If you have your retirement savings on autopilot—automatic paycheck withdrawals into your workplace plan and automatic transfers from your checking account into your Roth IRA—that’s a huge win.

I want to be clear that the fact that you are saving for retirement is great. But I am going to challenge you to take your retirement saving up a notch in 2027 by increasing what you put in your 401(k) and IRA. I think this is especially important for younger workers.

Yes, I know paying today’s living costs is a challenge. Housing is expensive. And then there’s gas for those of you with long commutes, utilities, and food. I. Get. It.

But I am asking you to dig deep and see if you can boost your 401(k) savings rate by 1 percentage point or 2 percentage points for 2027. And try to max out your Roth IRA contribution if you are eligible. The IRA contribution limit is $7,500 in 2026 for anyone younger than 50. We’ll soon learn whether the limit will be higher in 2027.

The reason I am pushing you to save more for retirement when you are younger is that as you age you may find it harder—not easier—to boost your savings.

When you are younger than 40 or so, you likely aren’t focused on a few major curveballs that might come your way in another decade or two.

You need to step in as a caregiver.

As parents and other family members age, they may need you to step in and provide care. And I don’t mean just stopping in, calling, or arranging a home repair.

AARP research found that family caregivers who had out-of-pocket expenses spent an average of more than $7,200 a year—about $600 a month—of their own money. And caregiving can affect your income, too. Working caregivers may need to change schedules, cut their hours, take a leave of absence, or even stop working for a period of time.

When you need to step in with financial help—or your income falls because you need to provide care—it can mean having to cut corners elsewhere. Including retirement savings.

That’s why saving even more today can be so smart. If you eventually need to step in and help a loved one, you will already be further ahead with your retirement savings.

Your young adult kid needs help adulting.

Okay, if you’re younger than 40, you might not have adult kids yet. Or even kids, period. Right?

But play along with me. If there is any chance that in the next decade or two or three you might have a kid who has morphed into a grown adult, be prepared for the possibility that they may not be 100% financially independent.

I am not a big fan of providing ongoing financial support to adult children for two reasons. Are you truly helping them, or are you just saying yes? Just saying yes doesn’t necessarily help them grow into a fully functioning adult.

Moreover, I will never condone helping an adult child if it puts your retirement at risk. And curtailing your retirement savings in your 50s and 60s to help a grown child could absolutely put your retirement security at risk. I talk about parents’ obligations to adult children in a recent episode of my Women & Money podcast.

I say all that knowing some of you won’t be able to say no.

In that case, I am doubly insistent that you increase your retirement savings today if you think there is a chance you may not be able to turbocharge those savings later because you are providing support to grown kids.

Your career trajectory might not go according to plan.

A dollar saved in your 20s and 30s has more time to grow than a dollar saved in your 50s. That makes retirement saving when you are young so powerful: You get more help from compounding.

And it has always been risky to assume you don’t need to save much when you are younger because you intend to have a long career with ever-rising income. You presume you can save more later.

Even before AI began changing the workplace, the ability to keep working well into your 60s was never a given. Illness. Layoffs. Needing to be a caregiver. Those are among the reasons people typically report they retired far earlier than they expected.

Again, much of that may be out of your control.

But what is very much in your control right now is committing to saving even more for retirement when you are young. When life delivers curveballs, you will be better prepared to handle what comes your way.

 

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