Lately, while spending time with family, friends, and associates, the topic of retirement has come up. When is the best time to start saving? How can young adults starting careers with college debt and living expenses afford the luxury of retirement saving? These informal conversations stir lots of interest in retirement planning strategies. As I listen to the discussion, I think of some things that everyone, especially millennials, should consider.
Even if retirement planning isn’t the first thing on your mind, it IS important to get started as soon as possible. The worst scenario is to postpone the process until later when you might find yourself short on resources when you need them. Options for retirement saving depend on your employment status:
Employer Retirement Plans
Not all employers offer sponsored plans, but if yours does, take advantage of it. Find out all you can about what is offered. Even though your budget may be tight with college loan payments and other start-up costs, contribute what you can. If you are limited to $10 or 1% of your salary, don’t be discouraged. Every dollar you can spare now could be worth much more by the time you retire. Increase your contribution with each raise you receive – you can’t miss what you didn’t have!
Individual Retirement Plans
If your company doesn’t offer an employer-sponsored retirement plan, or if you choose self-employment or contract work, look into contributing to an individual retirement account (IRA) or other investment options. Financial advisors can help you select the option that is best for your particular needs.
Saving and investing for your own retirement gives you ultimate control over planning and decision-making. If your goal is financial independence, you'll appreciate having the flexibility that retirement savings will provide you. A robust savings plan helps you accumulate the resources needed for exploring career and lifestyle alternatives when you are ready to do so.
Material discussed is meant for general illustration and/or informational purposes only, and it is not to be construed as investment, tax, or legal 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 when coordinated with individual professional advice.