Expert Tips You Can Use Right Now

The key is to start saving and investing as soon as you can. Once you do, set a goal to increase your contributions as your income grows. Time and consistency are more powerful than chasing the highest-paying job or timing the market.

2. Automate Your Savings and Use Tax-Advantaged Accounts

Instead of saving whatever money you have left at the end of the month, automate your savings so that money goes directly into your retirement account before it hits your checking account. Treat this as a fixed bill, often coined as “paying yourself first,” that you can’t skip.

“Automation leverages human inertia in favor of saving rather than against it,” Dostal said. “Participants who automate their savings can be much better prepared to handle financial emergencies and future retirement.”

Employer-sponsored retirement accounts, such as traditional 401(k)s, are particularly powerful because they are made pre-tax. This means you reduce your taxable income when getting paid, while your savings grow tax-deferred until retirement.

Roth accounts work differently, using after-tax dollars but allowing tax-free withdrawals later. Choosing the right mix can help you reduce your lifetime tax burden.

If your employer offers a 401(k) match, make it a priority to contribute at least enough to get the full match; it’s basically free money, an immediate 100% return on the portion you contribute that your employer matches.

Another often overlooked tool worth mentioning is a Health Savings Account (HSA), which can function like a stealth retirement account if used strategically.

“A powerful strategy with HSAs is to contribute as much as possible, invest the funds, and avoid using them for current medical expenses,” Dostal said. “Value lies in their triple tax advantage: (1) contributions are tax-deductible, (2) growth inside the account is tax-free, and (3) distributions are tax-free when used for qualified medical expenses.”

3. Keep Lifestyle Inflation in Check

As you advance in your career and make more money, it’s tempting to upgrade your life: fancier car, bigger apartment, luxury clothing. This “lifestyle inflation” can adversely impact your ability to save more as time goes on.

If you keep your core expenses (housing, transportation, etc.) the same when your income rises, you’ll have more money to allocate to retirement savings. Small choices like resisting the temptation to buy a new car add up to thousands of dollars saved each year, and that money in your retirement accounts can grow tax-advantaged over decades.

4. Invest With a Long Horizon

A common investing misconception is that you need to pick winning stocks or time the market perfectly to build vast wealth. In reality, consistent contributions to diversified, low-cost investments, such as index funds, tend to outperform market timing over the long run.

Over long time frames, equities and broad-market investments have historically delivered positive returns, rewarding those who stayed invested through market swings.

Dollar-cost averaging (DCA) helps smooth out market volatility over time, removing the need to time the market. This is accomplished by investing a fixed amount regularly regardless of market performance.

Additionally, how much you pay to invest is an important factor to consider. High fees can erode your gains over the years. An investment with a fee of 1% more than another investment can reduce returns by tens of thousands of dollars over time.

Invest in funds with low expense ratios and review your retirement plan’s investment options regularly. By minimizing costs and staying invested, you keep more of your money working for you.

5. Bring Down High-Interest Rate Debt

High-interest debt, like credit cards, payday loans, or even some personal loans, can charge double-digit rates that easily outpace most investments. It makes no sense to invest money with a return of 5% when you’re paying interest charges of 15% on borrowed money.

“Pay down any debt with an effective after-tax interest rate of 8% or higher before directing ‘extra’ dollars to investing,” Dostal said. “Paying off credit card debt at 18% delivers a guaranteed return. For households earning $50,000 to $100,000, eliminating high-interest-rate debt is one of the most reliable ways to build wealth.”

Prioritize paying off debts with high rates first, commonly known as the avalanche method. Reducing or eliminating these balances not only saves you money on interest but also frees up cash to put towards retirement savings.

The Bottom Line

Building wealth for retirement isn’t about luck or landing the highest-paying job; it’s about small, consistent choices that compound over time. By starting early, staying disciplined with your savings, and avoiding costly pitfalls, you can set yourself up for the kind of future that feels both secure and rewarding. Your version of “rich” is within reach if you give your money the time and attention it needs to grow.