3 signs you won't be ready to retire in 30 years, according to a financial planner (2024)

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• Even if you have 30 or more years before retirement, it's possible that there are already some signs you won't be ready.
• If you haven't started using your employer's 401(k), or are still making the same contribution you started making several years ago, you might need to make a change to get on track.
• Similarly, if you find that your retirement income will be significantly less than what you're currently earning, it's worth adjusting your savings strategy now to maintain your lifestyle in the future.
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While it can be tough to think 30 years into the future, it's necessary for retirement planning. It takes years of saving, investing, and growth for retirement planning to work effectively and build a large enough savings to live well in retirement.

There's no set age to start thinking about retirement planning, but experts agree that the sooner you start, the better. Not only will your money grow more, but you'll also have less stress later on.

For that reason, thinking 30 years into the future is essential. Financial planner Jovan Johnson of Piece of Wealth Planning says that there are a few signs you'll want to watch out for on you savings journey — they might mean that you won't have enough savings for a comfortable retirement.

You haven't started using your workplace's 401(k), or haven't updated it recently

If your employer offers a 401(k), it's definitely something to take advantage of sooner rather than later. These retirement accounts allows contributions pre-tax, which lowers your total taxable income. These accounts can also sometimes come with a match, where an employer will essentially put free money towards your savings goals up to a certain percentage of your contribution.

But just because you've started doesn't mean your job is done. While a 401(k) grows on its own, you will need to maintain the account over time. "A lot of people assume that contributing whatever [amount] their employer signed them up to the 401(k) with as a benefit will help them retire fine," Johnson says. But that's largely not the case.

While contributing a small percentage of your salary is a start, most financial planners agree that increasing your 401(k) contribution amount each year or whenever you get a raise is an essential part of the process.

If you haven't touched your 401(k)'s contribution amount, or checked to see that you're still getting a full match, you might not be saving enough to retire in 30 years.

You won't be able to live the same lifestyle you have now

A retirement savings account seems like a massive amount of money. But, considering that you may need to live on that amount for 20 to 30 years or more, it doesn't always work out to be that much each month.

Johnson says that he often shows his clients a projection of what income their savings habits will result in, and the amount they will have available to live on each month in the future. "I like to run the projection because there are a lot of things that people get blinded by," he says.

"Some people think that they will be OK living on 50% or 60% of what they make today," Johnson says. But that's often not realistic for many people.

In many cases, living on less means that people may not be able to maintain their current lifestyle in retirement. According to data from The New School's Schwartz Center for Economic Policy Analysis, about 40% of older US adults will face downward social mobility in retirement, living on less income than they once did.

If the projections show that you're not on track to have enough to maintain your current lifestyle, you may need to do some extra work on your retirement planning.

You haven't thought about how much retirement will really cost

In Johnson's experience, people tend to underestimate how much they really need — and it's easy to do that.

"[People] think that retirement is going to be much cheaper, but it's actually other areas of costs that will come up to make it equivalent to what you spend today," he says. "It's the medical costs, the Medicare [expenses], and the traveling that picks up."

Data from Fidelity shows that the average couple will spend about $295,000 on healthcare expenses in retirement alone. For most retirees who use Medicare, there are quite a few expenses that suddenly aren't covered — things like dentist office visits, vision exams, and glasses all become extra expenses, Business Insider's Tanza Loudenback reports. Additionally, some retirees opt for extra coverage, buying supplemental health insurance or paying for prescription drug coverage from medicare through Social Security deductions.

And it's also worth budgeting for the things you want to do, like travel or spending money on family. Retirement planning isn't a time to underestimate your spending — it's smarter to overestimate what you'll need than underestimate it.

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