How Do You Start Planning and Saving for Retirement?

Updated

You start by choosing a tax-advantaged account, setting an automatic contribution you can sustain, and picking an investment mix that matches a long time horizon. At Fidelity, that first step can be a Roth IRA, a health savings account (HSA) used alongside retirement savings, or a self-directed brokerage account, depending on whether you want tax-free retirement withdrawals, tax-free medical withdrawals, or simply a low-cost place to invest. The right choice depends on your income, whether you have a workplace plan, and when you may need the money.

Compare the account types before you open anything

The account you pick determines how contributions are taxed, when you can withdraw, and what penalties apply. Fidelity's own product descriptions give a clear starting comparison:

Account Tax treatment (per Fidelity) Withdrawal notes Best fit
Roth IRA Investment growth is tax-free, with tax-free withdrawals in retirement Any amount you contribute can be withdrawn without taxes or penalties, anytime, for any reason People who want tax-free retirement income and some flexibility on contributions
HSA Triple-tax advantage: tax-deductible contributions, no immediate tax on earnings, tax-free withdrawals for qualified medical expenses Not "use-it-or-lose-it" — the money is always yours People with a high-deductible health plan who want to save for health care and invest the balance
Brokerage account No special retirement tax treatment described Standard taxable account People who have maxed tax-advantaged options or want unrestricted access
529 account Federal income tax-deferred growth; tax-free withdrawals for qualified education expenses For college, trade school, and K–12 costs including tuition, fees, and books Education savings, not retirement

Two things to note. First, the Roth IRA contribution-withdrawal flexibility Fidelity describes applies to contributions, not to investment earnings — the tax-free retirement treatment is what makes the account a retirement tool. Second, a workplace plan such as a 401(k) is not described on this page, so check your employer's plan separately before deciding where new money goes.

Decide how much to save and how to invest

Fidelity's page does not publish a savings target or a recommended asset allocation, so treat any specific percentage as a personal planning decision rather than a Fidelity rule. What the page does support:

  • Start early and stay consistent. Fidelity notes that with a 529, starting early means money "could potentially grow more" — the same compounding logic applies to retirement accounts.
  • Keep costs low. Fidelity advertises $0 account fees on brokerage accounts, $0 commissions on online US stock and ETF trades, fractional shares from as little as $1, and no account fees or minimums on its HSA and 529. Lower costs leave more of your return invested.
  • Choose your level of involvement. Fidelity says you can invest on your own or have them do it, with choices from stocks to ETFs to crypto. A long retirement horizon generally argues for a diversified, low-turnover mix rather than concentrated bets, but the specific allocation is yours to set.

A practical rule of thumb for the first year: pick a contribution amount you can automate every payday without touching emergency savings, then raise it when income rises.

Choose self-directed investing or an advisor

Fidelity frames this as a genuine fork:

  • Self-directed: open a brokerage account or Roth IRA and manage the investments yourself. This suits people who are comfortable picking funds and rebalancing.
  • Guided: Fidelity describes collaborating with a dedicated advisor to build a "comprehensive wealth management strategy" designed to meet your goals and evolving needs. This suits people with complex situations — multiple accounts, a business, or an inheritance — or those who want someone else to handle allocation and rebalancing.

There is no pricing information for advisory services on this page, so ask about fees directly before committing. For a broader look at what advisors do and how to evaluate one, see the related question on choosing a financial advisor.

Avoid the common mistakes

  • Withdrawing early from retirement accounts. The Roth flexibility Fidelity describes covers contributions only; pulling earnings before retirement can trigger taxes and penalties. Keep retirement money separate from short-term savings.
  • Ignoring fees. Fidelity's $0 fees are a selling point, but fund expense ratios and advisory fees still apply. Compare total cost, not just account fees.
  • Starting too late. Compounding rewards time; a smaller amount started earlier often beats a larger amount started later.
  • Leaving an HSA in cash for decades. Fidelity notes you can earn interest on cash, invest the account, or do both — investing is what gives an HSA long-term growth potential.
  • Using a 529 for retirement. Education accounts serve education; retirement accounts serve retirement.

Take the first concrete step

  1. Pick the account. If you want tax-free retirement growth and contribution flexibility, start with a Roth IRA. If you have a high-deductible health plan and want a second tax-advantaged bucket, open an HSA. If you want unrestricted investing, open a brokerage account.
  2. Open it online. Fidelity's page offers an "Open an account" path and separate "Open a Roth IRA," "Open an HSA," and "Open a 529 account" links.
  3. Fund it automatically. Set a recurring contribution from each paycheck at a level you can sustain.
  4. Invest the balance. Choose a diversified mix of funds or ETFs, or use Fidelity's guided option if you prefer.
  5. Verify and review. Confirm the contribution posted, check that trades executed, and revisit your contribution rate and allocation once a year or after a major life change.

If you are unsure which account fits, Fidelity's "I need guidance" option and its advisor search are the natural next stops — but confirm fees and minimums with them directly, since this page does not list them.