Boston-based financial analyst Ryan Lowe is still decades from retirement age, but that hasn’t stopped him from saving for it in the hopes he might be able to enjoy it sooner. With a salary of $85,000, the 26-year-old puts over $4,000 a month into his retirement fund — with the goal of retiring sometime in his 40s.

“Time is everything,” he says. “An extra five or 10 years of starting earlier will make a world of difference.”

Lowe’s approach is simple: Instead of chasing riskier investments like individual stocks, he’s focused on investing mainly in S&P 500 index funds and exchange-traded funds (ETFs) through retirement accounts. “I like those funds because they’re a lot less volatile long term,” he says. While the average stock market return is around 10%, Lowe plans for 7% to account for inflation. His employer gives him $750 every quarter, which he also puts toward his retirement goals

Lowe currently lives at his family home to save on rent — one of the many ways he finds to be intentional about how he spends his money. He doesn’t drink or smoke, drives a 20-year-old car, and says his social life is low key. While some might see his lifestyle as a sacrifice, he says the peace of mind it gives him for the future is priceless. “I’m literally buying my time back with investing,” he says.

As he gets older, Lowe plans to shift toward derisking his investments by moving more money into bonds or target-date funds so he is less exposed to a market downturn right before retirement.

The Wider Trend

On average, Gen Z and millennial savers have started contributing to their workplace retirement plans at ages 23 and 28, respectively — nearly a decade earlier than Gen Xers and boomers, according to a 2025 Nationwide report. That preparation is paying off: About half of Gen Z are on track to maintain their standard of living in retirement, according to Vanguard’s 2025 Retirement Outlook report.

Shai Gothreau, the founder and financial planner at Infinity Financial Services, says the key for young people is to build a strong financial foundation with assets that compound over time. That starts with the basics: understanding your cash flow, building an emergency fund, keeping debt low and managing lifestyle expenses.

While young investors can be drawn to investments that promise faster returns, such as options trading or crypto, those come with risk. Gothreau suggests keeping portfolios simple, using diversified, low-cost, passive investments such as broad index funds or ETFs. “Consistent investing in diversified index funds may not feel exciting,” she says, “but over time it’s a very effective way to build long-term wealth.”

Key Takeaways

Start saving for retirement early. You do not need a six-figure salary to build wealth. By starting young and investing consistently, Lowe has already built substantial savings.

Keep investing simple. Favor diversified, low-cost, passive investing — such as index funds or ETFs — rather than complex, high-maintenance investments, Gothreau says.

Balance short-term and long-term goals. Make progress on both without sacrificing one for the other, Gothreau says. “Once you’ve allocated money toward those shorter-term priorities, any remaining surplus in your monthly budget can be directed toward long-term retirement investing.”