man and it was so much better that the choice was taken out of my hands back then when I was sweet & innocent & just 20 years old.

I was 28 when I had my first opportunity to participate in a 401(k) plan and joined as soon as I could.

As I recall my history, Section 401(k) was added to the Code in 1978, and the regs on it came out in 1981, so those plan types started proliferating in the early 80's.  Before then "saving for retirement" meant a passbook account that you told yourself you wouldn't touch except in emergencies.  I will aver that I had one of those passbooks, but have no idea what happened to it.  So, I guess I started when I first became eligible for a 401(k) back in 1982.  At that time, I made $15,000 per year, and I saved $900.

At age 25 I started working for a company that put in 15% of your salary every year as a contribution to the profit sharing plan.  That lasted for about 10 years (didn't make much money back then, but it was free savings for retirement).   Now we have a 401(k) and I am old enough to make catch-up contributions and the matching is very generous.  I think I will work a few more years.

Just a year or two after IRAs first became available.

Despite starting a 401(k) in my 20s, life circumstances in my 30s resulted in the unfortunate need to dip into my 401(k) for loans.  Although I'm back on track, I missed out on at least $50K just by losing interest.  My advice for my kids is to never, ever dip into the 401(k)!

"Worryless Retirement will be, at best, elusive for most everyone. I believe that unless Government stops being so socialistic, they will regulate and water down retirement benefits out of afforable existance. In the past retirement was greatly aided my home values. Our parents would but a house for $30,000 and the value would rise and then they would sell that same house for between eight to nine three times what they paid for it. They were additionally aided by their DB plan and some what by Social Security.

Those options no longer exist in any frequency or amount. We are in trouble."

I am old enough that the first retirement plan I was eligible for through my employer was a defined benefit pension - so I had no choice.  I don't know if I would have been astute enough to forgo take home pay voluntarily when I already felt poor given my entry level earnings.

Would have started before but the first company that offered a 401k was when I was age 29.

When I started my first "real" job, my employer put in a profit sharing contribution but did not match voluntary contributions. So, I saw no need to make any (other than the excess flexible credits which amounted to much less than 1% of salary). It took me 5 years (and lots of money lost in the stock market) plus seeing a younger employee defer 10% of his pay upon starting employment to convince me to make the jump. 

Only because I started in this business in 1977 and we were allowed to contribute post tax employee funds in our plan.  Of course it was custom drafted in those days.  20% of the Employer Contribution was only allocated to employees who saved.  The remaining 80% of the Employer Contribution was allocated to everyone.  Most people didn't contribute their own funds, so my 20% was usually more than the 80% each year.

But I was a starving journalist before that and then I was in law school.

I would have started contributing to my 401(k) a year earlier but at that time (1982) there was a one year of service requirement before you could participate.

My favorites were:

My husband and I started retirement savings when we both put $500 into IRA CDs after we got married in mid 80s.  We used Citibank as I told my husband, "It's Citibank ... it will always be there!"

Parents taught me simple budgeting (including a savings/retirement aspect) from the day I had my first part-time job.  That simple split of money earned into various "buckets" philosophy  has continued to present day (although the "buckets" have changed in number)! 

I remember how my first work-world mentor convinced me. He said, "You can't spend what you can't see and you don't miss what you don't have."

I had the good luck to begin my professional career in the Benefits Department at what was then Standard Oil Co. of California - now Chevron.  My boss led me to believe that participation in the company's profit sharing and savings plan at the maximum permitted contribution level was a condition of employment.  A little old-school paternalistic strong-arm tactic that I thank him for every day.

But this week’s Editor’s Choice goes to the reader who said, “I started immediately after a meeting in which the CFO questioned why he hired one of his financial analysts who said he wasn't participating in the company's thrift/savings plan (this was pre-401k).  The plan had a dollar for dollar match up to 8% and the CFO said if his employee was willing to forego a 100% return on his contributions, even if he had to borrow from a bank to do it, he shouldn't be working for him.  In 35 years, I have never contributed less than the minimum needed to obtain the maximum match available in all the plans I have participated in...the lesson was not lost on a new employee to whom it was not directed.”

Thanks to everyone who participated in our survey!