For most twenty-somethings, retirement that is off in the distance 30 or 40 years down the road lands at the bottom of the priority list. Even those of us in our thirties and forties have trouble setting aside income for our golden years.
If you feel great when you look at the balance of your retirement account, kudos and keep up the good work. If you don’t feel great about where you are or wonder if you will ever be able to retire, it’s time for a reality check.
Here are some tips to help get you twenty-somethings (and, the rest of us) to stop procrastinating and get going on your retirement savings.
1. For the Young, Time is on Your Side.
The power of compounding growth is the miracle that allows people of even modest means to build robust nest eggs, and this potential is maximized by investing regularly over a long time horizon.
2. Take Advantage of 401(k) Employer Matching.
Many employers who offer a 401(k) plan typically provide a company match up to a certain percentage of your contributions. Contribute enough to get the match or you’ll be leaving money on the table.
3. Make it Automatic.
Paying yourself first is the easiest way to make sure that your retirement fund will be there when you need it. Make it automatic by setting up an auto draft.
4. Making More Money Makes It Easier to Save.
Side hustles, second job, splitting costs with a roommate. Increase your income and your retirement savings can grow way faster.
5. Don’t Forget Raises, Bonuses, and Windfalls.
Raises, bonuses, and unexpected windfalls are awesome, so be sure to consider including this income in your paycheck retirement deduction. You can boost your retirement contributions and see those digits grow.
6. Stick with It.
For most of us, saving for retirement is a commitment to our future and is something that takes most people decades to build. It may be a bumpy ride getting there but saving systematically and automatically works.
7. Social Security May or May Not Be There.
Prepare for the worst and hope for the best. Social Security was never intended to provide income replacement in retirement, and whether or not the program survives, it is better to save as if it won’t be there and be happily surprised when it is, rather than counting on it and it not being there.
8. Invest Appropriately.
In terms of how your retirement savings is invested, there is a big difference between being thirty years away from retirement and five years away from retirement. Your financial advisor can help you make appropriate investment decisions based on your age, years from retirement, and personality.
9. Remember to Protect.
Financially responsible people protect their ability to produce wealth and their lifestyle with appropriate life and disability income insurance. Putting away twenty percent of income doesn’t mean much if the income goes away.
10. Who Cares More About Your Retirement Savings Than You?
No one cares as much about your retirement savings as you do, and it is your responsibility. The only person that stands in the way of you and your retirement lifestyle is you. So, get organized, get prioritized, and get to work.
For a deeper dive into Retirement, be sure to download The Pros, Cons and How-Tos of Early Retirement
Contact a Financial Professional to learn more about the positive actions that you can take towards retirement.
Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice. This material contains the current opinions of Jill Van Nostrand but not necessarily those of Guardian or its subsidiaries and such opinions are subject to change without notice. Jill Van Nostrand is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is an indirect, wholly-owned subsidiary of Guardian. Certified Financial Services LLC is not an affiliate or subsidiary of PAS or Guardian. OSJ: 52 Forest Ave., Paramus, NJ 07652, 201-843-7700 2019-88871 Exp. 11/21