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If you're in your 30s, you've still got a great opportunity to prepare for a comfortable retirement. You're still young enough that time has a few decades to work its compounding magic on the money you invest. In addition, you've also likely established yourself well enough in your career to be able to command a salary that covers more than just the bare minimums of survival.

That's a combination you can use to your advantage to potentially retire as a millionaire -- or even better.

You don't even need Warren Buffett-like investing skills to get there, just the patience, discipline, and consistency to keep to a plan. These four tips will start you on the right path toward assuring your golden years are truly golden.

Tip 1: Make it a priority. If you start in your 20s, it's almost freakishly easy to design a retirement plan that, if you consistently execute it, gives you a strong chance of getting you to retirement with a seven-figure nest egg. If you're starting in your 30s, you still have a great shot of retiring a millionaire, but you'll either have to sock more away or earn better returns to get there.

The table below has details on what your potential future looks like, assuming you'll be saving for around 30 years until you retire:

Monthly Investment 10% Annual Returns 8% Annual Returns 6% Annual Returns 4% Annual Returns
$2,000 $4,520,976 $2,980,719 $2,009,030 $1,388,099
$1,500 $3,390,732 $2,235,539 $1,506,773 $1,041,074
$1,000 $2,260,488 $1,490,359 $1,004,515 $694,049
$500 $1,130,244 $745,180 $502,258 $347,025
$250 $565,122 $372,590 $251,129 $173,512
$100 $226,049 $149,036 $100,452 $69,405
Note: data from author's calculations.

The S&P 500 (^GSPC) has returned on average around 10 percent per year, including dividend reinvestment, over the long haul. While there are no guarantees in the market, notice how you still wind up a millionaire if you sock away $2,000 every month and only earn 4 percent over those 30 years.

With a diversified stock/bond portfolio, chances are reasonable that your total returns will likely fall somewhere in that table, showcasing just how important it is to start now and make it a priority.

Tip 2: Put your retirement ahead of your kids' college. A huge part of parenting is making sacrifices for your children's well-being and their futures. When it comes to the choice between funding your retirement and funding their college educations, though, the answer is simple: Don't put a dime toward their educations until you've got a plan in place that adequately funds your retirement.


In reality, there are a number of methods aside from writing a check that can be used to pay for college, including scholarships, loans, grants, and summer and campus jobs. On the flip side, nobody will loan you money to cover your retirement -- with the possible exception of a very expensive reverse mortgage on your house. On top of that, Social Security, the government's safety net for retirees, is on track to run out of cash and slash its benefits by about 25 percent within the next 20 years.

If you want to think of it in terms of helping your kids, consider this: If your retirement is covered, you won't be a financial burden on them as they're working hard to raise their own kids. Also, by the time your kids reach college age, should you find you're ahead of schedule on saving for your retirement, you can always divert some of your retirement money to help their educations.

Tip 3: Maximize the 'free money' you get. If your job offers you matching funds for contributing to your 401(k), 403(b) or other retirement plan, contribute at least as much as you have to in order to get the most from your match. Even if your plan's options and costs aren't the greatest, the match is extra money that can help overcome the drag from an otherwise less-than-ideal plan.

Additionally, all qualified retirement plans, including an IRA as well as a 401(k) or 403(b), come with tax benefits attached. They'll all let you defer taxes on gains and income in the plan until retirement. Traditional plans typically also offer a tax deduction for contributing, and Roth-style plans allow for completely tax-free qualifying withdrawals for retirees. Those tax benefits can help your money go further by reducing the friction costs you'd otherwise face while trying to build your nest egg.

Tip 4: Don't be afraid of stocks. It may seem like it's not a good time to invest in the stock market. However, it almost never looks like a great time to invest.

The reality is that if you're in your 30s, you still have decades of time to let compounding and the smoothing effects of dollar-cost averaging work their combined magic. There are no guarantees in the market, of course, but once you get your plan in motion, you'll be amazed at how much better off you'll be than had you never started in the first place.

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In your 30s, time still works in your favor when it comes to preparing for your retirement. But to keep time as your ally, you need to put a plan into action sooner rather than later. By following the four tips outlined above, you can put yourself on a track to make your golden years truly golden.

Motley Fool contributor Chuck Saletta has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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