Which action is a foundational step for retirement planning in early adulthood?

• A. Set long-term savings goals
• B. Rely on a single employer pension with no personal savings
• C. Wait to start saving until middle age
• D. Invest only in speculative ventures

Answer: (A)

Setting long-term savings goals gives direction for retirement planning in early adulthood. By defining a clear target for how much to save and by when, you create a concrete plan for contributions over time, which makes automatic saving and consistent investing much easier to sustain. This establishes a disciplined habit and helps you choose appropriate savings vehicles and investment strategies that fit a long time horizon. The benefit of starting early is powerful: compounding works in your favor as funds grow over decades, so even modest monthly contributions can accumulate significantly by retirement.

Relying on a single employer pension with no personal savings introduces risk because pension plans can change or fall short of future needs, and personal savings add important security. Waiting to start saving until middle age greatly reduces the years available for growth, making it harder to reach a comfortable retirement fund. Investing only in speculative ventures increases risk and can undermine long-term stability. Emphasizing long-term savings goals in early adulthood builds a solid foundation for retirement security.